Following amendments to the Arbitration Rules involving Micro, Small and Medium Enterprises (MSMEs) in June this year, the IIAC, the only arbitral institution directly funded by the central government, has launched a new Bob is in the early stages of calling. Services, specializing in international maritime arbitration.

“The new arbitration center in Mumbai will not be a new institution, but more like a branch of the IIAC,” said Hemant Gupta, chairperson of the IIAC and a retired Supreme Court judge. Gupta said that both the measures taken to incentivize MSMEs as well as parties to maritime arbitration are to promote institutional arbitration in the country.

Efforts to promote mediation for out-of-court dispute resolution began before the turn of the millennium with the establishment of the International Center for Alternative Dispute Resolution (ICADR) and the passage of the Mediation and Conciliation Act in 1995 and 1996 respectively.

Promoting institutional mediation was a key function of ICADR. However, a weak caseload was a major problem with the ICADR, indicating that India was far from adopting institutionalized arbitration as a dispute resolution mechanism, retired Supreme Court judge BN Sri said. According to the report of an expert committee of a panel headed by Krishna. 2017.

“…ICADR’s caseload has increased to 49 arbitration cases since its inception compared to 343 new cases handled by SIAC (Singapore International Arbitration Center) in 2016, LCIA (London Court for International (International Arbitration) handled 303 new cases in 2016, and 966 new cases were handled by the ICC (International Chamber of Commerce) court in 2016,” the Srikrishna Committee report said.

Following the committee’s recommendations to restructure ICADR, the central government created the New Delhi International Arbitration Center in 2019, later renamed IIAC.

Poor caseload problem

Weak caseloads, however, remain a problem. Currently, IIAC is hosting around 15 ongoing institutional arbitrations, IIAC’s Gupta said. MintThis is a low number, he added.

An email query to the Ministry of Law and Justice about these developments was not answered by press time.

In June, in a concerted effort to increase IIAC’s caseload, the government issued new rules for arbitration for MSMEs, allowing them to use its services at a discount. A provision of the notified rules states, “No filing fee for claim or counterclaim and minimum arbitration fee (less than the rate specified in the Fourth Schedule to the Arbitration and Conciliation Act, 1996) and admissible by the parties.” Pay a minimal administrative fee.”

The new rules also provide for fast-track arbitration to be concluded within six months from the date of arbitrators’ decision by the parties, as well as fee waivers for MSMEs seeking legal assistance.

Consequently, the IIAC has decided to focus on maritime arbitration with the same objective of increasing its caseload. Globally, maritime arbitration, especially international maritime arbitration, is taking off as the shipping industry has boomed due to increased international trade.

A report by the Chartered Institute of Chartered Accountants states that “putting maritime arbitration into context in the London market, with a caseload of 1,700 new references on average each year, the majority of arbitrations held in London (around 75 %) becomes.” Arbitrators, an international training institution for international arbitration, said in 2023.

The importance of revival

The revival of IIAC is of importance as India seeks to move from a culture of ad hoc arbitration to institutionalized arbitration, as suggested by various expert panels and Law Commission reports. It is also in line with the central government’s goal of making India a hub for international arbitration.

This was stated by Law and Justice Minister Arjun Ram Meghwal Mint Last week, the government was in the process of framing new rules under the Arbitration Act.

The law ministry also sought data on state arbitration cases from all other ministries earlier this month, after researching global best practices. Mint reported earlier.

IIAC secures the budget through grants sought from the central government every year. ₹3-4 crore, of which about half is for salaries of permanent employees, IIAC officials said. MintRequest anonymity.

All other institutional arbitration centers in the country are either privately run, or run by the High Courts. For example, the Delhi International Arbitration Center is run by the Delhi High Court.