What’s in the news?
- The Gujarat Maritime University has signed a Memorandum of Understanding (MoU) with the International Financial Services Centres Authority in GIFT City to promote the Gujarat International Maritime Arbitration Centre (GIMAC).
- This will be the first centre of its kind in the country that will manage arbitration and mediation proceedings with disputes related to the maritime and shipping sector.
Where is the GIMAC being set up?
- The GIMAC will be part of a maritime cluster that the Gujarat Maritime Board (GMB) is setting up in GIFT City at Gandhinagar. The Maritime Board has rented about 10,000 square feet at GIFT House which is part of the Special Economic Zone (SEZ) area with the clearance from the development commissioner.
- The centre is expected to be ready by the end of August.
Why is such a centre needed?
- There are over 35 arbitration centres in India. However, none of them exclusively deals with the maritime sector.
- The idea is to create a world-class arbitration centre focused on maritime and shipping disputes that can help resolve commercial and financial conflicts between entities having operations in India.
- It is required because, for instance, the ship owners belong to a different country and the person leasing the ship is from another country. Any dispute arising between them can be resolved within this centre.
- Globally, London is the preferred centre for arbitration for the maritime and shipping sector.
- An International Financial Services Centre (IFSC) is a jurisdiction that provides world class financial services to non-residents and residents, to the extent permissible under the current regulations, in a currency other than the domestic currency (Indian Rupee) of the location where the IFSC is located.
- Services provided by an IFSC:
- Fund-raising services for individuals, corporations and governments
- Asset management and global portfolio diversification undertaken by pension funds, insurance companies and mutual funds
- Wealth management
- Merger and acquisition activities among trans-national corporations, etc.
- India’s 1st IFSC was set up at the Gujarat International Finance Tec-City (GIFT City) in Gandhinagar in 2011.
- It is intended to provide Indian corporates with easier access to global financial markets, and to complement and promote the further development of financial markets in India.