Date:05/09/2008 URL: http://www.thehindu.com/2008/09/05/stories/2008090553421500.htm

National

Arbitration court’s Regional Facility coming up in Delhi

Legal Correspondent

NEW DELHI: The Union Cabinet on Thursday gave its nod for setting up a Regional Facility (RF) of the Permanent Court of Arbitration (PCA) for South Asia in New Delhi. As a PCA organ, it is potentially capable of providing the same services as do the PCA headquarters in The Hague in the Netherlands.

Law Secretary T.K. Viswanathan had taken the initiative for establishing the RF and worked out the modalities. The mission would be to promote the use by states, non-state parties and private parties in South Asia of the PCA’s mechanisms of dispute resolution cited in the United Nations Charter.

The Cabinet approval was for signing and ratification of the “Host Country Agreement between the Government of India and the Permanent Court of Arbitration” for setting up the RF; and issue of a notification under the United Nations (Privileges and Immunities) Act, 1946 for extending privileges and immunities.

The RF will provide a forum for arbitration in India of disputes arising in the country and in the region, both between states and between a state and a non-state entity such as foreign companies which have made investments. The cost of international arbitration will be reduced, which will also encourage more frequent recourse to this means of settling disputes.

The RF will enable more legal experts from India to participate in arbitrations conducted under its auspices and to acquire expertise, which will have a beneficial effect on domestic arbitrations. Parties can on their own select knowledgeable persons as arbitrators for an amicable settlement.

The RF will further strengthen the government’s policy for promoting alternative methods of dispute resolution.

The renewed confidence in arbitration is an incentive to the states to facilitate the resolution of disputes in the public and private spheres. The use of the PCA’s conciliation rules of procedure and of the RF as the forum of choice can improve the perceived investment climate in certain countries of South Asia.

It will enhance the image of transparency, predictability and reliability in the administration of justice there.