The Delhi Arbitration Centre (DAC) stands as a beacon of efficient and cost-effective dispute resolution for Non-Banking Financial Companies (NBFCs). Recognizing the unique challenges faced by these entities, DAC has tailored its services to provide swift and affordable arbitration solutions under the umbrella of DAC’s subsidised fee structure designed specifically for NBFC disputes.
NBFCs, as crucial players in the financial sector, often encounter disputes that demand timely resolution. Traditional legal avenues can be costly, time-consuming, and cumbersome, posing significant challenges for these companies. DAC steps in as a game-changer, offering an alternative that aligns with the specific needs of NBFCs.
One of the key advantages of DAC’s services is its subsidised fee structure applicable to NBFC disputes. This fee structure is meticulously designed to mitigate the financial burden on NBFCs, ensuring that cost-effective dispute resolution is accessible to all. This subsidy reflects DAC’s commitment to supporting the financial industry and fostering an environment where disputes can be resolved swiftly without straining the resources of NBFCs.
DAC’s arbitration process is renowned for its efficiency and effectiveness. By choosing arbitration under DAC’s jurisdiction, NBFCs can benefit from a streamlined procedure that prioritizes timely resolution. This not only saves valuable time but also allows these companies to redirect their resources towards their core operations rather than protracted legal battles.
Furthermore, DAC’s experienced arbitrators, well-versed in financial matters, ensure that disputes are adjudicated with the necessary expertise. This expertise helps in delivering fair and informed decisions that can have a significant impact on the financial stability and reputation of NBFCs.
When Non-Banking Financial Companies (NBFCs) incorporate the Delhi Arbitration Centre (DAC) arbitration clause into their finance agreements, they equip themselves with a powerful tool for the swift resolution of disputes that may arise, particularly in cases of non-payment of installments by customers. This strategic move offers a multitude of benefits to NBFCs, ultimately leading to efficient dispute redressal.
The primary advantage of integrating DAC’s arbitration clause is the expeditious resolution it offers. In the event of a dispute, rather than navigating the complexities of traditional legal proceedings, NBFCs can promptly refer the matter to DAC. Upon receiving the dispute, DAC swiftly appoints an arbitrator from its pool of experienced professionals. This process eliminates delays and ensures that disputes are addressed in a timely manner, which is crucial for financial institutions dealing with matters of repayment and finance.
One significant challenge NBFCs face when unilaterally appointing an arbitrator is the potential issue of enforceability of the award. As highlighted in the Supreme Court judgment in Perkins Eastman Architects DPC & Anr. v. HSCC (India) Limited, unilateral arbitrator appointments can be deemed invalid from the outset, leading to difficulties in executing awards. However, by incorporating an institutional arbitration clause like DAC’s, NBFCs bypass this concern. DAC’s institutional approach ensures that arbitrator appointments are not unilateral but made through a neutral institution, enhancing the validity and enforceability of awards.
Moreover, DAC’s arbitration process upholds principles of independence and impartiality, aligning with the Fifth Schedule of the Arbitration Act. The Supreme Court’s ‘poisoned chalice’ test holds that an arbitrator would not be disqualified under Item 22 and 24 of the Fifth Schedule if they clearly disclose their independence and impartiality while adjudicating previous disputes. DAC, as an institution, adheres to these standards, further reinforcing the legality and validity of its arbitration awards.