Rajya Sabha Passes Arbitration And Conciliation Bill
The Indian Parliament building stands in New Delhi, India. (Photo: Pankaj Nangia/Bloomberg)

Rajya Sabha Passes Arbitration And Conciliation Bill

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The Parliament on Wednesday approved a Bill to amend the arbitration law that would ensure all stakeholders get a chance to seek an unconditional stay on enforcement of arbitral awards where an agreement is "induced by fraud or corruption".

The Arbitration and Conciliation (Amendment) Bill, 2021, was passed by voice vote in the Rajya Sabha. The Bill was passed in the Lok Sabha on Feb. 12.

It will replace an ordinance issued on Nov. 4, 2020.

Immediately after the passage of the Bill, Deputy Chairman Harivansh adjourned the Rajya Sabha till Monday as opposition parties continued raising slogans demanding discussion on the three Central farm laws.

Earlier in the day, Rajya Sabha Chairman M Vainkaih Naidu had disallowed notices of suspension of business of the day to take up discussion on farm laws which led to the adjournment of House proceedings till 12 noon and then again till 2 p.m.

Replying to a discussion on the Bill in the House, Law Minister Ravi Shankar Prasad said it makes the provision to avoid payment of tax payers' money as an award in those cases where the agreement or contract is "induced by fraud or corruption".

He said, "Section 36 of the Act provides that the arbitration award would be set aside if it is against the public policy. The contracts or agreement induced with corruptions and frauds would be considered 'against public policy'."

"There was a provision under Sector 36 that there would not be direct stay (to the award) as somebody has to challenge that to get the stay (on award). Today we are saying that if an award is challenged and if prima facie the court finds that it is induced with fraud or corruption then the court would stay the award."

The minister further said, "I don't understand why do they get agitated by the mention of corruption. Should such (arbitration) awards be given in India which are induced with corruption and where CBI inquiry is on? Such people by collusive agreement get the award through taxpayers money."

"We only want that there should be fair arbitration in India. Our only intention is that people should not loot taxpayers' money through arbitration award."

About the meaning of prima facie, Prasad explained the court has clearly said that a prima facie case does not mean it is proved to the hilt, but which can be said to be established if a court believes evidence related in its support.

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"If we will dole out natural resources in such cases then? In their tenure, natural resources were doled out. Supreme Court said that those were to be auctioned. They did not auction," he added.

"The larger question is that India's taxpayer money would be given in these awards. India is a free country. But will some businessmen abuse the system and take away natural resources... We brought this ordinance because we wanted to safeguard taxpayers' money. This is a national compelling necessity to pass this bill."

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