No arbitration centre in Raidurgam: HC cancels Rs 350 crore-worth land allotment by State

Hyderabad: In a major setback to the International Arbitration and Mediation Centre (IAMC) in Hyderabad, the Telangana High Court on Friday cancelled the State government’s decision to allot prime land for its construction.

Court strikes down GO

A division bench comprising Justice K Lakshman and Justice K Sujana struck down the Government Order (GO) that had allotted 3.5 acres in Raidurgam, in the city’s IT corridor, to IAMC. The ruling came in response to two Public Interest Litigations (PILs) challenging the legality of the allotment.

Land worth nearly Rs 350 crore allotted without due process

One of the petitioners, advocate K Raghunath Rao, argued that the land allotment violated existing rules and Supreme Court judgments. He submitted that land valued at nearly Rs 350 crore was granted to IAMC, a private trust, without following due process.

The petitioners also questioned the rationale of providing government land and financial assistance to a private institution.

Government defends move

The Telangana government defended its decision, stating that IAMC would help resolve disputes between international companies, thereby enhancing Hyderabad’s position as an arbitration hub.

Advocate General A Sudarshan Reddy said the amended Arbitration Act encourages the establishment of institutional arbitration centres and cited the Sri Krishna Committee recommendations supporting government backing for such initiatives.

He also highlighted that IAMC’s governance structure, which includes the Chief Justice of Telangana High Court and the State law minister as trustees, would instil confidence among businesses opting for arbitration.

Aren’t vacant govt buildings available, asks court

During hearings, the bench questioned why the government chose to allot prime land and release funds when vacant government buildings were available.

It pointed out that the additional solicitor general’s office operates from a mere 50-foot space within the High Court, while many departments function from leased or private premises.

After reserving its judgment earlier, the court delivered its order on Friday, setting aside the GO related to both land allotment and building construction for IAMC.

IAMC background

India’s first International Arbitration and Mediation Centre was inaugurated in December 2021 by then CJI NV Ramana and then chief minister K Chandrasekhar Rao.

The CJI had also laid the foundation stone for its permanent building in March 2022, thanking the government for allocating land and Rs 50 crore for construction.

Justice Ramana described IAMC as a significant step to promote arbitration and mediation in India and hoped it would evolve into an institution comparable to centres in London, Dubai and Singapore.

Currently, IAMC operates from a 25,000 sq ft temporary facility at VK Towers in Gachibowli, with a panel comprising renowned international arbitrators and mediators.