President on November 4, 2020 gave his assent to the Arbitration and Conciliation (Amendment) Ordinance, 2020 to further amend Arbitration and Conciliation Act 1996.
Amendment to Section 36 of the Act
Under the ordinance, Section 36 of the Act, which deals with the enforcement of arbitral award, has been amended to provide for an unconditional stay of an arbitral award if the Court is satisfied that a prima facie case is made out that the arbitration agreement or the making of the award was induced by fraud or corruption, pending disposal made to the award under Section 34.
Prior to the Ordinance, an arbitration award was filed against it in the court under section 36 of the Act. But the court could grant a stay on the award on conditions as it deems fit. The Ordinance now provide the parties with a. ground to seek an unconditional stay of an award (without any deposit).
In Section 36 of the Arbitration and Conciliation Act, 1996, sub-section (3), after the proviso, a clause has been inserted which states that “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.”
It is clarified that this amendment will apply to all pending proceedings whether commenced prior to or after the commencement of the 2015 Amendment Act.
Deletion of Eighth Schedule pertaining to qualifications and experience of arbitrators
The Ordinance has also omitted the Eighth Schedule from the Act which was introduced by the Arbitration and Conciliation (Amendment) Act, 2019. This schedule was related to qualifications and experience that a person must have to be eligible to be appointed as an arbitrator). The Ordinance amends the Act to state that the qualification, etc. of arbitrators will be as specified by regulations.