The Application of Terms of “Fraud and Corruption” in a Recent Amendment of Indian Arbitration and Conciliation Act

Abstract

Indian Arbitration and Conciliation Act was enacted in 1996 to accept a modern type of arbitration process in India. After 3 times of amendment in 2015, 2019 and 2021, the Act has taken a primary and dominant regulation to govern the arbitral proceedings in India. In the 2021 amendment, it contains the terms of “fraud” and “corruption” in section 36 of the Act. When the arbitral process was reduced or effected by fraud or corruption relate to the arbitration clause in the contract or the making of the arbitral award, it automatic stay as a pending case based on the party’s challenge. Even the law minister mentioned that India wanted to become a hub of arbitration center in Asia during the 2015 amendment, the recent amendment causes to retrogress of previous efforts in India. There are pros and cons in the 2021 amendment of Arbitration law. It simply realize that certain arbitration clause or arbitral award might be effected by types of fraud or corruption. Then, the Indian judiciary could prevent being induced these kinds and protect the arbitral parties. However, the recent amendment allows the court can intervene the arbitral proceedings by an application of “fraud or corruption” in arbitration. Because the section 36 in the Act is regulating the domestic arbitral award, the foreign investors might want to arbitrate their dispute in international arbitral institution outside of India.