Ordinance to ensure that stakeholders can seek stay on arbitral awards
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This will apply to circumstances the place the ‘arbitration agreement or contract is induced by fraud or corruption’
The authorities on Wednesday introduced an ordinance to amend the arbitration regulation and ensure that stakeholder events can seek an unconditional stay on enforcement of arbitral awards in circumstances the place the “arbitration agreement or contract is induced by fraud or corruption.”
The ordinance additionally does away with the eighth Schedule of the Act that contained the required {qualifications} for accreditation of arbitrators. The provision was seen as coming in the way in which of India getting the advantage of international arbitrators.
The Law Ministry ordinance stated the modification was crucial “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 an 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.”
Until lately, an arbitration award was enforceable even when an enchantment was filed towards it within the court docket below Section 36 of the regulation. The court docket, nevertheless, might grant a stay on the award on circumstances because it deemed match.
Now, as per the most recent modification, if the award is being given on the idea of a fraudulent settlement or corruption, then the court docket is not going to impose a situation to stay the award and grant an unconditional stay so long as an enchantment below Section 34 of the arbitration regulation is pending.
The ordinance has now added a proviso in Section 36 of the Arbitration Act to impact this alteration and can come into impact retrospectively from October 23, 2015.
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