In a boost for country's Make in India ambitions and the plans for setting up an International Financial Services Centre (IFSC) in the city, Mumbai will soon get the first international arbitration centre which will be on the lines of global centres like London and Singapore.
"The Mumbai Centre for International Arbitration (MCIA) will be ready by July. We will move it to its permanent location in the IFSC building in Bandra Kurla Complex (BKC) later," a senior official who is involved with the exercise told dna. "This will be the first in India and match global standards," he added.
The centre — which will be temporarily located in one of Mumbai's central business districts — will be on lines of arbitration institutions like Singapore (SIAC), France (ICC) and London (LCIA). The MCIA is expected to attract manufacturing and investments to India and Maharashtra by creating a legal and regulatory framework and reassuring the international and domestic business community through a strong system which will help enforce contracts. This institutional arbitration and dispute resolution setup will be on the lines of global systems.
Unlike court proceedings, arbitration is seen as less formal and cost and time effective. Officials admit that for the IFSC to succeed, dispute redressal mechanisms need to be world-class and point to the example of London. Taxation laws will also have to amended to attract investments.
In 2007, a high powered expert committee on making Mumbai an international finance centre had submitted its report to the Centre.
For establishing the IFSC, the Maharashtra government has already set up a task force under union minister of state for finance Jayant Sinha which also consists of BJP MP from Mumbai North Central Poonam Mahajan, chief secretary Swadheen Kshatriya, senior officials from the state and central governments. It has chief minister Devendra Fadnavis' officer on special duty Kaustubh Dhavse as the member convenor.
The set up of the MCIA, which has been registered as a not-for-profit charitable trust, will also boost the IFSC plans. The state government plans to operationalise the IFSC by around 2018. The set up of the MCIA will also help Mumbai emerge as an international arbitration hub and also incubate a wider economic ecosystem.
"The MCIA will help retain around $5 to 10 billion in India (through dispute resolution). Otherwise, this money would have headed to locations like Singapore and London," the official noted.
The MCIA drafting committee, which consists of domestic and international experts in arbitration, is working on the arbitration rules, which have also been reviewed by jurists and leading lawyers like former Supreme Court judge BN Srikrishna, Fali Nariman and Harish Salve.
Incidentally, the Singapore International Arbitration Centre (SIAC), which has its overseas liaison office in Mumbai, notes on its website that: "Indian parties contributed to the highest number of filings at SIAC in 2013, generating 85 of 259 new cases. This growing trend follows on from recent years where the number of new cases involving at least one Indian party has grown steadily and for instance, increased tenfold in the period from 2001 to 2012. In 2014, India remained a strong contributor to SIAC's international caseload, ranking third among SIAC's top foreign users."
The MCIA will organise global outreach programs to market the institution and also Mumbai and Maharashtra. It will also train government employees on international best practices in arbitration.
