India Development News & Foreign Investment Opportunities

New Delhi International Arbitration Centre for businesses

India works on ease of doing business


India works on ease of doing business


Nishith Desai Associates


The Government is establishing the New Delhi International Arbitration Centre (NDIAC) as a statutory body to improve the ease of doing business in India, reported Nishith Desai Associates, the Mumbai-based legal and tax consultants with global network.

The Government has further amended the Commercial Courts Act, 2015, and further amendments to the Arbitration and Conciliation Act, 1996, are currently underway, said the consultancy.

Improvement in the ability to resolve disputes is an important step in this, says Nishith Desai Associates, adding that these are in addition to several steps that have already been taken with many more in the pipeline.

The latest is Cabinet approval on 31 July 2019 for India to sign the United Nations Convention on International Settlement Agreements Resulting from Mediation, popularly also referred to as the “Singapore Convention.

The first round of convention signing is scheduled for 7 Aug 2019 in Singapore, which had a lead role in draft the mediation treaty.

“This (decision) is a landmark decision and puts the future of mediation and mediated settlements in India on a strong pedestal,” said Nishith Desai.

Each of the Government’s initiatives are designed with a view to resolve disputes utilizing alternative dispute resolution mechanisms instead of the traditional court system, which is overloaded and where delays abound.

While informal mediation in India is prevalent since time immemorial, Indian law does not, till date, recognize a settlement arrived at in mediation proceedings.

It is for this reason that most parties prefer to have a mediated settlement recorded as a consent decree or award. This grants it enforceability.

For India, signing of the Singapore Convention is expected to boost the confidence of investors and also provide a positive signal to foreign investors about India’s commitment to adhere to international practice on alternative dispute resolution.

Even though mediation is extremely useful and is an excellent dispute resolution mechanism, the fact that it is non-binding (and consequently dependent on the volition of the disputing parties) makes it vulnerable to misuse.

In that sense, this decision by the Cabinet is likely to encourage the adoption of tiered dispute resolution clauses, first providing for mediation and then proving for arbitration, said Nishith Desai on 2 August 2019.

“The upside of a dispute quickly resolved by mediation is too alluring to not consider. Once can also expect the Government to roll out a detailed framework within which mediation in India and mediated settlements will operate,” said the consultancy.

Mediation is an interactive process where a neutral third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques.

Mediation is focused upon the needs, rights, and interests of the parties. Mediation is voluntary and non-binding. Mediation is not an adversarial process. Rather, a mediator is facilitative.

The Singapore Convention aims to provide a global framework for the enforcement of mediated settlement in international commercial disputes arising from mediation.

Putting it simply, it aims to do for international mediation what the New York Convention did for international arbitration.

Upon its ratification and coming into effect, the Singapore Convention is expected to provide impetus to mediation as a method of resolving commercial disputes.

The treaty comes into effect six months after the ratification of 3 countries. Thus far, countries, including the United States of America and China, have indicated their willingness to sign and ratify the Singapore Convention.

“This demonstrates the widespread acceptance of the need of the treaty. It is truly the need of the hour,” said Nishith Desai Associates.

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