The Asian Development Bank (ADB), which is funding the metro project in Mumbai, has finalised Singapore as its arbitration centre destination. As a result, the centre for international bidders will be Singapore whereas that for domestic bidders will be Mumbai.
An arbitration centre is where disputes between companies or individuals are resolved sans litigation. Mumbai got its first international arbitration centre in 2016, which was inaugurated by Maharashtra Chief Minister Devendra Fadnavis. The Mumbai Centre for International Arbitration (MCIA) has been recognised as an authorised institution.
At present, most of the global business disputes involving Indians land in the Singapore or the London arbitration centres. The total outflow of funds to resolve such cases, complete with logistics and other related expenditure, works out to around USD5 billion, sources said. According to a study conducted by the Singapore International Arbitration Centre, almost 30 per cent of the disputes it hears annually relate to matters involving Indian businesses. Also, the number of disputes it settled between 2001 and 2013-14 shows a ten-fold increase.
Pravin Darade, additional metropolitan commissioner, MMRDA, said, “We have accepted the demand of ADB. International bidders will go to Singapore for arbitration while domestic bidders can approach the MCIA.”
Maharashtra is the first state to have an arbitration policy. It was launched to encourage ‘Make in India’, where businesses entering the country need not approach other countries for arbitration.