Page 19 - Banking Finance March 2021

LEGAL UPDATE

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Foreign Arbitrators regulations framed by an arbitration common man as both domestic and
council. international economic transactions
allowed in arbitration law
Till recently, an arbitration award was within the country have increased
Lok Sabha passed a Bill to amend the enforceable even if an appeal was filed multiple folds.
arbitration law to allowForeign
against it in the court under Section 36 The top court said people are hesitant
arbitrators in India, This has been done of the law. But the court could grant a to keep their liquid assets at home as
to ensure that all stakeholders get an stay on the award on conditions as it "we are steadily moving towards a
opportunity to seek unconditional stay
deemed fit. cashless economy."
on enforcement of arbitral awards
where the agreement or contract is As per the proposed amendment, if the Thus, as is evident from the rising
award is being given on the basis of an
"induced by fraud or corruption". demand for such services, lockers have
agreement based on fraud or become an essential service provided
Law minister Ravi Shankar Prasad said corruption, then the court will not by every banking institution. Such
the Bill seeks to check "fly-by-night impose a condition to stay the award services may be availed of by citizens
operators" who take advantage of the and grant an unconditional stay during as well as by foreign nationals, the
law to get favourable award by fraud. the pendency of the appeal if it has bench said.
The Bill intends to replace an been challenged under Section 34.
ordinance issued on November 4, Moreover, due to rapid gains in
2020. Responding to a debate on the Supreme Court gives RBI technology, "we are now transitioning
Bill, the minister said, "India welcomes from dual keyoperated lockers to
arbitrators from any nationality." six months to lay down electronically operated lockers," the
The Bill was passed by a voice vote and norms for locker facility top court said.

a statutory resolution opposing the The Supreme Court directed the In the electronically operated lockers,
ordinance was rejected by the House. Reserve Bank of India (RBI) to lay down though the customer may have partial
regulations within six access to the locker through passwords
Among other things, the Bill, which or ATM pin, etc., they are unlikely to
amends the Arbitration and monthsmandating the steps to be possess the technological knowhow to
Conciliation Act, 1996, seeks to do taken by banks with respect to locker
facility management. control the operation of such lockers,
away with the 8th Schedule of the Act the bench said.
which contained the necessary A bench comprising Justices M M
qualifications for accreditation of Shantanagoudar and Vineet Saran said On the other hand, there is the
arbitrators. The qualifications for with the advent of globalization, possibility that miscreants may
accreditation of arbitrators are banking institutions have acquired a manipulate the technologies used in
proposed to be prescribed as per very significant role in the life of the these systems to gain access to the

BANKING FINANCE | MARCH | 2021 | 19