The Telangana High Court on Friday set aside the allotment of land to the International Arbitration and Mediation Centre (IAMC) in Hyderabad by the state government.
The court struck down the Government Order, which allotted 3.5 acres of prime land at Raidurgam in the IT corridor to IAMC.
A bench comprising Justice K Lakshman and Justice K Sujana pronounced the orders on two Public Interest Litigations (PILs) challenging the land allotment.
Advocate K. Raghunath Rao, one of the petitioners, had argued that the land allotment was made in violation of the rules. He had submitted to the court that the land valued at Rs 350 crore in the IT corridor was allotted to IAMC in violation of the Supreme Court judgment.
The petitioners had questioned the rationale behind allotting the land to a private trust and providing financial support by the government.
The state government had defended the land allotment on the ground that IAMC will serve as a platform to resolve the dispute between international companies.
During the arguments, Advocate General A Sudarshan Reddy had emphasised the necessity of IAMC as an institution to promote business and institutional arbitration. He highlighted that the objectives of the amended Arbitration Act support the establishment of arbitral institutions and referenced the Sri Krishna Committee’s recommendations for governmental backing to such institutions.
Sudarshan Reddy had also submitted to the court that the IAMC’s governance structure, with the Chief Justice of the Telangana High Court and the state law minister serving as trustees, instils confidence among parties opting for institutional arbitration. He asserted that extending state support, including land and finances, is crucial for establishing an institution of international repute and fostering trust across various sectors of society.
During the arguments, the court wanted to know if there were no vacant buildings in Hyderabad to set up the IAMC office, instead of allocating prime land and releasing funds for its construction. It pointed out that the office of the additional solicitor general of India was located in a 50-foot space in the Telangana High Court, while several government offices are functioning from leased or private lands.
After hearing the arguments from both sides, the High Court had reserved its orders. The bench pronounced the same on Friday.
The court also set aside the GO related to the construction of the building for IAMC.
On March 12, 2022, then Chief Justice of India, N.V. Ramana had laid the foundation stone for the permanent building of India’s first International Arbitration and Mediation Centre.
The CJI had thanked the government of Telangana and then Chief Minister K. Chandrasekhar Rao for allocating valuable land in the heart of the city and Rs 50 crore for the construction of the building.
Justice Ramana termed IAMC as a big step in promoting arbitration and mediation in this part of the world.
The CJI hoped that IAMC Hyderabad would emerge as an arbitration and mediation centre on par with such centres in Dubai, London and Singapore.
The centre was jointly inaugurated by the CJI and the then Chief Minister in December 2021. The centre started functioning from a 25,000 square feet temporary accommodation at VK Towers in Gachibowli.
Those who empanel the centre include internationally acclaimed arbitrators and mediators from countries such as Singapore and the UK.
