J&K International Arbitration Centre (JKIAC)

The courts in Jammu & Kashmir are congested with long unsettled cases, and the scenario is that even in the wake of setting up different fast track courts the problem is far from being solved as pending cases are still accumulating. To manage such a situation Alternative Dispute Resolution (ADR) can be helpful mechanism where a dispute is produced before a third party called as Arbitrator for resolution subsequent to hearing the presentation of both parties. Lately, arbitration has been growing in use with more companies deciding to choose arbitration in commercial and consumer disputes. Due to this increased utilization, the methods for conducting ADR have expanded making it an even more practical and cost-effective solution for many types of business disputes or otherwise. Parties to the dispute choose ADR option either through inserting a clause in the agreement or a separate dispute resolution agreement, to resolve disputes instead of filing a lawsuit. In the case of arbitration, the parties have far more flexibility and can often select the arbitrator that will hear their case, typically selecting someone with expertise in the relevant field involved in the dispute. In this manner the emphasis can be on the considerable issues involved instead of on the complex procedural guidelines or rules.  The greater the expertise of the arbitrator, the less time that needs to be spent bringing the arbitrator up to speed. Alternative dispute resolution offers the advantage of getting the issue resolved quickly than would occur at trial which means less fees incurred by all parties. ADR permits more participation by the litigants and allows them an opportunity to tell their side of the story and have more control over the result than normal trials. Besides being affordable and less time consuming the process is essentially a private procedure wherein if the parties desire privacy, then the dispute and the resolution can be kept confidential. Arbitration puts and end to the dispute and the right to appeal is limited once the award is issued. This advantage gives the arbitration process and its award the distinction of finality which isn’t frequently present in a trial decision. Segment 89 of the Civil Procedure Code, 1908 gives a chance to the individuals, in the event that it seems to court there exists a chance of settlement outside the court. At that point, the court defines the particulars of the conceivable settlement and refers the same for Arbitration. However, due to specific reasons the said system has remained progressively dormant in Jammu and Kashmir. The refusal of such a system so far has resulted into a circumstance where the parties to the disputes are not able to secure speedy and less expensive justice. Arbitration is very useful instrument for settling disputes and setting up of Jammu and Kashmir International Arbitration Centre shall go a long way in its objects and requirements, all in light of a legitimate interest for the litigants. It is expected that this initiative will de-stress an overburdened legal framework and will improve the ease of doing business in Jammu & Kashmir.

The High Court of Jammu and Kashmir has obtained the endorsement to set up an International Arbitration Center, with offices at Srinagar and Jammu which will resolve disputes between different business houses, organizations or individuals. The center will be called “The Jammu and Kashmir International Arbitration Centre (JKIAC). The Srinagar office of JKIAC is intended to be set up in one of the buildings in the old Saddar Court Complex, Lal Chowk, Srinagar. Till the identified building at Srinagar is renovated and a suitable building is identified at Jammu, to start with, the Centre at Srinagar and Jammu  will be set up in buildings of Mediation Centre at Srinagar and Jammu. This is the first time an arbitration center will be set up as far as the Union Territory of Jammu and Kashmir is concerned. The local and other Indian businesses shall now have an option to approach the JKIAC for the speedy and expeditious resolution of disputes through an alternate dispute resolution mechanism. An essential factor to establish ease of doing business and pull in foreign direct investments is a solid arbitration eco-system. A center in J&K will deal with both these factors. The first IAC in India was the Mumbai Centre for International Arbitration (“MCIA”) set up at Mumbai in October 2016. The other prominent Indian arbitral institutions are the Indian Council of Arbitration (“ICA”), the Delhi International Arbitration Centre (“DIAC”), and the ICADR. However, the International Arbitration Centre at Singapore, London and Hong Kong has always been the preferred destinations for commercial arbitration for Indian parties.

The High Court has framed the Jammu and Kashmir International Arbitration Centre (JKIAC) (International Management Rules, 2020) so as to guarantee that the constitution of such offices is smooth and effective. The High Court’s Chief Justice shall be the Patron-in-Chief of the JKIAC. As per the rules, an Arbitration Committee is to be established to monitor and oversee the Center. The Committee will consist of three Judges of the High Court, the Advocate General, the Assistant Solicitor General attached to the High Court and three members to be nominated by the Chief Justice, out of whom at least one shall be, designated Senior Advocate, while the others may be arbitration experts. The JKIAC also has to prepare and maintain a Panel of Arbitrators, as approved by the Arbitration Committee from time to time. The empanelment of the arbitrators shall consist of former judges, former judicial officers, chartered accountants, bureaucrats, engineers, architects, professors etc. To supervise and manage the JKIAC, a secretariat consisting of Coordinator who shall be member of Higher Judicial Service and two additional coordinators who shall be Members of Judicial Service have to be appointed by the Chief Justice. The rules further envisage appointment of Chief Counsel and Deputy Counsel amongst Advocates having experience in the field of arbitration. For dealing with the arbitration proceedings in the Centre the Jammu and Kashmir International Arbitration Centre (Arbitration Proceedings) Rules, 2020 have been framed by the High Court. Similarly, for regulating the administrative fee of the center and arbitrator’s fee, “The Jammu and Kashmir International Arbitration Centre (Administration Pass and Arbitrator’s Fee) Rules, 2020” have been framed by the High Court.

In the last few years, institutional arbitration has become a preferred mode of dispute resolution in standardized contracts in India. Ad hoc arbitrations have its shortcomings and institutional arbitration without a doubt is a better alternative in relation to time, cost and efficiency in administration of disputes.  The establishment of JKIAC will greatly give benefit not exclusively to the lawyers but to the litigants as well. These centers will additionally extend faith of citizens in the Judicial System and shall make the Judicial System in J&K more responsive and more compelling. The need of great importance is to utilize innovation and technology all the more effectively to help the arbitration process. The utilization of instant transcribing to record evidence and video conferencing for conducting at least procedural hearings are fundamental. Hopefully, with the coming time, JKIAC will set itself apart by giving fast justice and bringing in technology into arbitration as well.

The Authors Viqas Malik and Romaan Muneeb are Lawyers at the J&K High Court and Partners at “Malik and Romaan Law offices, Srinagar”.