News: After Mumbai, India’s Second Business Arbitration Centre In Gurgaon-23.01.2017
After Mumbai, India’s second business Arbitration Centre in Gurgaon
For a city that hosts half the Fortune 500 companies and is home to hundreds of top-notch Indian corporate firms, this is good news.
The Punjab and Haryana high court has approved the setting up of an International Arbitration Centre (IAC) in Gurgaon to provide a platform for business houses to negotiate commercial disputes. A proposal in this regard has been forwarded to the state government.
The Gurgaon centre would be the second in India. The first IAC was set up by the Maharashtra government in Mumbai in October 2016.
"Gurgaon houses a large number of multi-national companies (MNCs). Setting up IAC in the city will be more cost-effective and less time consuming for these companies," said district and sessions judge of Gurgaon, Harnam Singh Thakur, adding that at present, all cases related to arbitration go to Singapore and London IACs.
According to sources, Indian companies at present make up an estimated 30% of the arbitration cases handled by the centres in Singapore and London.
"Most of the commercial contracts between companies have arbitration clauses. In case of any dispute, they contact the IAC for resolution," said Thakur, adding that the decision taken by the arbitration centre can be challenged in courts.
The court's decision brought cheer among the business fraternity. "I think this is a very positive development. We see Gurgaon developing into a major hub for international business, and institutions like the IAC are part of the soft infrastructure for this," said Manas Fuloria of Nasscom.
Arbitration in India is governed by the Arbitration and Conciliation Act, 2016. Every agreement has a dispute redress clause, which lays down ways in which a dispute can be resolved.
Usually, business houses prefer going to an arbitration centre before taking the legal route, as it saves time.
An IAC is different from court litigation. It is a private negotiation between lawyers representing the disputing parties. When negotiations reach a stage where a referee, judge or some kind of neutral decision-maker is required, the IAC panel gives a verdict. These panels are typically made up of international corporate law experts and senior executives with impeccable credentials.
