THE INTERNATIONAL RELATIONS

1. INDIA-CENTRAL ASIA VIRTUAL SUMMIT

THE CONTEXT: Indian Prime Minister hosted the first India-Central Asia Summit in virtual format which was attended by Presidents of the Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Turkmenistan and Republic of Uzbekistan.

THE EXPLANATION:

• During the summit, a comprehensive Joint Declaration was adopted by the leaders that enumerates their common vision for an enduring and comprehensive India-Central Asia partnership.
• The Prime Minister and the Central Asian Leaders discussed the next steps in taking India-Central Asia relations to new heights. Also, leaders agreed to institutionalize the Summit mechanism by deciding to hold it every 2 years on regular meetings of Foreign Ministers, Trade Ministers, Culture Ministers and Secretaries of the Security Council to prepare the groundwork for the Summit meetings. An India-Central Asia Secretariat in New Delhi would be set up to support the new mechanism.
• The Leaders discussed the cooperation in areas of trade and connectivity, development cooperation, defence, and security and, in particular, oncultural and people to people These included a Roundtable on Energy and Connectivity;Joint Working Groups at senior official level on Afghanistan and use of Chabahar Port; showcasing of Buddhist exhibitions in Central Asian countries and joint counter-terrorism exercises.
• Prime Minister also discussed the evolving situation in Afghanistan with the Central Asian leaders. The leaders reiterated their strong support for a peaceful, secure, and stable Afghanistan with a truly representative and inclusive government.

Value Addition:

India- Central Asia relations:

• India invited 5 central Asian countries leaders for 73^rd Republic Day chief guest, however the world witnessing the omicron virus disease, it has been cancelled. On the light Indian Prime Minister hoisted the first India- Central Asia virtual Summit. This summit  was part of India’s reach-out to the former Soviet States, that intensified since 2015, when Prime Minister visited all five capitals.
• India joined the Shanghai Cooperation Organisation (SCO) in 2017, which all Central Asian States other than Turkmenistan are members of.
• The India-Central Asia dialogue was launched in 2019, and in July 2021, External affairs Minister attended the Central Asia-South Asia connectivity conference.
• Maritime connectivity remains important, this summit strengthen India’s initiatives through Chabahar and through the al North South Transport Corridor.
• It is also part of the present government’s attempts to bring together immediate neighbours and “far neigh- bours” in a group format on multiple occasions. Govt. invited SAARC and BIMSTEC group leaders to his swearing in ceremonies in 2014 and 2019 respectively and invited 10 leaders of the ASEAN as Republic Day guests in 2018.

THE HEALTH AND SOCIAL ISSUES

2. FIRST HUMAN PAPILLOMA VIRUS (HPV) VACCINATION DRIVE IN DELHI

THE CONTEXT: The Human Papilloma Virus (HPV) vaccination drive in Delhi, which is aimed at preventing cervical cancer among young women, has been one of the casualties of regular classes in schools being suspended for the Covid-19 pandemic.

THE EXPLANATION:

• Delhi became the first state in the country in November 2016 to launch HPV vaccination as a public health programme. In 2017 and 2018, Punjab and Sikkim, too launched their own programmes.
• According to the officials, around 13,000 girls received the vaccines in Delhi from 2016-2020. But closed schools resulted in a steep decline.

What is Human Papilloma Virus (HPV)?

HPV infection is a viral infection that commonly causes skin or mucous membrane growths (warts). There are more than 100 varieties of human papillomavirus (HPV). Some types of HPV infection cause warts, and some can cause different types of cancer.

HPV is a group of more than 150 viruses that cause ‘papilloma’, or warts, in parts of the body, including the genital areas. It is primarily spread by skin-to-skin contact and is responsible for a number of diseases, including cancers, especially cancer of the cervix (the neck of the uterus).

India’s Status:

• India has a high caseload of cervical cancer, and it ranks second among all cancers in Indian women, after breast cancer. And HPV is believed to be associated with more than 80 per cent cervical cancer cases.
• According to government data, an estimated 1,23,907 new cervical cancer cases are detected annually in India. Every year, 77,348 deaths occur from it. At any given point of time, nearly 4,20,000 cervical cancer cases are present in the country.

Approval for inclusion in UIP awaited

According to records of the World Health Organization (WHO), over 100 countries across the world have fully or partially introduced HPV vaccines in their national healthcare schedules — they include the US, UK, Canada, Australia, South Africa, Brazil, Argentina, New Zealand, Spain, Portugal, France and Japan.

India is not one of them, according to records of the central government and the WHO.

THE ECONOMY

3. THE VIRTUAL BANKING

THE CONTEXT: According to a new paper from the Bank for International Settlements, the rise of virtual banking across the Asia region will boost financial inclusion, but regulators will need to ensure consumer data is protected.

