New Delhi International Arbitration Centre Bill

The New Delhi International Arbitration Centre (NDIAC) Bill was introduced with the objective of establishing an independent and autonomous institution for conducting international and domestic arbitration, mediation and conciliation. It represents an important step in India’s broader effort to promote itself as a global hub for arbitration, thereby improving the ease of doing business and strengthening investor confidence.

Background

Arbitration is widely recognised as an efficient method of resolving commercial disputes outside traditional courts. However, in India, arbitration proceedings were often criticised for delays, excessive judicial interference and lack of institutional support. To address these concerns, the Government of India sought to create a credible and internationally recognised arbitration institution in New Delhi.
The New Delhi International Arbitration Centre Bill was first introduced in 2018 and subsequently passed by both Houses of Parliament in 2019. It replaced the International Centre for Alternative Dispute Resolution (ICADR), which was perceived as ineffective due to lack of autonomy, inadequate infrastructure and limited professional management. The NDIAC was thus envisaged as a modern, high-quality arbitration institution capable of handling complex domestic and international cases in line with global best practices.

Objectives of the Bill

The Bill aims to:

• Establish the New Delhi International Arbitration Centre as an autonomous body to promote institutional arbitration in India.
• Develop New Delhi as a centre of institutional arbitration comparable with international institutions such as the Singapore International Arbitration Centre (SIAC) and the London Court of International Arbitration (LCIA).
• Create facilities for conciliation and mediation to complement arbitration.
• Encourage research and training in alternative dispute resolution (ADR) mechanisms.
• Reduce the dependency on foreign arbitration centres by providing cost-effective, credible and time-bound dispute resolution in India.

Key Provisions

Establishment and Structure

• The Bill provides for the establishment of the NDIAC as a statutory body headquartered in New Delhi.
• The Centre consists of:
  • A Chairperson, who is either a judge of the Supreme Court, a High Court Chief Justice, or a person of eminence with experience in arbitration.
  • Two full-time members with professional expertise in arbitration.
  • One representative each from the Ministry of Law and Justice and the Ministry of Finance.
  • A Chief Executive Officer (CEO) responsible for administrative operations.

Functions of the Centre

The NDIAC is tasked with several important functions:

• Conducting international and domestic arbitration proceedings.
• Providing administrative and logistical support to arbitral tribunals.
• Facilitating conciliation and mediation services.
• Promoting training, research and awareness programmes in the field of ADR.
• Maintaining a panel of accredited arbitrators and experts.
• Laying down rules and procedures to ensure efficient, transparent and fair dispute resolution.

Transfer of Assets and Liabilities

The Bill provides for the transfer of all assets, rights, and liabilities of the International Centre for Alternative Dispute Resolution (ICADR) to the newly constituted NDIAC. Employees of ICADR were also to be transferred to the new institution, ensuring continuity of service while enabling a fresh administrative framework.

Financial and Administrative Independence

• The NDIAC is authorised to maintain its own fund, which consists of grants, fees and other sources of income.
• It is empowered to manage its finances and maintain accounts, subject to audit by the Comptroller and Auditor General of India (CAG).
• The Centre enjoys administrative autonomy under the overall supervision of the Ministry of Law and Justice.

Importance and Expected Impact

The establishment of the NDIAC carries significant implications for India’s legal and business environment:

• Promotion of Institutional Arbitration: It encourages the shift from ad hoc arbitration to structured, institution-based arbitration, which is generally faster and more reliable.
• Enhancing Investor Confidence: A credible arbitration centre boosts investor trust by ensuring predictable and efficient dispute resolution.
• Reducing Dependence on Foreign Institutions: Indian companies previously relied heavily on arbitration centres abroad, such as in Singapore or London. The NDIAC seeks to reverse this trend and make India a preferred seat of arbitration.
• Improving Ease of Doing Business: Effective dispute resolution is a crucial determinant of business confidence and regulatory efficiency. The NDIAC contributes to improving India’s ranking on global indices related to business environment and legal transparency.
• Capacity Building: By offering training and academic programmes, the Centre contributes to the professional development of arbitration practitioners and the overall growth of the ADR ecosystem in India.

Criticism and Challenges

Despite its objectives, the Bill and the institution have faced certain criticisms and challenges:

• Perception of Government Control: Some experts have argued that the inclusion of government representatives in the governing council may compromise the independence of the institution.
• Competition from Global Centres: Established international arbitration hubs such as Singapore and London already enjoy a high level of trust, making it challenging for NDIAC to attract foreign cases in the short term.
• Need for Skilled Arbitrators: The success of the institution depends on the availability of trained arbitrators and efficient administrative staff capable of managing complex international cases.
• Implementation Issues: Operational efficiency, digital infrastructure, and consistent procedural standards are essential to meet international expectations.

Significance in India’s Legal Landscape

The creation of the New Delhi International Arbitration Centre marks a major institutional reform in India’s dispute resolution framework. It aligns with the government’s long-term vision of transforming India into a global hub for arbitration and ensuring that commercial disputes are resolved domestically in a professional and time-bound manner.