The Arbitration and Conciliation (Amendment) Ordinance, 2020, has been replaced by the Arbitration and Conciliation Amendment Act, 2021, after getting the Parliamentary assent. Many argue that the new act alters the scheme of the 1996 Act as it creates complexities to enforcement of arbitral awards. It curtails the intervention and discretion of courts, which the 1996 act had permitted in certain circumstances. There is the introduction of ill-defined standards that creates difficulty in enforcement of awards and more air to challenge an award.
CHANGES FROM THE 1996 ACT
The Arbitration and Conciliation (Amendment) Act, 2021, tries to set India – an arbitral-friendly country. IF the court believes by prima facie evidence that there is "fraud" or "corruption," then there can be a manual stay on the award. The eighth schedule has been omitted from the principal act, which laid down the regulations, qualifications, experiences, accreditations for arbitrators. Further, it can be seen that this new act nullifies the 2015 Amendment.
Parties can apply to the court to set aside an arbitral award under Sec.34 of the 1996 Act. The 2021 Amendment act has made a significant change by adding proviso under Sec.36 (3), which ensures that if the court prima facie believes there to be "fraud" or "corruption," then it shall stay the award automatically and unconditionally. This had been resisted by many in Lok Sabha when the bill was proposed. Again, many see this to be a hurdle for the enforcement of arbitral awards causing lag for a pro-arbitration regime. That is because it gives the losing party an upper hand to prove corruption or fraud by any means to discard the award. This again can be seen as stumbling on the objectives of ADR, which aims at speedy and timely disposal of justice.
There is ambiguity because the legislation is not clear with "Fraud" or "Corruption." This added proviso can result in an abundance of litigation cases in courts. Hence, the enforcement part of the Arbitration and Conciliation Act has been most affected by the new act of 2021.
The Arbitration and Conciliation Act, 2015 had inserted Sec.43J, which stated qualification, norms, and standards for accreditation of arbitrators. The 2021 Amendment has substituted this section and deleted the Eighth schedule of the primary act. This gives room for parties to appoint arbitrators without any qualifications. This was done to attract international arbitrators.
ANALYSIS AND CONCLUSION
We can see that there have been many amendments and bills proposed in the past six years to make India more arbitration-friendly in the field of ADR. The changes and modifications are applauded and also criticized by many. Some see this as a change for more international involvement and support, but some see it as a mere interest to tackle the objectives of ADR.
These continuous changes and amendments also show how Indian laws have failed to stand on their own and have been vague and arbitrary with their past judgments and laws. The grounds for what constitutes "fraud" and "corruption" are unclear, making it ambiguous how the court will consider prima facie evidence.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.