Unconditional Stay On Arbitral Awards

Unconditional stay on enforcement of arbitral awards has yet again become a reality in India.

1. Background

Indian arbitration law, contained in the Arbitration and Conciliation Act, 1996 (the "Act"), provided for an automatic stay on enforcement of the arbitral award once a challenge against the award was entertained by the Court under Section 34 of the Act.

The automatic stay on enforcement was heavily criticized, as it defeated the whole objective of expeditious adjudication of disputes by arbitration. The Indian Courts often took years to arrive at a final decision in the proceedings under Section 34 of the Act, challenging the award, which final decision was again subject to an appeal under Section 37 of the Act.