July 18, 2019
Sukhendu Sekhar Roy speaks on Arbitration Bills
Bills: The New Delhi International Arbitration Centre Bill, 2019 and The Arbitration and Conciliation (Amendment) Bill, 2018
Sir, first of all, I condemn the way both the Bills have been brought to the House without any scrutiny of the Standing Committee or the Select Committee of the Parliament. The government is repeatedly bulldozing the parliamentary practises maintained by this House and the other House.
Sir, secondly I oppose both the Bills, because according to me both the Bills are draconian because there is no reasonable nexus between the objectives of the Bill as has been mentioned here and the provisions of the Bill. So, in that way it is totally draconian.
Sir, in the morning I requested the Hon’ble Chairman that some time should be extended because these are crucial Bills. Those who understand about arbitration, these are alternative, dispute redressal mechanism and this is not a coffee machine that someone will push the button and coffee will come. This is something more than that and I was given to understand that time would be extended. When I requested you at 2 o’clock, one Member from the ruling party, Mr Bhupendra Yadav, agreed. From the main Opposition, Mr Anand Sharma ji agreed. Unfortunately the Minister objected; he has the right to object. So, those who will be speaking before 6 o’clock, their cases will not be considered, but those who are speaking after 6 o’clock, their cases will be considered? Is that the outcome?
The Bill’s (first Bill) objective says, to establish an autonomous and independent institution for better management of arbitration in India. However, nothing is there in the Bill to ensure whether it will be independent and autonomous. How? I am coming to that. But before that there is a short background of this Bill.
Why this Bill has been brought? On March 2, 2019, the Government of India promulgated an Ordinance for a New Delhi Arbitration centre and on the same day, Joint Secretary and Legal Adviser for the Law Ministry was appointed custodian of the International Centre for Alternative Dispute Resolution, ICADR in short. It was taken over by the government even without any consultation with the Chief Justice of India who was the Chairman of the ICADR; on the same day the Ordinance was promulgated.
Secondly Sir, my question is why is the government in so much hurry? The Ordinance was challenged before the High Court. The appointment of the custodian was stayed. The government thereafter filed a review petition and the stay which was earlier granted by the court was vacated on May 16. The case is listed for further hearing on July 25, 2019; the verdict is yet to come this month. The government has no patience to wait for the outcome of the judicial proceedings. This government has no respect for the judiciary. Again it has been established. This is the hurry. They do not know what the courts will do, hence the hurry.
Sir, there is another angle. The learned counsel appearing on behalf of the government contended before the court that we have committed before the World Bank that by May 19 we shall come out with some positive result regarding ‘ease of doing business’, which is the arbitral institution. This government is dictated upon by the World Bank. That is the main reason and that is the reason for the hurry.
Sir, the Government speaks about the Sri Krishna Committee. The Minister was telling so many things about the Sri Krishna Committee. As far as this Bill is concerned, the New Delhi International Arbitration Centre Bill, two eminent members of that Sri Krishna committee, Justice S. Ravindra Bhatt, former Chief Justice of the Delhi High Court, and Mr KK Venugopal, Attorney General of the Government of India, they disassociated themselves from this part of the report. When this New Delhi Centre was being finalised they disassociated themselves. I want to know the reasons for this disassociation, government must speak out.
Sir, now I now please come to Clause V of the Bill. Clause V of the Bill says, the centre, the legislator shall consist of the following members,
a) a person who has been a judge of the Supreme Court or a judge of a High Court, or, an eminent person having special knowledge and experience in the conduct of administration,
b) two eminent persons having substantial knowledge and experience in institution arbitration
c) one representative from commerce and industry
d) Secretary, Department of Law
e) one Financial Advisor, Department of Expenditure.
And all of them will be appointed by the government. Will they be independent? Will they be neutral? This is the question. Investors who prefer arbitration proceedings from inside or outside, whether they will prefer the New Delhi Arbitration Centre, or London Arbitration Tribunal or, Hong Kong, or for that matter, Singapore or even Stockholm? They will not come to New Delhi. This is an eye wash just to fulfill the commitment before the World Bank and to gear the property and the infrastructure of the ICADR, which was led by Hon’ble Chief Justice of India, which has been taken over.
