The President of India has on 4 November 2020 promulgated Arbitration and Conciliation (Amendment) Ordinance, 2020 to amend the Arbitration and Conciliation Act, 1996 (‘Act’). The Ordinance while amends Sections 36 (Enforcement) and 43J (Norms for accreditation) of the 1996 Act, it also omits the Eighth Schedule to the said Act. The amendments are discussed below.
Unconditional stay of enforcement of arbitral awards
The parties in the dispute will now get an opportunity to seek an unconditional stay of enforcement of arbitral awards where the arbitration agreement or contract or the making of the award is induced or effected by fraud or corruption.
As per the second proviso inserted with effect from 23 October 2015 by the Ordinance, the Court, if satisfied that a prima facie case has been made out, shall stay the award unconditionally pending disposal of the challenge under Section 34 to the award. It may be noted that a prima facie case, that the arbitration agreement or contract which is the basis of the award or the making of the award, was induced or effected by fraud or corruption, must be made out for this purpose.
Further, since the proviso has been inserted with retrospective effect, an Explanation has also been inserted to clarify that the said proviso shall apply to all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings were commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015. It may be noted that Section 36 of the Act was substituted in 2015 to provide for conditional stay of the arbitral awards by the court.
Accreditation of arbitrators – Norms to be specified by regulations
Section 43J of the Act has been substituted to state that the qualifications, experience and norms for accreditation of arbitrators shall be such as may be specified by the regulations. Consequentially, the Eighth Schedule, relating to qualifications and experience of Arbitrator, has been omitted.
It may be noted that Section 43J is covered under Part-IA of the Act which relates to Arbitration Council of India. The said Part was introduced by the Arbitration and Conciliation (Amendment) Act, 2019 but has still not come into force.