THE INSTITUTECentral

Section 32 of The National Institutes of Design Act, 2014

(1)Any dispute arising out of a contract 1[between an Institute] and any of its employees shall, at the request of the employee concerned or at the instance of the Institute, be referred to an Arbitral Tribunal consisting of one member appointed by the Institute, one member nominated by the employee and an umpire appointed by the Visitor.
(2)The decision of the Arbitral Tribunal shall be final and shall not be questioned in any court.
(3)No suit or proceeding shall lie in any court in respect of any matter which is required by subsection (1) to be referred to the Arbitral Tribunal.
(4)The Arbitral Tribunal shall have power to regulate its own procedure.
(5)Nothing in any law for the time being in force relating to arbitration shall apply to arbitration under this section.

Summary

Any legal disagreement regarding a contract between the Institute and an employee must be settled by an Arbitral Tribunal.
Either the employee or the Institute can initiate the request to move a dispute to this Tribunal.
The Tribunal consists of three people: one chosen by the Institute, one by the employee, and a third person (the umpire) chosen by the Visitor.
The decision reached by this Tribunal is final and cannot be challenged in any court of law.
No one is allowed to file a regular lawsuit in court for matters that are required to go to this Tribunal.
The Tribunal has the authority to decide its own rules for how to conduct the hearings.

Practical examples

1Rajesh, a senior professor at NID Ahmedabad, has a dispute over a 2,00,000 rupee bonus he believes was promised in his 2023 employment contract. Instead of going to a civil court, he requests an Arbitral Tribunal. He chooses a retired principal as his member, the Institute chooses a lawyer, and the President of India (the Visitor) appoints a design expert as the umpire to settle the matter.

2An Institute decides to terminate a staff member, Sunita, on July 10, 2024, alleging she breached her contract. Sunita claims the termination is illegal. Because this involves her employment contract, she cannot sue in the local district court. She must follow the Section 32 process to have the Tribunal decide the outcome.

FAQ

1. Who pays for the Tribunal?

The Act does not specify payment details, but it does state that the Tribunal has the power to regulate its own procedure.

2. Does the general Arbitration and Conciliation Act apply here?

No, sub-section (5) states that no other law relating to arbitration applies to these specific proceedings.

Test yourself

Q1.Under Section 32 of The National Institutes of Design Act, 2014, who appoints the umpire for the Arbitral Tribunal?

Q2.According to Section 32 of The National Institutes of Design Act, 2014, what happens if an employee tries to sue the Institute in court over a contract dispute?

Q3.How many total members sit on the Arbitral Tribunal described in Section 32 of The National Institutes of Design Act, 2014?

Q4.Under Section 32 of The National Institutes of Design Act, 2014, which rules of procedure must the Arbitral Tribunal follow?

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