Lawstreet Journal

Automatic Stay on Awards Induced by Fraud/Corruption Now as Parliament Passes Arbitration & Conciliation (Amendment) Bill, 2021

Lawstreet Journal 12 Mar 2021 5:28pm

Image courtesy: Lawstreet Journal Executive Automatic Stay on Awards Induced by Fraud/Corruption Now as Parliament Passes Arbitration & Conciliation (Amendment) Bill, 2021

The Arbitration & Conciliation (Amendment) Bill, 2021 was passed by the Rajya Sabha on Wednesday (March 10, 2021) by voice vote.

Lok Sabha had passed the said Bill on February 12, 2021. It is supposed to replace an ordinance which was promulgated on November 4, 2020.

It will amend the Arbitration & Conciliation Act, 1996 in order to (i) entitle automatic stay on awards in certain cases (ii) specify the norms, qualifications and experience for accreditation of Arbitrators. 

The Statement of Object annexed to the bill said: 

"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 parti es 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 to further amend Arbitration & Conciliation Act, 1996.”

Prominent Features

  1. Automatic Stay on Awards

Previously, a party could file an application under Section 34 of the said act for setting aside an arbitral award. However, there was a change after the 2015 amendment to Section 36 of the act. This amendment facilitated that an automatic stay wouldn’t be granted by merely filing an application for setting it aside on operation of the… Continue Reading...

Tagged: Rajya Sabha   lok sabha  
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