TAKEOVER BID
government. “In fact, I had spoken to
Prasad’s predecessor, Sadananda Gowda,
about ways in which ICADR could be
made more efficient, his resp o nse was
very positive,” Bhardwaj says.
In January 2017, the government set up
a 10-member committee headed by for-
mer SC judge B.N. Srikrishna “to review
the institutionalisation of arbitration
mech anism in India”. The panel submit-
ted its report in July 2017, recommending
wide-ranging reforms in arbitration
mec hanism needed to reduce the burden
of cases pending in courts. The report
dedicated an entire chapter to the ICADR,
terming it a “flagship arbitral institution”,
but noting that it had received only 53
cases of arbitration and conciliation sincecio 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 indus-
try, appointed as a part-time member.
Several ICADR members Outlook spoke
to believed that this proposed composi-
tion provides a scope for favouritism by
obliging those close to the regime. “The
other problem would be that the NDIAC
will not be seen as an independent arbi-
tration body but one that functions under
the government. Why will corporates
move NDIAC for arbitration when most
of such cases are against government
ent ities?” an ICADR functionary asks.
While Prasad was unavailable for com-
ment, sources in the law ministry stressed
that the Bill was justified because ICADR
“has not had a significant case load in over
two decades of its existence”; a fact und-
erscored by the Srikrishna panel too.
An ICADR governing council member
refuted the charge of ‘non-performa-
nce’. “The ICADR was set up with some
broad objectives, like promoting ADR
through conferences, providing facili-
ties and administrative assistance for
ADR, maintaining panels of arbitrators
and setting up regional centres...it has
carried out all these activities,” he says.
A former high court judge who has
handled arbitration matters for ICADR
tells Outlook, “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 an-
swerable 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 in-
volved with ADR.”
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 BJP’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, ass-
ociated with the ICADR in their capacity
as senior advocates, might also canvas
among Opposition members to scuttle
Prasad’s bid. The impasse certainly
makes for a fit case of arbitration. Owhich it is seeking to take control of
ICADR is objectionable,” Malhotra says.
Senior advocate Dushyant Dave, coun-
sel for ICADR, believes that the bill
doesn’t offer an alternative dispute res-
olution (ADR) mechanism better than
what the ICADR has. “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 irr egularity.
Has there been any such charge against
ICADR?” Dave asks.
A former chief justice who has been
ass ociated with ICADR tells Outlook, “the
government was unhappy about two thi-“What are its grounds for
seizing control? Only a
proven charge of financial
irregularity can justify it.
Is there any such charge?”
Dushyant Dave
Counsel for ICADR, senior advocate“Aiming to improve the
arbitration mechanism is
laudable, but the
manner to seek control of
ICADR is objectionable.”
P.K. Malhotra
ICADR secretary-general, former law secyits inception, concluding that “it may be
preferable for the government to take
over the ICADR”. 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 “blatantly
unconstitutional” attempt to seize the
ins titution. “While the sta ted objective of
improving institutionalised arbitration
mechanism is laudable, the manner inngs—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 arbitra-
tion matters, especially ones against
public sector undertakings.”
As per the NDIAC Bill, once the govern-
ment takes control, a revamped ICADR
will comprise seven members with a ret-
ired judge of the SC or the high court or a
person with experience in the adminis-
tration of arbitration as its chairperson. It
would have two ‘eminent persons’ of
sub stantial experience in institutional
arbitration as members and three ex-offi-24 OUTLOOK 22 July 2019