Government proposals a new platform similar to NJDG for resolving government arbitration disagreements
The Ministry of Law and Justice in India has proposed the creation of a centralized Arbitration Portal, similar to the National Judicial Data Grid, as part of a broader initiative to reduce litigation, promote alternate dispute resolution, and improve governance in handling public disputes.
### Streamlining Arbitration Proceedings
The digital Arbitration Portal, managed by the Ministry of Law and Justice's Department of Legal Affairs (DoLA), aims to monitor and track all arbitration cases involving central government ministries, departments, and autonomous bodies. Each arbitration case will be assigned a unique case ID through the portal, facilitating efficient oversight and management of cases.
### Promoting Institutional Arbitration
The policy encourages the use of institutional arbitration over ad-hoc arbitration to enhance procedural efficiency and reduce delays in dispute resolution. A Committee on Appeals will evaluate the advisability of litigation for disputes involving amounts of ₹10 crore or less, further emphasizing the preference for institutional arbitration.
### Careful Use of Arbitration Clauses
Arbitration clauses will not be included routinely in government contracts but assessed on a case-by-case basis, with a financial threshold (disputes up to ₹10 crore) guiding whether to pursue arbitration or litigation. This approach responds to concerns over the high volume of challenges to arbitral awards by public sector undertakings, which had led to prolonged litigation and increased legal costs.
### Improving Governance
Centralized data and monitoring intend to improve governance by making dispute resolution more transparent and accountable within government departments. Departments will be required to upload comprehensive case details, including the amount under dispute, on the Arbitration Portal. A periodic review of all arbitration cases will be conducted at the level of secretaries or senior officials in each department, with significant outcomes reported to the Department of Legal Affairs for reference and policy development.
### Balancing Efficiency and Governance
While the government is encouraging structured use of arbitration, there has been a recent policy shift cautioning against over-reliance on arbitration, especially for high-value disputes. This nuanced approach aims to balance efficiency, cost-effectiveness, and governance imperatives in handling public disputes.
In summary, the Central Government's initiative to create a centralized Arbitration Portal under the proposed Arbitration Act framework seeks to reduce litigation by streamlining and monitoring arbitration proceedings, promote alternate dispute resolution through institutional arbitration and careful use of arbitration clauses, and enhance governance by ensuring transparency and accountability in government-related arbitration cases.
- The digital Arbitration Portal, a centralized platform managed by the Ministry of Law and Justice's Department of Legal Affairs, will utilize technology to monitor and track all arbitration cases involving central government ministries, departments, and autonomous bodies.
- To balance efficiency, cost-effectiveness, and governance imperatives, the policy encourages the use of institutional arbitration over ad-hoc arbitration, incorporating technology to facilitate efficient dispute resolution and reduce delays, while also implementing careful scrutiny of arbitration clauses in government contracts.