THE EXPLANATION:

• According to the BIS paper, India and Singapore may offer a model for creating a platform under central bank supervision that facilitates the sharing of personal data with financial service providers, with customer consent. At the same time, new data — or information capital — can be used to make decisions on lending instead of relying on traditional sources of collateral, which regulators will also need to monitor.
• Also, the research noted, the access to bank accounts is increasing, the use of the financial system to save and borrow is low both for developing economies and those with high levels of income and education, a gap that can be closed by technology.
• Also, its suggested, under debt resolution regimes where both virtual and high street banks are subject to the same regulations, unsecured lending poses a higher risk of loss to lenders. Keeping losses at a minimum requires more frequent assessment and the use of tailored loans that meet repayment abilities.

About Bank for International Settlements

• It carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction.
• Established in 1930, the BIS is owned by 63 central banks, representing countries from around the world that together account for about 95% of world GDP.Its head office is in Basel, Switzerland and it has two representative offices: in Hong Kong SAR and in Mexico City, as well as Innovation Hub Centres around the world. India is a member.

What is Virtual Banking?

The Virtual Banking is the provision of accessing the banking and related services online without actually going to the bank branch/office in person. Simply, availing the banking services through an extensive use of information technology without any requirement for the physical walk-in premises is called as virtual banking.

THE INTERNAL SECURITY AFFAIRS

4. GORKHA, TIWA MILITANTS SURRENDER IN ASSAM

THE CONTEXT:With over 200 militants of the United Gorkha People’s Organisation (UGPO) and Tiwa Liberation Army (TLA) formally laying down arms in a ceremony in Guwahati.
THE EXPLANATION:

• The organisations are the Tiwa Liberation Army (TLA) and the United Gorkha People’s Organisation (UGPO).Formed in 2014 to cater to the aspirations of the Tiwa community, the TLA was active in the Morigaon, Nagaon and West Karbi Anglong districts of central Assam.
• The UGPO, formed in 2007, was mostly active in the Bodoland Territorial Region and the Biswanath district.
• During the function, the Chief Minister also distributed a financial grant of ₹1.5 lakh each to 462 members of five other extremist groups who had surrendered earlier.These disbanded groups are Rabha National Liberation Front, Adivasi Dragon Fighters, National Santhal Liberation Army, National Liberation Front of Bengalis and United People’s Revolutionary Front.
• According to the Assam Chief Minister, only two active insurgent groups now remain in the state, namely the United Liberation Front of Asom-Independent (ULFA-I) and Kamtapur Liberation Organisation (KLO).

QUICK FACTS:

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY 28^TH JANUARY 2022

Q. Which of the following tribes do not have major population in state of Assam?

a) Tiwa

b) Bodo

c) Rabha

d) Angami

ANSWER FOR 27^TH JAN 2022

Statement 1 is incorrect: National awards such as Bharat Ratna, Padma Vibhushan, Padma Bhushan and Padma Shri do not amount to titles within the meaning of Article 18(1) of the Constitution and thus are not to be used as prefixes or suffixes to the name of the recipient in any manner.

• Article 18(1) abolishes all titles. It prohibits the State to confer titles on anybody whether a citizen or a non-citizen. Military and academic distinctions are, however, exempted from the prohibition. Thus, a university can give title or honor on a man of merit.

Statement 2 is incorrect: Padma Awards were instituted in 1954 to be awarded to citizens of India in recognition of their distinguished contribution in various spheres of activity.

• The government suspended the practice of granting the Padma awards for two years in 1977. It was again suspended during mid-1992 when 2 PILs were filed in the High Courts of India
• They are given in three categories: Padma Vibhushan (for exceptional and distinguished service), Padma Bhushan (distinguished service of higher-order) and Padma Shri (distinguished service).

Statement 3 is incorrect: A maximum of 3 people can be awarded the Bharat Ratna.

The total number of Padma awards to be conferred each year is limited to 120. But the count excludes posthumous awards and any non-resident Indian or Overseas Citizen of India or foreign-based winners.

1. The pandemic showed us our collective power READ MORE
2. Why be reactive when you can be proactive? READ MORE
3. Acting in Uncertainty READ MORE

1. The state of India’s forests: Losing forests, gaining plantations READ MORE
2. India State of Forest Report 2021: Key takeaways READ MORE
3. Indigenous communities at higher risk of climate change-induced flooding, study shows READ MORE

1. Open the schools: Schools must reopen as severe cases dipand vaccination coverage increases READ MORE
2. The pandemic showed us our collective power READ MORE

1. Finding a way to share IAS officers READ MORE
2. Scaling up higher education in India READ MORE
3. Politics of freebies: ECI should curb menace, ensure level playing field READ MORE
4. Rethink on changes in All-India Services Rules READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. India-Central Asia Virtual Summit READ MORE
2. Drug-Resistant Malaria Is Emerging in Africa. Is the World Ready? READ MORE
3. DCGI grants conditional market approval for Covishield, Covaxin for use in adult population READ MORE
4. Climate change will force transboundary fish stocks to move from habitats, migration paths: Report READ MORE
5. Asia’s virtual banks need oversight to guard data, India could offer model, BIS says READ MORE
6. Delhi, 1st state to launch HPV vaccine for cervical cancer, sees numbers fall. Blame pandemic READ MORE
7. Gold imports by India fasten to decade-high as jewellery sales double READ MORE

