Ordinance seeking to establish New Delhi International Arbitration Centre challenged in Delhi HC

The International Centre For Alternative Dispute Resolution (ICADR) has moved the Delhi High Court challenging the promulgation of an Ordinance for establishing the New Delhi International Arbitration Centre..The Ordinance also states that ICADR’s entire undertaking would be transferred to the Central government, which would subsequently be passed to the New Delhi International Arbitration Centre (NDIAC)..The matter was listed for hearing before a Division Bench of Chief Justice Rajendra Menon and Justice V Kameswar Rao. The Bench has stayed the operation of the Ordinance with respect to the transfer of ICADR’s undertaking to Central Government..“..this Court is of the view, to balance the equities including when some arbitration cases are still pending adjudication, it shall be appropriate that the order dated March 02, 2019 issued by the Deputy Secretary, Government of India appointing Dr. Rajiv Mani, Joint Secretary & Legal Advisor, Department of Legal Affairs, Ministry of Law & Justice as the custodian of the undertakings of the International Centre for Alternative Dispute Resolution need to be stayed.”.Appearing for ICADR, Senior Advocate Dushyant Dave argued that there was no urgency to create the NDIAC by way of an Ordinance.. “You have not met the requirement of Article 123. The Ordinance is unconstitutional and void ab initio…The Institution is existing since 1995. There was no urgency to issue an Ordinance.”.He further informed the Court that ICADR is an “institution par excellence” that has held hundreds of seminars in the field and is also associated with several foreign institutions, Dave further submitted..He nonetheless acknowledged that ICADR has not been doing as much arbitration due to the popularity of ad hoc arbitration culture in India..“90% (of arbitration) goes out of India. Our Centre is not chosen by the Government.“, he added..Further questioning the establishment of NDIAC in this manner, Dave said,.“What is the difference (between ICADR and NDIAC)? What more can you do to make it autonomous? The CJI is the Chairman. Government itself never criticized it…NDIAC has been declared of national importance without it coming into existence. This is a stillborn child.“.He also objected to the taking over of ICADR’s accounts..“We had 30 crore of deposits. We have 33 employees across India. An international conference is around the corner..You have taken over my accounts, existing infrastructure.“.He stated that ICADR has no objections with NDIAC being a parallel institution..“We have no issue if the Government wants to utilize our space for new Centre.”.Opposing the petition, Additional Solicitor General Maninder Acharya stated that the NDIAC was being established pursuant to the Justice BN Saikrishna Committee Report..Claiming that ICADR has only had 55 cases since 1995, ASG Acharya said that the institution has not been able to do what it was supposed to..On being asked by the Bench what the emergent situation was which led to the Ordinance, ASG Acharya stated that the World Bank assessment on the ‘ease of doing business’ is due on May 1, 2019, which would reflect on India’s global economic reputation..“We wanted the Centre since 2017...Every day our ‘Modern India’ is suffering…We do not want ad hoc arbitration to continue.“.She also informed the Court that since ICADR is a society, it’s functioning has not been taken over by the Central government custodian. Only the undertakings of ICADR which were provided by the Central Government have been transferred, she said..“How will they function (without their undertakings)? You have taken over the infrastructure“, the Bench asked..“Those (pending arbitration) are not that many“, the ASG replied..Acharya further argued that the Ordinance has now been passed after the satisfaction of the President, hence the Court’s power of judicial review was limited..After hearing the parties at length, the Bench stayed the operation of the Ordinance with respect to the transfer of ICADR’s undertaking to Central Government Custodian..“(We would) let them(ICDAR) function. We are willing to help you (Central Government) but not in this manner“, the Court said..Court has issued notice to the Central Government and directed it to file its response to the petition within two weeks..The matter would be heard next on March 25..Read the order:.Bar & Bench is available on WhatsApp. For real-time updates on stories, Click here to subscribe to our WhatsApp.