The Bhutanese Leading the way.
From the 182 provisions of the Alternative Dispute Resolution (ADR) Act of Bhutan, 2013, the Legislative Committee (LC) during the 5th Sitting of National Council, proposed 159 provisions and introduced four new provisions. However, 1 new provision and 2 existing provisions will be revisited during the upcoming sitting on 6th December 2024.
The LC Chairperson, Pema Tashi, shared the amendments aim to address challenges affecting arbitration in Bhutan, streamline processes, ensure arbitrator competence, and minimize judicial reviews.
Furthermore, it would position Bhutan as a trusted international arbitration hub by aligning its framework with the UNCITRAL Model Law on International Commercial Arbitration.
The committee members also highlighted the possible economic benefits of the amendment.
The four new provisions include Chapter 1, Section 21(A), which requires the government to provide adequate financial support for the sustainable operation of the ADR Centre and Chapter 3, Section 44(A), mandating that all domestic arbitrations be conducted by the ADR Centre of Bhutan in accordance with the Act.
In addition, Chapter 8, Section 134(A), requires the ADR Centre to scrutinize draft awards prior to issuance, with its opinion to be considered by arbitrators and Chapter 10, Section 151(A), which allows appeals against awards in domestic arbitration.
However, MPs raised concerns regarding Section 21(A). MP from Trashigang, Sonam Tobgyel, expressed concerns over the independency of the ADR Centre if it is to receive financial assistance from the government.
The LC Chairperson said that currently the Centre is not financially strong and assistance from the government, for the time being, would help address the issue.
Concerns on LC’s recommendations on Section 5 and Section 14 were raised.
On Section 5, amendments were made to appoint a Secretary General (SG) rather than the prevalent chief administrator who would administer the affairs and business of the Centre and frame related policy.
The LC Chairperson shared that appointing SG is in alignment with the international practices to maintain the independence of the centre.
He shared that the ADR Centre is quasi-judicial and independent.
Similar amendments on Section 14 were made regarding the change of chief administrator to SG, and the employees who are civil servants shall resign from the civil service upon appointment to the Centre.
Several MPs expressed the section needs further discussion as the centre is still receiving support from the government and asking people to resign from their jobs specially from the civil service would further discourage them.
Deputy Chairperson of NC, Dago Tsheringla, who is also a member of LC, shared that most people have the misconception that the centre only caters to contractors, and he further clarified that it is open to parties from private sectors, business owners, civil servants and or anything related to drawing contract agreement or supplies.
Several MPs questioned the reason for the reduction of the number of days from 30 days to 15 in Section 57.
Section 57 stated that upon appointment of the arbitrators by the parties, if the arbitrators do not communicate to the parties regarding the appointment of the presiding arbitrator within thirty working days of their appointment, (for international arbitration and within fifteen working days for domestic arbitration) the Centre shall, upon request by a party, appoint the presiding arbitrator. The clause in the bracket was added.
He shared that the reduction in the number of days was made considering the financial constraints and for fast completion of cases.
Further, MPs made suggestions to appoint CEO rather than SG, upscaling entry position level, qualification for the position to possess at least a Master’s degree and form board members for independency.
