Foreign practitioners allowed in India-seated arbitrations

New Delhi: India has amended the Arbitration and Conciliation Act to permit foreign practitioners in India-seated arbitrations, and enable unconditional stay of enforcement of arbitral awards that are induced by fraud or corruption. President Ram Nath Kovind promulgated an ordinance to amend Section 36 of the Arbitration and Conciliation Act retrospectively from October 23, 2015 in order to “address concerns raised by stakeholders”, a notification issued on Wednesday said.

The amendment will pave the way for courts to unconditionally grant a stay if it is satisfied that the arbitration agreement or contract that is the basis of the award “was induced or effected by fraud or corruption” until the challenge is disposed under Section 34 to the award. Legal experts are divided on the move. Some say it will cause unwarranted delays in dispute resolution while others said it is in line with Supreme Court judgments on arbitrability of fraud. “This amendment has potential of opening floodgates of seeking unconditional stay of awards, which would delay the enforcement of award,” said Sushmita Gandhi, partner at IndusLaw. Anuradha Dutt, managing partner at DMD Advocates, said, “It is a retrograde step… The whole idea of arbitration is expeditious disposal of disputes, which has been undone.”