Main Exam   

GS Paper- 1

1. The state of India’s forests: Losing forests, gaining plantations READ MORE
2. India State of Forest Report 2021: Key takeaways READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Finding a way to share IAS officers READ MORE
2. Scaling up higher education in India READ MORE
3. Politics of freebies: ECI should curb menace, ensure level playing field READ MORE
4. Rethink on changes in All-India Services Rules READ MORE

SOCIAL ISSUES

1. Open the schools: Schools must reopen as severe cases dipand vaccination coverage increases READ MORE

INTERNATIONAL ISSUES

1. Diplomatic Boycott Of Beijing Olympics May Have No Serious Implication For China READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Understanding the formulation of the Budget READ MORE
2. India’s economy and the challenge of informality READ MORE
3. Rising unemployment: Joblessness, poverty leading to distress, societal tensions READ MORE

ENVIRONMENT AND ECOLOGY  

1. Indigenous communities at higher risk of climate change-induced flooding, study shows READ MORE

SECURITY

1. No online targeting: New EU law should become the global benchmark READ MORE

TECHNOLOGY

2. Explained: How 5G network puts airplanes at risk READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. The pandemic showed us our collective power READ MORE
2. Why be reactive when you can be proactive? READ MORE
3. Acting in Uncertainty READ MORE

Questions for the MAIN exam

1. Explain the need for the formalization of the Indian economy. Do you think the steps taken by the government in this direction are effective? Justify your opinion.
2. Distinguish between Capital Budget and Revenue Budget. Explain the components of both these Budgets. (UPSC Mains 2021, GS-3)

QUOTATIONS AND CAPTIONS

• The ignorance of one voter in a democracy impairs the security of all.
• Policy efforts to formalise the economy will have limited results as the bulk of informal units are petty producers.
• It needs to be appreciated that informality is now differentiated and multi-layered. Industries thriving without paying taxes are only the tip of the informal sector’s iceberg.
• A mere registration under numerous official portals will not ensure access to social security, considering the poor record of implementation of labour laws.
• Proposed amendment to service rules is needed to meet shortage of personnel, but Centre must dispel states’ fears about overreach.
• The role of the proposed Higher Education Commission must include both regulation and development of the sector.
• The ECI needs to frame rules that prohibit or restrict populist announcements during the last six months of a government’s tenure, and not just after the model code of conduct is enforced.
• Half-hearted measures like a diplomatic boycott of the Winter Olympic games will make no dent in China.
• A self-confident China does not need to prove its capabilities to the world, but the virus remains a major concern.

50-WORD TALK

• The violent protests in UP and Bihar over Railways recruitment are a tragic reflection of India’s, and more so the heartland’s, unemployment crisis. But this crisis cannot be resolved through more Railways, PSU banks or security forces jobs. Governments need to facilitate creation of more opportunities in manufacturing, services, business.
• The issue of the control of the AIS has been coming up repeatedly. The two recent examples are of Tamil Nadu and West Bengal. The issuance of transfer orders by the Centre to AIS officers serving in the states, without the approval of the states concerned, is rightly being seen as an infringement of the federal spirit. At the same time, the situation leading to the proposed change of rules needs attention.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

THE INTERNATIONAL RELATIONS

1. AMERICA’S NEW LEGISLATION: COMPETES ACT 2022

THE CONTEXT: The United States House of Representatives unveiled the ambitious America
Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength
Act of 2022, or the America COMPETES Act of 2022, which proposes to open up new vistas for
talented individuals from across the world with a new start-up visa.

THE EXPLANATION:

• The bill provides $52 billion to encourage more semiconductor production in the US, and
  $45 billion for grants and loans to improve supply chain resilience and manufacturing, among other programmes.
• The bill also authorize $600 million a year to construct manufacturing facilities to make the US less reliant on solar components made in Xinjiang, China.

What are some of the specific provisions in the Act?

• The Act amends the Immigration and Nationality Act to create a new classification of “W” non-immigrants for entrepreneurs with an ownership interest in a start-up entity, essential employees of a start-up entity, and their spouses and children.
• It also directs the Secretary of Homeland Security to establish procedures for foreign
  nationals with an ownership interest in a start-up entity to self-petition for classification as
  a W-1 non-immigrant, and to receive extensions of such classification for up to eight years
  if the entity meets certain growth benchmarks.
• It also provides for a limited number of W-2 visas for personnel who are essential to the
  growth and success of the start-up entity if the start-up serves as the basis for the W-1
  status of a founder.

What would the signing of this bill into law mean for Indians?

