Thursday, 7 July 2022

Arbitration amendment act, 2021

 Arbitration Amendment Act, 2021 

The lawmakers' desire in the twenty-first century to make India an arbitration-friendly regime is evident in the flurry of amendments and ordinances promulgated in the last several years, as noted at the outset. These quick revisions show a good attitude on the part of lawmakers, who have been listening to field experts with an open mind.

However, the Government's recent piecemeal revisions to the Arbitration Act show that it lacks the legislative acumen to uphold its own rules. Inclusion of section 43J in the 2019 Amendment Act and major change to it two years later in the 2021 Amendment Act is an example. Similarly, the current 2021 Amendment to Section 36 involving automatic stay and fundamentally modifying it.

Both changes to the 2021 Amendment Act employ wide and confusing language. The section 36 amendment employs phrases like fraud and corruption without providing a comprehensive list or explanation of what constitutes fraud and corrupt practises. As a result, parties that seek to postpone the enforcement of an award can take advantage of this clause, forcing matters back into the traditional litigation system.

It's also unclear how high the courts would set the bar for prima facie evidence in fraud and corruption cases. Furthermore, it is unclear whether contracts involving fraud or corruption are a matter of fact that should be disputed by the parties in the arbitral processes.

As previously noted, the term "regulated" is ambiguous in an amendment to section 43J. It is only to be hoped that those concerned in deciding the rule do not succumb to the limits of the Eighth Schedule and adopt a more comprehensive approach to eligibility.

Section 43J's change has the ability to attract foreign arbitrators, which is a tiny step toward India's Pro Arbitration programme. The modification on automatic stays of awards, on the other hand, is a two-edged blade that has the ability to both prolong issues and create barriers to enforcing arbitral judgements.t and should be contested by the parties in the arbitral procedures.

To address this, legislators should use precise drafting language and encourage industry experts to participate in consultation sessions. Rather than making incremental changes to the same concerns, policymakers should consider the larger picture of the major roadblocks to India's becoming an arbitration hub.

This involves correcting some ambiguities exploited by losing parties in award challenges, which has resulted in a lack of award finality. Allowing an arbitral tribunal to employ various ADR procedures throughout the arbitral processes to foster conflict settlement may be more successful, although it is rarely used in India.


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