The Delhi International Arbitration Centre (DIAC) recently introduced a new set of rules in their Practice Direction 01/2024. This update is important for anyone involved in arbitration under the DIAC. Here’s a simple explanation of what this new DIAC Practice Direction 2024 means.
What is Interim Relief?
Interim relief is when a party involved in arbitration asks for urgent, temporary assistance from the court or tribunal before the final decision is made. For example, they might ask to freeze assets or stop a particular action until the arbitration process is complete.
What’s New in DIAC Practice Direction 2024?
The new DIAC rules affect how parties can apply for interim relief and how arbitrator fees are handled:
- Deposit Requirement:
- When a party applies for interim relief to an arbitrator or their Section 9 application (under the Arbitration and Conciliation Act, 1996) is referred to an arbitrator by the court, they now need to declare their tentative claim amount.
- Along with the claim, they must deposit 20% of the arbitrator’s fee and administrative charges to the DIAC. This deposit is required on or before the first hearing.
- Adjustments:
- This deposit is provisional. It can be adjusted later based on the actual claim or counter-claim filed by the party.
- Failure to Pay the Deposit:
- If the deposit is not made, the Arbitral Tribunal can take certain measures, as mentioned in Rule 33.5 of the DIAC (Arbitration Proceedings) Rules, 2023.
Why is This Important?
These updates are designed to make the arbitration process smoother and more transparent. By ensuring that a deposit is made upfront, the arbitrator’s fee and administrative costs are covered early in the process, avoiding delays later on.
The DIAC Practice Direction 2024 comes into effect immediately, so all parties involved in DIAC arbitration should be aware of these changes.