• It is expected to create more opportunities in the US for Indian talent, and for skilled
  workers.
• Every year, Indians and Indian companies corner a lion’s share of the H-1B work permits
  issued that year. With this new category, Indian professionals will likely have a better shot
  at opportunities that the Act is likely to provide.

THE ECONOMY AND ENVIRONMENT

2. HIT TO EDIBLE OIL PRICES IN THE COUNTRY

THE CONTEXT: India is set to boost its sunflower oil imports from Argentina and Russia due to
worries that shipments from Ukraine, the biggest supplier, will be disrupted if Russia invades.

THE EXPLANATION:

• Ukraine is India’s biggest supplier of sunflower oil. Any escalation in Russia-Ukraine tension
  is likely to hit edible oil prices in the country as 70% of its requirement is imported.
• The South Asian nation, also the world’s biggest importer of palm and soybean oils, bought
  about 60,000 tons of sunflower oil from Russia and Argentina for shipments.
• Ukraine and Russia account for almost 80% of the world’s sunflower oil shipments. India
  bought 1.89 million tons of the crude variety of the cooking oil in the year ended October,
  2021 with Ukraine supplying almost 74% and Argentina and Russia each accounting for
  about 12%.

THE ENVIRONMENT AND ECOLOGY

3. WHAT IS NEMATODE INFESTATION?

THE CONTEXT: According to Andhra Pradesh’s Naupada swamp forest officials, over 150 spot-billed
pelicans have succumbed to the infestation since December 2021, with 21 birds died in another
single day.]

THE EXPLANATION:

• A nematode infestation has resulted in the mortality of over 150 spot-billed pelicans at
  Telineelapuram Important Bird Area (IBA) in Naupada swamp of Srikakulam district in
  Andhra Pradesh.
• The post-mortem reports have certified parasitic (nematode) infestation as the cause of
  death.” The experts have revealed that spot-billed pelicans are vulnerable to infestation as
  it is capable of hunting huge fish from the water bodies and swamps.

About Nematodes:

• Nematodes are microscopic worms many of which are parasites consisting of roundworms,
  threadworms and eelworms.
• They have successfully adapted to nearly every ecosystem from marine (salt or brackish
  water) to fresh water, to soils, and from the tropics to the harsh polar regions, as well as
  the highest to the lowest of elevations.
• Depending on the species, a nematode may be beneficial or detrimental to plant health.
• The predatory nematodes breed by soaking a specific recipe of leaves and other detritus in
  water.
• Crop rotation of agricultural plants with nematode-resistant species or varieties is one of
  the simplest ways of managing parasitic infestations of nematodes.

About Spot-billed Pelicans

Spot-billed Pelicans are one of the most threatened (listed as Near Threatened in the IUCN Red List) of the seven species of pelicans in the world. In India, they are listed in Schedule IV of the Wildlife (Protection) Act, 1972 (WPA).

THE MISCELLANEOUS

4. PADMA AWARDS 2022

THE CONTEXT: The Union Ministry of Home Affairs announced the Padma awards on the eve of the
country’s 73rd Republic Day.

THE EXPLANATION:

BHARAT RATNA

• Bharat Ratna is the highest civilian award of the country. It is awarded in recognition of exceptional service/performance of the highest order in any field of human endeavor. It is treated on a different footing from Padma Award.
• The recommendations for Bharat Ratna are made by the Prime Minister to the President of India. No formal recommendations for Bharat Ratna are necessary. The number of Bharat Ratna Awards is restricted to a maximum of three in a particular year. Government has conferred Bharat Ratna Award on 45 persons till date.

PADMA AWARDS

The Padma Awards are one of the highest civilian honours of India announced annually on the eve of Republic Day. The award seeks to recognize achievements in all fields of activities or disciplines where an element of public service is involved.
The Padma Awards are conferred on the recommendations made by the Padma Awards Committee, which is constituted by the Prime Minister every year. The nomination process is open to the public. Even self-nomination can be made.
The PADMA Awards were instituted in 1954 along with Bharat Ratna. At that time only Padma Vibhushan existed with three sub-categories – Pahela Varg, Dusra Varg and Tisra Varg. These were subsequently renamed as Padma Vibhushan, Padma Bhushan and Padma Shri vide Presidential Notification issued on January 8, 1955. During the years 1978 and 1979 and 1993 to 1997, Padma awards were not announced. The awards are given in three categories:

• Padma Vibhushan (for exceptional and distinguished service),
• Padma Bhushan (distinguished service of higher order)
• Padma Shri (distinguished service).

All persons without distinction of race, occupation, position or sex are eligible for these awards.
However, Government servants including those working with PSUs, except doctors and scientists,
are not eligible for these Awards. A Padma awardee can be given a higher award only after five
years of the conferment of the earlier award.
The award does not amount to a title and cannot be used as a suffix or prefix to the awardees’
name.

