The Lok Sabha has passed the #Arbitration and Conciliation (Amendment) Bill, 2021 (the Bill). The Bill which was introduced in the #LokSabha on February 4, 2021 by Law Minister Ravi Shankar Prasad seeks to #amend the Arbitration and Conciliation Act, 1996 (the Act).
The Statement of Objects annexed to the Bill reads as:
“In order to address the issue of corrupt practices in securing contracts or arbitral awards, a need was felt to ensure that all the stakeholder parties get an opportunity to seek unconditional stay of enforcement of arbitral awards, where the underlying arbitration agreement or contract or making of the arbitral award is induced by fraud or corruption.
Also to promote India as a hub of international commercial arbitration by attracting eminent arbitrators to the country, it was also felt necessary to omit the Eighth Schedule of the Act. In the light of above circumstances, it has become necessary further to amend the Arbitration and Conciliation Act, 1996.”
The Salient features of the Bill are as follows:
1- Stay on Awards in case of Fraud or Corruption
Under the Arbitration and Conciliation Act, 1996, Section 34 contemplates that a party may file an Application before the Court for setting aside of an arbitral award. The Bill states that even during the pendency of the setting aside application, a stay may be granted on the arbitral award by the Court, if it is prima facie satisfied that the relevant Arbitration Agreement or making of the award was induced or effected by fraud or corruption. Such a stay may be granted unconditionally pending disposal of the challenge under Section 34 to the award.
2- Qualifications of Arbitrators
Schedule VIII to the Act stipulates certain qualifications, experience, and accreditation norms in relation to Arbitrators. These requirements are that an Arbitrator must be:
- an advocate under the Advocates Act, 1961 with 10 years of experience, or
- an officer of the Indian Legal Service, among others.
The Bill seeks to omit Schedule VIII that states the qualifications, experience and norms for accreditation of Arbitrators shall be specified by Regulations.
3- The Bill repeals The Arbitration and Conciliation (Amendment) Ordinance, 2020.
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The Indian Lawyer & Allied Services