Chapter III - Acquisition and Transfer of Undertakings of Society
Sections 7, 8, 9, 10 and 11 of the India International Arbitration Centre Act, 2019
Sections 7 to 11 regulate the statutory transfer of the relevant undertakings of the International Centre for Alternative Dispute Resolution, the legal consequences of vesting, responsibility for pre-transfer liabilities, subsequent vesting in the India International Arbitration Centre, and management of the transferred undertakings.
Section 7 - Transfer and vesting
On and from the specified date, so much of the undertakings of the Society as form part of, or are relatable to, the Society, and the right, title and interest of the Society in relation to such undertakings, shall, by virtue of the Act, stand transferred to and vest in the Central Government.
Meaning of Section 7
Section 7 is the primary transfer provision. It causes the relevant undertakings and the Society's associated right, title and interest to pass to the Central Government by operation of law from the specified date.
Section 8 - General effect of vesting
(1) The undertakings vested under Section 7 are deemed to include the assets, rights, leaseholds, powers, authorities, privileges and movable and immovable property relatable to the Society. This includes lands, buildings, works, projects, instruments, automobiles and other vehicles, cash balances, funds including reserve funds, investments, book debts and associated rights and interests, together with books of account, registers and other relevant documents.
The provision refers to properties and interests held immediately before commencement of the New Delhi International Arbitration Centre Ordinance, 2019 (Ord. 10 of 2019).
(2) Properties and assets vested in the Central Government under Section 7 are, by force of that vesting, freed and discharged from trusts, obligations, mortgages, charges, liens and other encumbrances affecting them. Attachments, injunctions, decrees or orders restricting their use, or appointing a receiver over them, are deemed to have been withdrawn.
(3) A licence or other instrument granted to the Society in relation to an undertaking vested in the Central Government before the specified date and in force immediately before that date continues according to its tenor. If the undertaking is directed under Section 10 to vest in the Centre, the Centre is deemed to be substituted in the licence or instrument for the remainder of its term.
(4) A suit, appeal or other proceeding relating to property or assets vested under Section 7 and pending on the specified date does not abate or become prejudicially affected merely because of the transfer. It may continue by or against the Central Government or, where Section 10 applies, by or against the Centre.
Meaning of Section 8
Section 8 explains the practical legal effect of the statutory vesting. It gives the transfer a broad scope, preserves operational licences and pending proceedings, and removes specified encumbrances from the transferred assets.
Section 9 - Liability prior to specified date
Every liability in relation to any undertaking in respect of a period prior to the specified date is enforceable against the Society and not against the Central Government.
Meaning of Section 9
Section 9 separates pre-transfer liabilities from the assets transferred under Section 7. Liabilities attributable to a period before the specified date remain enforceable against the Society rather than the Central Government.
Section 10 - Power of Central Government to direct vesting of undertaking in Centre
(1) Notwithstanding Sections 7 and 8, the Central Government shall, as soon as may be after the specified date, direct by notification that the undertakings and the right, title and interest of the Society in those undertakings, which had vested in the Central Government under Section 7, shall vest in the Centre. The vesting may take effect on publication of the notification or on an earlier or later date specified in it.
(2) When the right, title and interest of the Society in the undertakings vest in the Centre under sub-section (1), the Centre is deemed from that date to have become the owner of the undertakings. The rights and liabilities of the Central Government relating to those undertakings are correspondingly deemed to become the rights and liabilities of the Centre.
Meaning of Section 10
Section 10 provides the second stage of the statutory transfer. Section 7 initially vests the relevant undertakings in the Central Government, while Section 10 authorises and requires their notified vesting in the Centre.
Section 11 - Management, etc., of undertakings
(1) The general superintendence, direction, control and management of the affairs of undertakings whose rights and interests have vested in the Central Government under Section 7 shall:
(a) vest in the Centre where the Central Government has made a direction under Section 10(1); or
(b) where no such direction has been made, vest in a Custodian appointed by the Central Government under sub-section (2).
In either case, the Centre or Custodian, as applicable, may exercise the powers and perform the acts that the Society was authorised to exercise or perform in relation to its undertakings.
(2) The Central Government may appoint any person as Custodian of undertakings in relation to which no direction has been made under Section 10(1).
(3) The Custodian receives such remuneration as the Central Government may fix and holds office during the pleasure of the Central Government.
Meaning of Section 11
Section 11 ensures continuity of administration during and after the transfer process. Management is placed either with the Centre after a Section 10 direction or, pending such a direction, with a Central Government-appointed Custodian.
Sections 7 to 11 should be read together. They create a linked transfer mechanism covering vesting, transferred assets, prior liabilities, ultimate vesting in the Centre and interim or continuing management.
Official legal sources
For the current Act, amendment materials, rules, regulations and notifications, refer to the India International Arbitration Centre statutes page and the Department of Legal Affairs page on the Act.