Padma Vibhushan (4)

     S.no     Name                                                              Field                            State

1.        Ms. Prabha Are                                                    Art                               Maharastra
2.        RadheyshyamKhemka (Posthumous)            Lit & Edn                    UP
3.        General Bipin Rawat (Posthumous)               Civil Service               Uttarakhand
4.        Kalyan Singh (Posthumous)                             Public Affairs            UP

5. GALLANTRY AWARDS

THE CONTEXT: On the eve of 73 rd Republic Day 2022 , the Olympics gold medal list Subedar Neeraj
Chopra was named for the Param Vishisht Seva Medal (PVSM) on the eve of Republic Day, while six
Army personnel, five of them posthumously, have been selected for the Shaurya Chakra, the third
highest peacetime gallantry award, by the President.

THE EXPLANATION:

Gallantry Awards are classified into two Categories:

a) Gallantry in the Face of Enemy:
1. Param Vir Chakra (PVC)
2. Mahavir Chakra (MVC)
3. Vir Chakra

b) Gallantry Other than in the Face of Enemy:
1. Ashok Chakra
2. Kirti Chakra
3. Shaurya Chakra

• Post-independence, first three gallantry awards namely Param Vir Chakra, Maha Vir
  Chakra and Vir Chakra were instituted by the Government of India on 26th January, 1950
  which were deemed to have effect from the 15th August, 1947.
• Thereafter, other three gallantry awards i.e. Ashoka Chakra Class-I, Ashoka Chakra Class-II
  and Ashoka Chakra Class-III were instituted by the Government of India on 4th January,
  1952, which were deemed to have effect from the 15th August, 1947. These awards were renamed as Ashoka Chakra, Kirti Chakra and Shaurya Chakra respectively in January, 1967.
• These gallantry awards are announced twice in a year – first on the occasion of the Republic Day and then on the occasion of the Independence Day.
• Order of precedence of these awards is the Param Vir Chakra, the Ashoka Chakra, the Mahavir Chakra, the Kirti Chakra, the Vir Chakra and the Shaurya Chakra.
• All the gallantry awards may be awarded posthumously.

6. INTERNATIONAL HOLOCAUST REMEMBRANCE DAY

THE CONTEXT: The United Nations marks the International Holocaust Remembrance Day on 27
January in honour of six million Jews killed in the Holocaust, and millions of other victims of
Nazism. Also, the UN urges every member state to develop educational programs to help prevent
future genocides.

THE EXPLANATION:

• The theme of this year’s Holocaust remembrance and education is “Memory, Dignity and Justice”. The theme encompasses safeguarding the historical record, remembering the victims, and challenging the distortion of history often expressed in contemporary antisemitism. It encourages action to challenge hatred, strengthen solidarity and champion compassion.

Background:

• Adolf Hitler’s Nazi regime and its collaborators led to the extermination of around six million
  Jews through a systematic, bureaucratic and state-sponsored persecution during World War
  II.
• In November 2005, the United Nations General Assembly officially proclaimed January 27 as
  International Holocaust Remembrance Day.
• The observance of this day also reaffirms a commitment to counter racism, anti-semitism,
  and other forms of intolerance that may lead to violence against a particular group based
  on race, ethnicity or religion.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY 27 TH JANUARY 2022

Q. Consider the following statements in respect of Bharat Ratna and Padma Awards:

1. Bharat Ratna and Padma Awards are titles under the Article 18(1) of the Constitution of
   India.
2. Padma Awards, which were instituted in the year 1954, were suspended only once.
3. The number of Bharat Ratna Awards is restricted to a maximum of five in a particular year.

Which of the above statements are not correct?
a) 1 and 2 Only
b) 2 and 3 Only
c) 1 and 3 Only
d) 1, 2 and 3

ANSWER FOR 25 TH JAN 2022

Answer: a)
Explanation:
Statement 1 is correct: Pradhan Mantri Rashtriya Bal Puraskar is administered by the Ministry of
Women and Child Development.
Statement 2 is incorrect: It is conferred by the President of India in the week preceding Republic
Day, 26 January, in the Durbar Hall of Rashtrapati Bhavan in New Delhi.

THE CONTEXT: As of Apr 15, 2021, 67279 cases are pending in the Supreme Court while in High Courts the number is a whopping57. 53 lakh. The restricted functioning of the courts during the Covid pandemic has added to the pendency. A NITI Aayog study in 2017, notes that India takes as much as 1,420 days and 39.6% of the claim value for dispute resolution. The above statistics reiterate the need for reforms not only in speeding up dispute resolution but also in having a strong in-country mechanism for out-of-court dispute resolution. Legally, this process is known and is practiced in the forms of arbitration; negotiation conciliation, and mediation. This write up examines the need for institutionalizing an important ADR mechanism in India: Arbitration

UNDERSTANDING ARBITRATION

• Arbitration is a form of Alternative Dispute Resolution (ADR). Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
• In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
• Unlike litigation, arbitration proceeding takes place out of the court and the arbitrator’s decision is final and the courts rarely reexamine it.
• Usually, all the disputes in which the civil rights of a citizen are infringed and the disputes falling within the jurisdiction of the civil court can be referred to arbitration. But, the disputes which are related to morality, public policy, status, and religious rights are not arbitrable in India.
• Under the Constitution of India, Article 51, India is obliged to encourage the settlement of international disputes by arbitration.

