Context: Recently, President of India promulgated the Arbitration and Conciliation (Amendment) Ordinance, 2020 to further amend Arbitration and Conciliation Act.

• This will apply to cases where the ‘arbitration agreement or contract is induced by fraud or corruption’.

Need

• To address the concerns raised by stakeholders after the enactment of the Arbitration and Conciliation (Amendment) Act, 2019.

What has changed?

• Until recently, an arbitration award was enforceable even if an appeal was filed against it in the court under Section 36 of the law.
• However, the court could grant a stay on the award on conditions as it deemed fit.

Now, as per the amendment, if the award is being given on the basis of a fraudulent agreement or corruption, then the court will:

• Not impose a condition to stay the award and
• Grant an unconditional stay as long as an appeal under Section 34 of the arbitration law is pending.
• The ordinance also does away with the 8th Schedule of the Act that contained the necessary qualifications for accreditation of arbitrators.
• The provision will come into effect retrospectively from October 23, 2015.

Criticism
The conditions prescribed in the law came in way of India getting the benefit of having foreign arbitrators.
The Arbitration and Conciliation (Amendment) Act, 2019

• The Arbitration and Conciliation (Amendment) Act, 2019 was introduced by the Ministry of Law and Justice.

It seeks to amend the Arbitration and Conciliation Act, 1996 that contains provisions:

• To deal with domestic and international arbitration
• Defines the law for conducting conciliation proceedings

Key features:

• Arbitration Council of India: The Act seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms.  

Composition of the ACI: The ACI will consist of a Chairperson who is either:

• A Judge of the Supreme Court; or
• A Judge of a High Court; or
• Chief Justice of a High Court; or
• An eminent person with expert knowledge in conduct of arbitration.  

Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.

Appointment of arbitrators: Under the act, the Supreme Court and High Courts may designate arbitral institutions, which parties can approach for the appointment of arbitrators.

• For international commercial arbitration, appointments will be made by the institution designated by the Supreme Court. 
• For domestic arbitration, appointments will be made by the institution designated by the concerned High Court.  
• In case there are no arbitral institutions available, the Chief Justice of the concerned High Court may maintain a panel of arbitrators to perform the functions of the arbitral institutions. 
• An application for appointment of an arbitrator is required to be disposed of within 30 days.

Relaxation of time limits: Further, arbitral awards, other than in international commercial arbitration, will need to be made within a period of 12 months from the date of completion of pleadings.

• Completion of written submissions: The Act requires that the written claim and the defence to the claim in an arbitration proceeding, should be completed within six months of the appointment of the arbitrators.
• Confidentiality of proceedings: The act provides that all details of arbitration proceedings will be kept confidential except for the details of the arbitral award in certain circumstances. 
• Disclosure of the arbitral award will only be made where it is necessary for implementing or enforcing the award.