ICADR Challenges New Delhi International Arbitration Centre Ordinance; Delhi HC Seeks Govt Response [Read Petition]

The Delhi High Court today sought the response of the Central Government in a petition challenging the New Delhi International Arbitration Centre Ordinance 2019, which has resulted in the take over of the International Centre for Alternative Dispute Resolution set up in the year 1995.

The Ordinance was promulgated on March 2 stating the reason that ICADR has not been able to "actively engage and embrace developments in the arbitration ecosystem" and "to create a reputation par excellence".

As per Section 7 of the Ordinance, all assets are transferred to and vested with the Central Government.

Faced with imminent take over of its assets, ICADR rushed to the High Court challenging the validity of the Ordinance promulgated on March 2, which has "eliminated the very existence of the society".

It contends there was no emergent situation which justified the promulgation of the Ordinance and hence does not satisfy the test of urgency under Article 123 of the Constitution of India. Referring to the seven judges bench decision of the SC passed in  Krishna Kumar Singh Vs. State of Bihar, the society contends that the Ordinance has been passed by the government acting as a "parallel source of legislative power"

ICADR is a society formed under the Societies Registration Act. The Chief Justice of India Ranjan Gogoi is  its ex-officio Chairman, and it works under the aegis of Supreme Court of India with its headquarters in New Delhi and regional centres at Hyderabad and Bengaluru. The committee constituted for the upgradation of the society consists of eminent persons like Justice Chandrachud, Khanwilkar,Nageswar Rao, Attorney General K K Venugopal and Senior Advocate F S Nariman. 

Over the years, the society has built liasion with several reputed institutions across the world and has created a reputation for itself in the field of alternate dispute resolution, states the petition.

It is stated in the petition that a notice was issued by the Union Law Ministry on March 3 asking ICADR to deliver all its assets and documents to the Ministry at once. 

"It is well settled that an Institution can be taken over only if there are allegations of financial irregularities or mismanagement. There is no such case in the case of ICADR. In the last five years not even a single penny has been received from the Central Government either as grant-in-aid or otherwise and so no case of takeover of the assets and properties of the society is made out", states in the petition filed through Advocate Ritesh Agrawal. 

The society challenges the Ordinance as violating Articles 14, 19(1)(g) and 300A of the Constitution of India. The immediate take over will leave its employees and officers at lurch, states the petition.

During the admission hearing today, the bench of Chief Justice Rajendra Menon and V K Rao made oral observations wondering about the urgency to take over ICADR. The bench also orally observed that ICADR should be permitted to function. 

Senior Advocate Dushyant Dave appeared for the petitioner.

The Government has been directed to file its counter-affidavit within two weeks.

The Ordinance was brought by the Government after the Bill introduced for the same purpose could not get passage in Parliament in the budget session. Though the Bill was passed by the Lok Sabha, it could not get clearance from Rajya Sabha before the expiry of budget session.

Read Petition