 PRINCIPAL CHARACTERISTICS OF ARBITRATION

Arbitration is consensual: An arbitrator proceeding can only take place if both the parties to the disputes have agreed to it.

Parties choose the Arbitrators: Under the Indian Arbitration Act parties are allowed to select their arbitrator and they can also select a sole arbitrator together who will act as an umpire.

Arbitration is neutral: Apart from selecting neutral persons as arbitrators, the parties can choose other important elements of proceeding, such as the law applicable, language in which the proceedings should be conducted, the venue for arbitration proceedings.

The decision of the Arbitral Tribunal is final and easy to enforce: The decision or award given by the arbitral tribunal is final and binding on the parties and persons can appeal only after the expiry of a specified time limit.

HISTORICAL BACKGROUND OF ARBITRATION IN INDIA

PERIOD: ANCIENT

PREVALENT MEASURES: The settlement of differences by tribunals chosen by the parties themselves was well known in ancient India. There were different grades of arbitrators with provisions for appeals in certain cases from the award. The ancient texts of Yajnavalka and Narada refer to three types of popular courts (Puga, Sreni, and Kula).

PERIOD: MEDIEVAL

PREVALENT MEASURES: During the Mughal Dynasty, most villagers resolved their cases in the village courts themselves and appeal to the caste courts or the arbitration of an impartial umpire (“Salis”). In Maratha Empire, It was up to the Panchayat to study the case and pass its judgment impartially or without any bias to any party.

PERIOD: BRITISH

PREVALENT MEASURES: In the British era, the Bengal Regulation of 1772, 1780, 1781 and the Cornwallis Regulation of 1787 recognized and encouraged arbitration. The Indian Arbitration Act of 1899 dealt with arbitration by agreement without the intervention of the court. However, it was in 1940, the first Arbitration Act of the country was enacted.

PERIOD: POST-INDEPENDENCE

PREVALENT MEASURES: In 1977, the Law Commission of India suggested amendments in the Act on grounds of delay, hardship, and other factors that affect smooth arbitral proceedings. Consequently, the Arbitration and Conciliation Act, 1996, was enacted. Various Committee reports like Justice B.P. Saraf Committee (2004) and the 246th report of the Law Commission (2014) highlighted the challenges associated with the arbitration legal regime. Ultimately, the Arbitration and Conciliation (Amendment) Act, 2015, 2019, and 2021 brought in crucial changes to the 1996 statute to overcome the shortcomings.

LEGAL AND INSTITUTIONAL FRAMEWORK OF ARBITRATION IN INDIA

• Section 89 of the Civil Procedure Code, 1908 provides that opportunity to the people, if it appears to court there exist elements of settlement outside the court then the court formulate the terms of the possible settlement and refer the same to Arbitration, Conciliation, Mediation or Lok Adalat.
• The Legal Services Authority Act, 1987 is the basis for Lok Adalat and free legal aid.
• The Arbitration and Conciliation Act, 1996 applies to arbitrations inside and outside India.
• The Arbitration Act was also recently amended in 2019 and 2021.
• There have been a series of judicial decisions and legislative amendments in recent years that apply partly prospectively and partly retrospectively.
• An Arbitration clause is a section of the contract that defines the rights of the parties in the case any dispute arises over the contractual obligation
• Arbitration Tribunalmeans a sole arbitrator or a panel of arbitrators.
• An arbitration award is an award granted by the arbitrator in the proceeding before it. This award can be a monetary award and it can also be a non-financial award.

SALIENT FEATURES OF The Arbitration and Conciliation (Amendment) ACT, 2019&2021

• Arbitration Council of India: The Act seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation, and other alternative dispute Redressal mechanisms.
• Appointment of arbitrators: Under the Act, the Supreme Court (for International) and High Courts (for domestic) may now designate arbitral institutions, which parties can approach for the appointment of arbitrators.
• Completion of written submissions: Currently, there is no time limit to file written submissions before an arbitral tribunal.  The act mandates that the written claim and the defense to the claim in an arbitration proceeding should be completed within six months of the appointment of the arbitrators.
• Confidentiality of proceedings: The act provides that all details of arbitration proceedings will be kept confidential except for the details of the arbitration award in certain circumstances
• The amendment in 2021 did away with the qualifications prescribed for the arbitrators in the 1996 Act and the same will be prescribed by the Arbitration Council. The Act also provided for an unconditional stay by the courts on the enforcement of arbitration awards based on ‘fraud or corruption” in the contract.

