International Centre For Alternative Dispute Resolution At Loggerheads With Union Law Ministry In Battle For Control

The tug-of-war began earlier this year, when on the intervening night of March 2 and 3, the promulgation of the New Delhi International Arbitration Centre (NDIAC) Ordinance sought to transfer all undertakings of the ICADR to the Union Law Ministry. The ICADR, which has Chief Justice Ranjan Gogoi as its chairp­er­son and a governing council packed with legal luminaries like Attorney-Gen­eral K.K. Venugopal, challenged the con­st­i­tutionality of the ordinance in the Delhi High Court and got a stay order. On July 3, Union law minister Ravi Shankar Prasad introduced a bill in the Lok Sabha seeking to replace the ordinance. On July 8, the Supreme Court refused to entertain the Centre바카라�s plea to vacate the stay granted by the Delhi HC.

The quest for control of an autonomous institution raises obvious questions on the government바카라�s desperation to take over what is essentially a body corporate registered as an autonomous society that operates under the aegis of the SC.

바카라�The ICADR was established to offer an independent platform for arbitration, conciliation and mediation, essentially to corporate entities tied up in legal disputes with the government or other private entities. It received a capital grant of Rs 3 crore from the Union government for construction of its building and has, since, been fully self-sustaining in its expenses. The government now wants to seize its control,바카라� former Union law minister and lifetime patron of ICADR, Hans Raj Bhardwaj, told Outlook (see interview).

Bhardwaj alleges that the current imp­asse over ICADR began soon after Prasad took over as law minister in 2016 during the first term of PM Narendra Modi바카라�s government. 바카라�In fact, I had spoken to Prasad바카라�s predecessor, Sadananda Gowda, about ways in which ICADR could be made more efficient, his resp­o­nse was very positive,바카라� Bhardwaj says.

In January 2017, the government set up a 10-member committee headed by former SC judge B.N. Srikrishna 바카라�to review the institutionalisation of arbitration mech­anism in India바카라�. The panel submitted its report in July 2017, recommending wide-ranging reforms in arbitration mec­hanism needed to reduce the burden of cases pending in courts. The report dedicated an entire chapter to the ICADR, terming it a 바카라�flagship arbitral institution바카라�, but noting that it had received only 53 cases of arbitration and conciliation since its inception, concluding that 바카라�it may be preferable for the government to take over the ICADR바카라�. Justice S. Ravindra Bhat, presently Rajasthan High Court chief justice and K.K.Venugopal, who were part of the panel, had dissociated themselves from the report pertaining to the ICADR.

P.K. Malhotra, former law secretary and ICADR secretary-­general, who is the main petitioner against the NDIAC Bill in the Delhi HC, says the government has used the report to justify its 바카라�blatantly unconstitutional바카라� attempt to seize the INS­titution. 바카라�While the sta­ted objective of improving institutionalised arbitration mechanism is laudable, the manner in which it is seeking to take control of ICADR is objectionable,바카라� Malhotra says.

Senior advocate Dushyant Dave, counsel for ICADR, believes that the bill doesn바카라�t offer an alternative dispute resolution (ADR) mechanism better than what the ICADR has. 바카라�By taking over an institution that has been involved in ADR for 25 years, the government is actually discouraging arbitration. And what are its grounds? A government can take control of an entity it has funded but only if there is a proven charge of financial irr­egularity. Has there been any such charge against ICADR?바카라� Dave asks.

A former chief justice who has been ass­ociated with ICADR tells Outlook, 바카라�the government was unhappy about two thi­ngs바카라�first, it did not want Bhardwaj as lifetime patron of ICADR because he is essentially a Congressman and second, because ICADR is autonomous, the Centre could not have its pick in deciding its office-bearers or influencing arbitration matters, especially ones against public sector undertakings.바카라�

As per the NDIAC Bill, once the government takes control, a revamped ICADR will comprise seven members with a ret­ired judge of the SC or the high court or a person with experience in the administration of arbitration as its chairperson. It would have two 바카라�eminent persons바카라� of sub­stantial experience in institutional arbitration as members and three ex-officio members, including a nominee from the ministry of finance and a CEO. There would also be a representative from a recognised body of commerce and industry, appointed as a part-time member.

Several ICADR members Outlook spoke to believed that this proposed composition provides a scope for favouritism by obliging those close to the regime. 바카라�The other problem would be that the NDIAC will not be seen as an independent arbitration body but one that functions under the government. Why will corporates move NDIAC for arbitration when most of such cases are against government ent­ities?바카라� an ICADR functionary asks.

While Prasad was unavailable for comment, sources in the law ministry stressed that the Bill was justified because ICADR 바카라�has not had a significant case load in over two decades of its existence바카라�; a fact und­erscored by the Srikrishna panel too.

An ICADR governing council member refuted the charge of 바카라�non-performa­nce바카라�. 바카라�The ICADR was set up with some broad objectives, like promoting ADR through conferences, providing facilities and administrative assistance for ADR, maintaining panels of arbitrators and setting up regional centres바카라�it has carried out all these activities,바카라� he says.

A former high court judge who has handled arbitration matters for ICADR tells Outlook, 바카라�The charge that ICADR does not have a huge case load does not hold water. Secondly, in most ADR cases different government bodies are also a party, should the government not be answerable for not approaching ICADR with such cases? Why is the government singling ICADR out? If it wants to have a centralised arbitration platform, let it take over every private institution involved with ADR.바카라�

With the Supreme Court now referring the dispute between the ICADR and the Union government back to the Delhi HC, the legal battle is nowhere near closure. Prasad may succeed in having the bill passed in the Lok Sabha, given the BJP바카라�s brute strength there. However, its smooth sailing in the Rajya Sabha, where the Modi government lacks a clear majority, is uncertain. Congress RS members Vivek Tankha and Abhishek Manu Singhvi, ass­ociated with the ICADR in their capacity as senior advocates, might also canvas among Opposition members to scuttle Prasad바카라�s bid. The impasse certainly makes for a fit case of arbitration.