An IFSC International Court — having powers similar to a High Court — should be set up for dealing with all alternate dispute resolution matters arising out of international financial services centres in the country, according to a report from an expert committee set up by IFSCA for drafting rules for an International Arbitration Centre at Gift City.

Laying down several guidelines and suggestions for setting up of an “autonomous” Alternative Dispute Resolution Centre or ADRC in Gift City, the panel stated that a bench of the Gujarat High Court should be designated to deal with matters arising out of the ADRC in the Gift City in Phase-1, immediately after constitution of an ADRC. 

“In Phase-II, a separate High Court shall be established for all IFSCs in India. This High Court shall be named IFSC International Court and shall have all powers of a High Court other than the writ and criminal jurisdiction. This court shall act as the court of first instance and the court of appeal for all ADR matters arising from IFSCs. In Phase-III, international judges may be allowed to sit in the IFSC International Court. This is the prevalent practice in Singapore and Dubai. Many retired Indian judges are already providing their services abroad to ease the interpretation of Indian law. Phase-II and Phase-III may require amendments to the Constitution of India. Countries like Singapore and Dubai have amended their respective constitutions to allow international judges,” states the report filed by the committee headed by MS Sahoo, Distinguished Professor, National Law University, Delhi.

International judges

“The government is examining the proposed amendments that need to be made. Once that is done, the ADRC will be set up,” K Rajaraman, chairman IFSCA, told businessline. “The report also talks about setting up a panel with international judges. Those will be subsequently taken up by the government,” he added.

The IFSCA committee also proposed to use four extant legislations, namely, the International Financial Services Centre Authority Act of 2019, the Arbitration and Conciliation Act of 1996, the Mediation Act of 2023 and the Special Economic Zones Act of 2005 — with minimum changes — to develop and support the ADRC at Gift City.

The proposed ADRC envisages resolution of disputes emanating from contracts executed anywhere in the world, under laws of any jurisdiction, among parties from any nation. The committee proposes IFSCA and the government to promote the setting up of ADRC in Gift City and also provide financial support.

The Committee recommends that the ADRC be established as a section 8 company (not-for-profit) under the Companies Act, 2013. It is the typical structure adopted by all international institutions providing ADR services to avoid conflict of interests.  “ADRC shall be autonomous with its own self-regulating institutional rules of procedure. It shall amend its rules and issue guidance notes for practitioners on its own from time to time like any other international ADRC, stated the committee that studied the regulatory and institutional frameworks of Singapore International Arbitration Centre (SIAC), Singapore International Commercial Court (SICC), Hong Kong International Arbitration Centre (HKIAC), the London Court of International Arbitration (LCIA), and Dubai International Arbitration Centre (DIAC) among others. 

The ADRC’s governance structure will include a Board of Directors responsible for corporate governance and regulatory compliance, an International Advisory Council comprising 10-15 global experts providing strategic guidance, an Executive Council offering procedural counsel to the Secretariat and a Secretariat managing day-to-day operations, headed by a CEO, the report added. 

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