AD HOC ARBITRATION AND INSTITUTIONAL ARBITRATION

• There are two types of arbitration – institutional arbitration and ad hoc
• Institutional arbitration refers to the administration of arbitration by an institution under its rules of procedure.
• The institution provides support for the conduct of the arbitration in the form of appointment of arbitrators, case management services including oversight of the arbitral process, etc.
• Ad hoc arbitration is a form of arbitration where the parties and the arbitrators independently determine the procedure, without the involvement of an arbitral institution.
• Institutional arbitration differs from ad hoc arbitration in that several aspects of the arbitral proceedings, such as the appointment of arbitrators, the conduct of the arbitral proceedings, scrutiny of awards, etc. May be determined by the arbitral institution.

The advantages of institutional arbitration over ad hoc arbitration

• Institutional arbitration offers the advantages of providing a clear set of arbitration rules and timelines for the conduct of the arbitration.
• Support from trained staff who administers various stages of the arbitration proceedings, a panel of arbitrators to choose from to decide the dispute are also available.
• Ad hoc arbitration is vulnerable to the risk of dilatory tactics, which increases delays and costs.
• Moreover, where parties are not sophisticated and do not have sufficient knowledge regarding arbitral proceedings, institutional arbitration is highly preferable.
• In India, ad hoc arbitrations tend to be protracted and costly in some cases in the absence of monitoring.
• One of the reasons for these delays and costs is that the fees of arbitrators are charged on a sitting-by-sitting basis without any regulation.

BENEFITS OF ARBITRATION IN INDIA

AREA: ENFORCEMENT

EXPLANATION: Ease of enforcement is often an important deciding factor in favor of arbitration. India is a signatory to the New York Convention. If a party receives a binding award from a country that is a signatory to the New York Convention and the award is made in a territory that has been notified as a ‘convention country’ by India, the award would then be enforceable in India.

AREA: LENGTH OF PROCEEDINGS

EXPLANATION: Indian courts are infamous for endemic delays in resolving commercial disputes.  Arbitration can be substantially quicker as all India seated arbitrations must be completed within 12 months of the constitution of the tribunal.

AREA: NEUTRALITY AND EXPERTISE

EXPLANATION: In arbitration, parties can refer their disputes to a neutral forum.  This is particularly attractive in the context of cross-border transactions.

AREA: PROCEDURAL FLEXIBILITY

EXPLANATION: Arbitration allows parties to tailor procedures to the needs of a particular dispute. In practice, parties often choose institutional arbitration and simply adopt the standard rules and procedures of their chosen institution.

AREA: CONFIDENTIALITY

EXPLANATION: Arbitration hearings are usually held in private and a party is involved in arbitration proceedings is also confidential. By contrast, Indian court proceedings, with some exceptions, are almost always open to the public.

AREA: MAKING INDIA A GLOBAL HUB

EXPLANATION: To develop India as a global hub for international arbitration, we must open ourselves to the outside world and incorporate best practices for creating word class Institutional and legal procedures.

AREA: EASE OF DOING BUSINESS

EXPLANATION: As per the EoDB Ranking by World Bank, India’s position is 163 in the Enforcement of Contract indicator. Thus, foreign investors are increasingly doubtful about the timely delivery of justice, which affects the success of programs like ‘Make in India’.Having a streamlined arbitration regime encourages foreign investments in a country.

WHAT ARE THE PROBLEMS OF ARBITRATION IN INDIA?

LACK OF CREDIBLE ARBITRAL INSTITUTIONS: Arbitral institutions in India lack access to quality legal expertise and lack exposure to international best practices. Thus the rules and practices followed by these arbitral institutions are often outdated and inadequate.

MISCONCEPTIONS RELATING TO INSTITUTIONAL ARBITRATION: Parties consider institutional arbitration to be substantially more expensive than ad hoc arbitration. This assessment is largely misconceived because numerous arbitral institutions charge very reasonable fees.

FAILURE BY THE GOVERNMENT AND ITS AGENCIES TO USE INSTITUTIONAL ARBITRATION: The general conditions of contract used by the Government and PSUs often contain arbitration clauses, but these clauses usually do not expressly provide for institutional arbitration. For instance, if the government, were to adopt institutional arbitration as a regular practice, the volume of cases moving to arbitral institutions would provide a powerful impetus to institutional arbitration.

JUDICIAL ATTITUDES TOWARDS ARBITRATION: Delays in Indian courts and excessive judicial involvement in arbitral proceedings have resulted in India not being favored as a seat of arbitration. It has contributed to discouraging foreign parties to arbitrate in India. The high pendency of litigation before Indian courts means that arbitration-related court proceedings take a long time to be disposed of.

HIGH COSTS AND INEFFICIENCY: Arbitration proceedings are often dragged on by lawyers on either side filing misconceived applications at various stages of the proceedings. Litigants, too, at times contribute to this delay with their stubbornness in not conceding a loss or defeat.

ISSUE OF TRANSPARENCY: Arbitration hearings are generally held on camera, and decisions are usually not publicly accessible, giving rise to doubts about impartiality and fairness. The aggrieved party may well be stuck with the award and precluded forever from challenging it. In 1984, in Tarapore and Company v. Cochin Shipyard Ltd, the Supreme Court had remarked that an honest man dreads arbitration more than lawsuits. The same fear persists today.

