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2016 (8) TMI 1255 - HC - Indian Laws


Issues Involved:
1. Corrections to the minutes of the order.
2. Applicability of the amended Section 36 of the Arbitration and Conciliation Act, 1996 to pending Section 34 applications.
3. Interpretation and effect of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015.
4. Determination of vested rights under the original Section 36.
5. Prospective vs. retrospective effect of the amended Section 36.

Issue-wise Detailed Analysis:

1. Corrections to the minutes of the order:
The court addressed corrections pointed out by the respondents regarding the appearances and other details in the order dated 14th January 2016. The corrections included replacing "Chamber Summons (L) No. 66 of 2016" with "Chamber Summons No. 66 of 2016," correcting names and titles of the appearing advocates, and changing the instructing attorney's name from "Ms. R. Barot" to "Mr. R. Barot." The court directed these corrections to be carried out and the order to be read accordingly.

2. Applicability of the amended Section 36 of the Arbitration and Conciliation Act, 1996 to pending Section 34 applications:
The court considered whether the amended Section 36 applies to Section 34 applications filed before the amendment came into force on 23rd October 2015. The applicants (BCCI) argued that their applications under Section 34 should be governed by the pre-amendment Section 36, which provided automatic stay of the award's enforcement upon filing a Section 34 application. The respondents contended that the amended Section 36, which requires a separate application for stay and does not automatically stay the award, should apply.

3. Interpretation and effect of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015:
Section 26 states that the amendments do not apply to arbitral proceedings commenced before the commencement of the Amendment Act unless the parties agree otherwise. The court interpreted "arbitral proceedings" to mean proceedings before the arbitral tribunal, which terminate with the final award. Post-award proceedings, including enforcement and challenges under Section 34, were not included in this term. The court held that Section 26 is exhaustive and implies that the amended provisions apply to post-award proceedings, including those pending as of 23rd October 2015.

4. Determination of vested rights under the original Section 36:
The court examined whether BCCI had any vested or accrued right under the original Section 36 against the enforcement of arbitral awards. It was determined that the original Section 36 only imposed a temporary impediment on the enforceability of the award, which did not constitute a vested or accrued right. The court noted that the original Section 36 provided an interim relief against execution, which was not a substantive right. The amended Section 36, which requires a separate application for stay, was seen as a procedural change that did not affect any substantive rights.

5. Prospective vs. retrospective effect of the amended Section 36:
The court held that the application of the amended Section 36 to pending Section 34 applications is prospective, not retrospective. The amendment operates prospectively as it applies to future enforcement actions based on existing awards and pending challenges. The court also noted that the amendment is curative, addressing the imbalance created by the original Section 36, and procedural, affecting only the process of enforcement and not the substantive rights of the parties.

Conclusion:
The court dismissed the Chamber Summonses, holding that the amended Section 36 applies to all pending Section 34 applications as of 23rd October 2015. The parties were directed to bear their respective costs.

 

 

 

 

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