Supreme Court recognises MCIA as an appointing institution

In what may be described as a first, the Supreme Court of India has invoked its power under Section 11 of the Arbitration and Conciliation Act, 1996 to refer a matter to the Mumbai Centre for International Arbitration (MCIA)..The order has been passed under Section 11(6) of the Act, which allows parties to approach the Supreme Court for appointment of arbitrator, under certain circumstances. The Apex Court, through its order, has referred the case to MCIA for appointing an arbitrator..The case relates to a dispute between top drug maker Sun Pharmaceutical Industries Limited and Nigeria-based Falma Organics Limited..The MCIA was launched in October 2016 as the first of its kind institutional arbitration centre in India, filling in the void which existed in the Indian arbitration regime inasmuch as arbitration was always ad-hoc..Speaking to Bar & Bench, a delighted Madhukeshwar Desai, who is the CEO of the MCIA, commented,.“While there is much left to be done, India as a jurisdiction for arbitration has developed significantly over the past couple of years. The Courts, Government and the legal community have all played significant roles to that end. The MCIA was established to bring international best practises to arbitration in India, and I am glad that efforts to do so have resulted in the Supreme Court reposing faith in the institution. I would see the Supreme Courts decision as a logical step towards developing India as a favourable jurisdiction for arbitration.”.While parties may have in the past approached the court(s) requesting for appointment of an arbitration centre to act as appointing authority, such a request was never entertained..Through its order, what the Apex Court has essentially done is assigned its power to this institution..Speaking to Bar & Bench, Nakul Dewan, a lawyer practising in the Supreme Court, added,.“The Court’s decision to refer the appointment of the arbitrator to the MCIA is a booster for MCIA’s credibility as a leading centre for administering international commercial arbitrations in India. .It is also a positive step for the Court to have involved a leading and credible institution in the process of appointments. A good arbitral institution has invaluable knowledge about arbitrators from around the world, including their expertise, experience, credibility and availability. That allows the institution to be extremely well placed to recommended the best person suited for a particular case and any assistance which such an institution can give the Court will only auger well towards getting the right person to adjudicate the dispute.”.For a country, which is otherwise not considered as an ideal location for arbitration, this move by the Supreme Court provides the much need impetus to boost institutional arbitration in India..While historically India may have been viewed as a jurisdiction where interference by the judiciary thwarts the process of alternate dispute resolution, this ruling, however, sends a clear message to change that. It further encourages foreign as well as domestic participation to incorporate MCIA rules in their commercial arrangements..(Read the order)