HOW TO INSTITUTIONALISE ARBITRATION IN INDIA?

JUSTICE BN SRIKRISHNA COMMITTEE RECOMMENDATIONS: 

1. Arbitration Promotion Council of India – An autonomous body called the Arbitration Promotion Council of India (“APCI”) and having representation from various stakeholders may be set up by amendment to the ACA for grading arbitral institutions in India.  (The ACA Amendment 2019 provides for an Arbitration Council of India, which is yet to be constituted)
2. Accreditation of arbitrators – The APCI may recognize professional institutes that provide for accreditation of arbitrators. Accreditation may be made a condition for acting as an arbitrator in disputes arising out of commercial contracts entered into by the government and its agencies.
3. Creation of a specialist arbitration bar – Measures may be taken to facilitate the creation of an arbitration bar by providing for the admission of advocates on the rolls of the APCI as arbitration lawyers, encouraging the establishment of fora of young arbitration practitioners, and providing courses in arbitration law and practice in law schools and universities in India.
4. Creation of a specialist arbitration bench – Judges hearing, arbitration matters should be provided with periodic refresher courses in arbitration law and practice.
5. Role of the government and the legislature in promoting institutional arbitration – Measures to promote institutional arbitration, such as facilitating the construction of integrated infrastructure for arbitration in major commercial hubs, adopting arbitration policies providing for institutional arbitration in commercial disputes involving the government, maybe adopted.
6. Changes in ADR culture – Measures may be taken to promote the use of ADR mechanisms, including requiring the provision of mediation facilities by arbitral institutions.
7. Bilateral investment arbitrations involving the Union of India –This assumes relevance in the case of Cairn Energy where the company has accused India of not honoring the Arbitration Award in its favor and also in the context of the revised framework of BIT from India. A few recommendations for effective dispute management and resolution, and dispute prevention include: (a) appointing the Department of Economic Affairs as the Designated Representative of the Government in existing BITs; (b) creating the post of an International Law Adviser, who shall advise the Government and coordinate dispute resolution strategy for the Government in disputes arising out of its international law obligations,

NEW DELHI INTERNATIONAL ARBITRATION CENTRE (NDIAC) ACT, 2019:

1. The Act provides for the setting up of an independent and autonomous body, for institutional arbitration.
2. NDIAC will conduct arbitration, mediation, and conciliation proceedings (Yet to be constituted)
3. NDIAC will establish a Chamber of Arbitration which will maintain a permanent panel of arbitrators.
4. Further, the NDIAC may also establish an Arbitration Academy for training arbitrators and researching the area of alternative dispute resolution.
5. It will facilitate the conduct of arbitration and conciliation in a professional, timely, and cost-effective manner and assist in the conduct of ADRs.

INTERNATIONAL EXPERIENCe: SINGAPORE MODEL

• The SIAC (Singapore International Arbitration Centre) has benefited significantly from the support they enjoyed from their government.
• The SIAC was established as a part of the Singapore government’s effort to create an arbitration industry in Singapore.
• It was set up by the government with two governmental agencies, the Economic Development Board and the Trade Development Board as its shareholders, and operated for many years under their aegis.
• The government also played a role in promoting the SIAC at an international level, getting international arbitration practitioners to be associated with the institution.
• The SIAC received financial assistance and/or infrastructural support from the government.
• The Indian government, like the Singapore government, could consider assisting arbitral institutions in India by building suitable infrastructures such as integrated dispute resolution facilities in major commercial centers such as Mumbai and Delhi.

WAY FORWARD

• Effective use of Technology such as e-filing, creating a database of cases, big data analytics, Online Dispute Resolution, video conferencing, etc. needs to be scaled up and be put to extensive use in the process of arbitration
• The Law Commission of India has in its 246^thReport has noted the problems in ad hoc arbitrations and therefore recommends that India needs to promote institutional arbitration where a specialized institution with a permanent character aids and administers the arbitral process.
• Fast-tracking of disputes in case of government contracts requires an independent settlement committee, which could be approached by the stakeholders at any stage of proceedings for the resolution of disputes.
• Judicial cooperation is vital to give effect to the law of arbitration. Therefore, an effort is to be made to identify those steps which would make a good balance between judicial and arbitration, at pre, during, and post arbitral proceedings.

CONCLUSION: Apart from legal reforms, arbitration promotion also needs further support on a few other fronts like the need to decentralize dispute resolution mechanisms. It would also need an administrative mechanism to ensure that arbitration matters have been handled separately and efficiently. For this, the government needs to create an enabling framework for institutional arbitration. The proposed ACI be set up expeditiously for providing leadership in the arbitration landscape of the country. These measures are a must to “resolve in India” which will create a conducive environment for attracting investment and facilitating economic development.

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