So, it is essentially a GOI Arbitration Centre, which had to name it New Delhi Arbitration Centre. It is a GOI Arbitration Centre. There should not have been any ambiguity thereafter. Totally manned, managed controlled by the government. Where is the investor-friendly procedural framework? Where is the transparent process for appointment and removal of the members? So, if the Bill in the present form is passed, the independence and credibility of the institution shall be compromised once and for all.
Sir, so far the second Bill is concerned, the Shri Krishna Committee recommended constitution of an independent body, which is in the objective, but not in the provision, which will provide recommendations and guidelines for growth of institutional arbitration in India. I am talking about the second Bill. That is a major concern. The Arbitration Council of India, as proposed under the Bill consists of only individuals nominated by the Central Government or ex-officio members. The government is the biggest litigator in India. What the Shri Krishna Committee suggested? Let us look at the recommendations. The Shri Krishna Committee said, a retired Judge of the Supreme Court of India or a High Court who have substantially experienced with genuine arbitration matters or he has acted as an arbitrator nominated by Chief Justice of India, he will be a member of the Governing Body of the Arbitration Council. That is the first recommendation of the Shri Krishna Committee.
Second, an eminent counsel not eminent person of Government choice or, the minister choice, having substantial knowledge and experience in institution arbitration both international and domestic nominated by the central government. Government will nominate only the experienced eminent counsel who has special knowledge in domestic and international arbitration.
What this Bill says? This Bill says the Council will consist of the following members: the judge of the Supreme Court, or High Court, or ‘or an eminent person’ – the government has replaced ‘eminent counsel’ with ‘eminent person’. Therefore the government has not accepted the recommendation of the Sri Krishna Committee. It is a total departure from the recommendations of the committee. The very first provision says that. It is crystal clear. Nobody can deny.
And then, the secretary to the Government of India will be the ex-officio chairman – there is no problem in that, but clause 43C sub-clause (2), as a proviso, says, ‘Provided that no Chairperson or Member, other than ex officio Members, shall hold office as such after he has attained the age of seventy years in the case of Chairperson and sixty-seven years in the case of Member.’
So a chairperson can continue up to 70 years and others up to 67 years. And who is the ex-officio member? The ex-officio member is the secretary, and he can also be the chairperson if so desired because in the definition, the member includes the chairman. So we have been fooled after the Government all this while kept referring to the Srikrishna Committee.
Now my question is, is it a fact or not that a Government that regulates arbitrators is antithetic to the very concept of arbitration? So, a Government body that regulates arbitrators is antithetic to the very concept of arbitration and for that reason, has no precedent in any arbitration-friendly jurisdiction. India will be the only exception if this Bill is passed.
Further, in a country where the Government is the biggest litigant, the Government cannot act as a supervisor of the very arbitrators who are involved in cases against the Government. there is a clear conflict of interest. I strongly oppose this.
The date of completion of hearings is not clearly indicated – it is based on circumstances. For instance, where there is a need for pre-determined hour of jurisdiction, where proceedings are bifurcated for other reasons, or where there is a counter-claim or where a party amends its pleading, there is uncertainty.
Secondly, there is an exemption for international commercial arbitration. There is a time limit for domestic arbitration but for domestic arbitration, there is no time limit. So, as far as an international arbitration is concerned, it will be an arbitration unto death. But so far as domestic arbitration is concerned, there is a time limit. This will be very impractical.
Finally, let me come to the case of BCCI vs Cricket Coaching Private Limited. We expected that following the Supreme Court ruling, the Government will pay serious attention to the judgement and accordingly, the Bill will be brought, but which has not been done.
Again I say that the Government has no respect for the Supreme Court or the High Court and so this is a draconian Bill. In protest against this Bill which has been brought into the House without the scrutiny of the parliamentary committees, I stage a walkout.