Anjuum Khanna - Lok Sabha Passes Arbitration & Conciliation (Amendment) Bill, 2021

1. Anjuum Khanna - LokSabha Passes Arbitration & Conciliation (Amendment) Bill, 2021

2. Anjuum Khanna- The LokSabha on Friday passed the Arbitration and Conciliation (Amendment) Bill, 2021. This bill was introduced by Minister Ravi Shankar Prasad. Some of the key highlights of the Arbitration and Conciliation (Amendment) Act, 2021 ('Amendment Act') are set out below: the arbitration agreement or contract which is the basis of the award;  (b) promote the india as hub

3. To resolve the issue of corrupt practices in securing contracts or arbitral awards, a need was felt to ensure that all stakeholder parties have the opportunity to live unconditionally for the enforcement of arbitral awards, where the underlying arbitration agreement Or the contract or making arbitrator's award is induced by fraud or corruption. It was also deemed necessary to drop the Eighth Schedule of the Act to promote India as a center for international commercial arbitration by attracting eminent arbitrators in the country. In the light of the above circumstances, it has become necessary to amend the Arbitration and Conciliation Act, 1996. https://www.youtube.com/watch?v=EROqQrEoOZY

4. Features explained by Anjuum Khanna

5. Automatic Stay on Awards In the current regime, a party can file an application before the court under section 34 of the 1996 Act to set aside an arbitral award. However, following the amendment of the Act to 2015 (section 36), an automatic stay on the operation of the award will not be permitted, only by filing an application to set it aside. The clarifies that a stay on the arbitral award may be granted by the Court, even during the setting of a separate application, if it is prima facie satisfied that the creation of the respective arbitration agreement or contract / award was motivated by fraud or corruption.

6. Qualification of Arbitration Schedule VIII of the principal Act specifies certain qualifications, experience and recognition criteria for arbitrators. i) The arbitrator shall be a person of general reputation of fairness, integrity and capable to apply objectivity in arriving at settlement of disputes;  ii) The arbitrator must be impartial and neutral and refrain from entering into any financial business or other relationship that is likely to affect fairness or may partially create the appearance of partiality or prejudice between the parties; iii) the arbitrator should not involve in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him; 

7. iv) the arbitrator should not have been convicted of an offence involving moral turpitude or economic offence;  v) the arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labour laws, law of torts, making and enforcing the arbitral awards;  vi) the arbitrator should possess robust understanding of the domestic and international legal system on arbitration and international best practices in regard thereto;  vii) the arbitrator should be able to understand key elements of contractual obligations in civil and commercial disputes and be able to apply legal principles to a situation under dispute and also to apply judicial decisions on a given matter relating to arbitration; and  viii) the arbitrator should be capable of suggesting, recommending or writing a reasoned and enforceable arbitral award in any dispute which comes before him for adjudication.

8. Parliamentary Debate Cut across party lines, most members commended the government for the proposal to drop the 8th schedule as it would attract reputed international arbitrators in the country and pursue the goal of making India the center of international commercial arbitration.

9. Other issues raised in relation to the proposed amendment to section 36 of the Act explained by Anjuum Khanna The legislation does not define fraud / corruption; Retrospective application of the Amendment Act (since 2015) in relation to automatic living can lead to a flood of litigation; The amendment will affect the enforcement of contracts and ultimately the ease of doing business in India; Continuous piece-by-piece amendments to the Arbitration Act in 2015, 2019 and 2020 show that the government lacks legislative knowledge.

10. About Anjuum khannaLawyer Anjuum Khanna specialized in Civil, Criminal, Consumer, Cheque Bounce , Family law, Property law, Labour, Banking & Insurance. Anjuum Khanna  Services is an international business services provider based in Bangalore. The majority of Anjuum Khanna clients are Indian subsidiaries of foreign multinationals, predominantly in the specialized sector.