Current Affairs

Arbitration and Conciliation (Amendment) Ordinance 2020

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 4th November, 2020/Kartika 13, 1942 (Saka)

THE ARBITRATION AND CONCILIATION (AMENDMENT) ORDINANCE, 2020

NO. 14 OF 2020

Promulgated by the President in the Seventy-first Year of the Republic of India.

An Ordinance further to amend the Arbitration and Conciliation Act, 1996.

WHEREAS to address the concerns raised by stakeholders after the enactment of the Arbitration and Conciliation (Amendment) Act, 2019 and 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 are induced by fraud or corruption, it has become necessary to make further amendments to the Arbitration and Conciliation Act, 1996;

WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance:–

Short title and commencement.

1- (1) This Ordinance may be called the Arbitration and Conciliation (Amendment) Ordinance, 2020.

(2) Save as otherwise provided in this Ordinance, it shall come into force at once.

Amendment of section 36.

2- In section 36 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the principal Act), in sub-section (3), after the proviso, the following shall be inserted and shall be deemed to have been inserted with effect from 23rd day of October, 2015, namely:—

“Provided further that where the Court is satisfied that a prima facie case is made out,-—

(a) that the arbitration agreement or contract which is the basis of the award; or

(b) the making of the award,

was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.”.

Explanation— For the removal of doubts, it is hereby clarified that the above 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

Substitution of new section for section 43J.

3- For section 43J of the principal Act, the following section shall be substituted, namely:-—

“43J. The qualifications, experience and norms for accreditation of arbitrators shall be such as may be specified by the regulations.”.

Omission of Eighth Schedule.

4- The Eighth Schedule to the principal Act shall be omitted.

 

RAM NATH KOVIND,

President

DR. G. NARAYANA RAJU,

Secretary to the Govt. of India.


Note: Reconstructed section 36 of Arbitration and Conciliation Act, 1996

36- Enforcement – (1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court.

(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.

(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:

Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908.

Provided further that where the Court is satisfied that a prima facie case is made out,-—

(a) that the arbitration agreement or contract which is the basis of the award; or

(b) the making of the award,

was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.