A non-government body called the Bhutan Alternative Resolution Center will be established just for the purpose.
The economic affairs minister, Khandu Wangchuk introduced the Arbitration Bill to the National Council (NC) last week. If the bill is endorsed by both houses of parliament, the center will be established.
The center was proposed as a non-government body to remove any doubt of government’s interference in the dispute resolutions if the government happens to be a party to the disputes. It will be managed by a Chief Administrator who will be appointed by the National Judicial Commission (NJC).
The government will not be obligated to provide grant to the center as a matter of rule, unless it is absolutely necessary for its sustenance.
On 9 February 2010, the government directed the Office of the Attorney General (OAG) to draft Alternative Dispute Resolution (ADR) Centers Bill by July 2011.
The need for such a bill is enshrined in Section 16 (21) of the Constitution which states: “Parliament may, by law, establish impartial and independent Administrative Tribunals as well as Alternative Dispute Resolution centers.”
The legal officer of the economic affairs ministry said the ADR law is necessary from an economic and a social perspective.
The economic development policy 2010 states: to encourage FDI, we have to create an enabling environment in our laws and policies. In 2010, the ministry had revised the FDI policy with improved processes and incentives for foreign investors.
“Another process to create an enabling environment is to reform the legal frameworks to allow settlement of commercial disputes outside courts,” said the legal officer.
For settlement of commercial disputes informally, many countries rely on the principles enshrined in UNCITRAL Model Law on International Commercial Arbitration 1985 and the New York Convention on Recognition and Enforcement of the Foreign Arbitral Award 1958.
For this reason, the Bill also incorporated many principles of the two Conventions. The Bill was also discussed with relevant stake holders.
The Arbitration center in Bhutan will function as a neutral, efficient and reliable dispute resolution service and will carry out administrative and secretarial functions as may be appropriate for the dispute resolution proceeding at the request of the parties.
It will also provide required facilities for the conduct of such a proceeding at the request of the parties.
The two dispute methods of arbitration and mediation both lack legal backing as of now. Mediation is practiced and recognized by court as long as there is a legally drawn settlement-agreement between the parties.
Previously the National Arbitration Committee allowed contractor’s dispute but now it will cover all forms of commercial disputes both national and international.
The arbitration award full and binding on the parties and if they are still not happy, they can petition to High Court, whereas whoever is unhappy with the mediation settlement can register a case before the court of law, added the legal officer.
In times to come, such centers may be established and also the Centre may strengthen such practices of dispute resolution through dissemination of information.
The National Assembly will deliberate the bill in the winter session of the Parliament.