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Less than five months after the Indian chapter of the London Court of International Arbitration announced the end of its “physical presence” in the country, an international arbitration centre shall be established in the country – the Mumbai Centre for International Arbitration (MCIA).
Headed by Madhukeshwar Desai, the MCIA is a not for profit organization which is expected to handle its first arbitration matter very soon.
One of the aims of the MCIA, says Desai, is to bring global best practices in to the country. The Rules have been finalised and are effective June 15, 2016.
But will it work?
Undoubtedly, the location in the country’s financial centre is going to be one of the things going in MCIA’s favour. From September onwards, the MCIA shall be functioning out of Express Towers at Nariman Point. Its neighbours will include Shardul Amarchand Mangaldas, a host of law firms, and even the State Parliament.
As for the Maharashtra government’s role in the venture, Desai says that the MCIA does have the “support” of the state government. The national vice president of the BJP youth wing, Desai also says that the MCIA has strived to keep an “arms length” distance from the government.
“Keeping in mind the independence and credibility of the institution as paramount we have kept an arm’s length distance from the government.”
Ask Desai if MCIA will be a game changer, he says,
“The MCIA Rules, drafted by a committee of reputed international and domestic arbitration practitioners, allow for consolidation of proceedings, scrutiny of draft awards, emergency arbitrator for interim relief, cost-effective and transparent arbitration process, to name a few.”
The MCIA has certainly managed to pique the interest of law firms. The first Draft Rules Committee was co-chaired by Nish Shetty of Clifford Chance and Vyapak Desai of Nishith Desai Associates.
Desai also says that these rules have been approved by Justice Srikrishna, Fali Nariman and Harish Salve.
Speaking to Bar & Bench, Nakul Dewan is quite optimistic about the success of MCIA and says,
“We hope it’s a game changer for the way arbitrations are run in India.”
In terms of visibility then, the MCIA has certainly ticked all the right boxes.
But it is not only the initial stages that have attracted the big names. The MCIA Council has a mix of international and domestic arbitrators such as IBA President – David Rivkin, James Spigelman, Justice Rebello, Shreyas Jayasimha, Promod Nair, Senior Advocate Vikram Nankani, and Justice Nijjar.
“This brings credibility and transparency to the institution, and will also ensure that quality arbitrators are appointed for MCIA administered arbitrations.”
The MCIA’s main office, spread across 7,000 sq feet, will have ‘tuned for arbitration’ hearing rooms, breakout rooms, audio, video services, transcription services, etc. Desai says that it was the lack of these very facilities that often forced parties to either conduct arbitrations in hotels, or travel overseas.
Promod Nair, who is part of the MCIA Council, is also optimistic that MCIA will be a game-changer for institutional arbitration in India.
“Whilst there has been a substantial increase in India-related arbitrations in recent years, there has been no credible home-grown institution that has been able to inspire confidence in potential users (especially after the closure of LCIA India).
MCIA seeks to provide international-quality rules, a state of the art hearing facility and efficient administration of cases at competitive rates. This should be an irresistible combination for many Indian users and should also be an attractive option for users elsewhere and encourage them to arbitrate India-related disputes onshore.
India is on the road to becoming a more arbitration-friendly jurisdiction. The MCIA will play its part as a force for the good in this journey.”
Even though the groundwork appears to have been done, there is still a long way to go. Not only will the MCIA have to dispel the notion that arbitration is no longer an in-expensive, and time-efficient process.
Although the recent amendments have gone some way in instilling confidence, the fact of the matter is that arbitration matters continue to see a fair amount of litigation.
Tata Group General Counsel, Bharat Vasani says,
“Despite the amendments made to the Arbitration Act last year, many international parties may still not prefer India as the seat of arbitration because of the interventionist approach of our judiciary in the arbitration cases in the past.
I am, therefore, not entirely sure as to how many international parties would be willing to accept MCIA as the arbitration venue and Mumbai as the seat of arbitration, given the delays associated with our judicial system.
Although I am also not ruling out the possibility of MCIA doing very well for India and shaping up to be a world class arbitration centre on the lines of Maxwell Chambers, Singapore. I wish them all the best”
In addition, the MCIA will have competition in the form of one of the region’s most successful arbitration centres – the SIAC. Although the office in Mumbai acts as a liaison office, the SIAC not only enjoys greater visibility and brand awareness, but also comes with a proven track record particular for Indian parties.
On what would set MCIA apart from SIAC, Desai says,
“MCIA would offer world class services at Indian prices. Being an Indian institution, the MCIA would be better suited to administering cases in India, whilst not compromising on international best practices.”
In 2014, India remained a strong contributor to SIAC’s international caseload, ranking third among SIAC’s top foreign users. If the MCIA does indeed manage to wean away SIAC’s business, it bodes well for the future of arbitration in India. Desai also says that the MCIA will offer training programs so as to build a “larger pool of quality arbitrators”.
Now the larger question is whether Indian industry will see the benefits of ADR, and more specifically with the “made in India” arbitration centre.
You can access the rules and other details at http://mcia.org.in/