In a recently promulgated act by the Parliament, the Arbitration and Conciliation Act of 2021 aims at further strengthening the loopholes left behind in the Arbitration and Conciliation Act of 2019 as well as the parent act of 1996.

The Arbitration and Conciliation Act, 1996 was a paradigm shift based on the UN Model Law and was equated with the law adopted by the United Nations Commission on International Trade Law (UNCITRAL). This Act aimed at expeditious resolution of disputes among the individuals and corporate giants by doing away a task of visiting the court and engaging in the court proceedings. The aforementioned Act of 1996 came into force on 25th January 1996. The said Act of 1996 further contains provisions to handle domestic and international arbitration and defines the law for conducting the conciliation proceedings. Over the span of 25 years, the Arbitration and Conciliation Act has witnessed the changing dynamics of the corporate culture

The Amendment introduced via the Act of 2021 contains provisions to deal with domestic and international arbitration and defines the law for conducting conciliation proceedings.  The Act intends to replace the Arbitration and Conciliation (Amendment) ordinance issued on 04th November 2020.


Automatic stay on awards:

The provisions laid down under the Act of 1996 allowed a party to file an application to set aside an arbitral award (i.e., any order given in an arbitration proceeding).  This meant that as a matter of practice an automatic stay was granted on an arbitral award the moment an application for setting aside an arbitral award was made before a court.

Gradually the said position evolved by the enactment of the Arbitration and Conciliation (Amendment) Act, 2015, whereby a mere application to set aside the arbitral award would not result in the granting a stay over the arbitral award

In the recent Amendment introduced through the Act of 2021, a stay on the arbitral award can be provided (even during the pendency of the setting aside of the application) provided that the court is convinced and is of the opinion that:

  • the relevant arbitration agreement or contract, or
  • the making of the award was fraudulently induced, or effected by means of corruption.

This change shall be effective from October 23, 2015.

Qualifications of arbitrators:

  Prior to the Amendment Act of 2021, the Act specified certain qualifications, experience, and accreditation norms for arbitrators in a separate schedule.  The requirements under the schedule include that the arbitrator must be:

  • an advocate under the Advocates Act, 1961 with 10 years of experience, or
  • an officer of the Indian Legal Service, among others.
  • Further, the general norms applicable to arbitrators include that they must be learned and conversant with the Constitution of India.
  • By the promulgation of the Amended Act of 2021; the Act completely does away with the Schedule for arbitrators and provides for the qualifications, experience, and norms. This is for accreditation of arbitrations which shall be specified under the regulations.


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