President Promulgates Arbitration and Conciliation Ordinance, 2020: Unconditional Stay on Awards Prima Facie Induced by Fraud or Corruption
The ordinance amends the arbitration act, 1996 and introduces an additional ground for a stay of an arbitral award based on prima facie view. This could potentially delay the enforcement of the award and lead to protracted litigation. Through the Ordinance, the Eighth Schedule to the Arbitration Act, which deals with qualifications and experience of arbitrators, has been omitted.
Quote from Vishrov Mukerjee, Partner at J Sagar Associates
“The Ordinance introduces specific grounds for unconditional stay premised on a prima facie view. Fraud and corruption are difficult to prove, especially prima facie. While the former is typically matter for the arbitrators to decide, allegations of corruption in making the award would require an inquiry and introduction of new evidence at the appellate stage. This could undo to a certain extent the enforcement-centric approach introduced by the 2015 Amendment. The existing provisions had sufficient latitude to provide interim relief in cases of fraud and corruption and the introduction of exceptions could lead to protracted litigation. The Ordinance which applies retrospectively could further delay enforcement of awards, a situation which has repeatedly been deprecated by the Supreme Court”.