9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 1810 - HC - Indian LawsEnforcement of an Award - It is the case of the petitioners that the petitions under Section 34 of the said Act would be governed by the unamended provisions of, inter alia , Sections 34 and 36 and, therefore, the petitioners would have the right of an automatic stay on the filing of the petitions under Section 34 of the said Act - HELD THAT - Supreme Court in Thyssen 1999 (10) TMI 636 - SUPREME COURT where, after, considering several earlier decisions, the Supreme Court observed in paragraph 32 (which we have already extracted above) that the principles enunciated in the judgments show as to when a right accrues to a party under a repealed Act. The Supreme Court observed that it is not necessary that for the right to accrue, legal proceedings must be pending when the new Act comes into force. Furthermore, and more importantly, the Supreme Court observed that to have the award enforced when arbitral proceedings commenced under the old Act under that very Act was certainly an accrued right. In other words, all the aspects of enforceability of an award entail an accrued right both in the person in whose favour the award is made and against whom the award is pronounced. It will also be noticed that the Supreme Court made it clear that for the right to accrue, there is no necessity that legal proceedings must be pending when the new Act comes into force. The Supreme Court in Thyssen observed that the right to have the award enforced (which also comprises of the negative right of the award debtor to not have it enforced till his objections under Section 34 of the said Act are heard and decided) is certainly an accrued right. Given the fact that the amended Section 36 takes away the right of an automatic stay of enforcement of an award, it is clear that the amendment introduced in Section 36 by virtue of the Amending Act would definitely impinge upon the accrued right of the party against whom the award is given after the arbitral proceedings have been held under the unamended provisions. Since an accrued right is affected, unless a contrary intention appears in the amending statute, the amendments would have to be treated as prospective in operation. Prospective from the standpoint of commencement of the arbitral proceedings. While Section 9 pertains to interim measures which may be directed by the court prior, during arbitral proceedings or after the making of the award, Section 17 deals with the interim measures which may be ordered by an arbitral tribunal. If the interpretation of the respondents is to be accepted, then, in respect of arbitral proceedings commenced prior to 23.10.2015, the amended provisions would apply to proceedings under Section 9 of the said Act, but not to Section 17 thereof. This would result in a serious anomaly - if the expression to the arbitral proceedings used in the first limb of Section 26 is given the same expansive meaning as the expression in relation to arbitration proceedings as appearing in the second limb of Section 26, then, the matter becomes very simple and does not result in any anomaly. All the arbitral proceedings (and here we mean the entire gamut, including the court proceedings in relation to proceedings before the arbitral tribunal), which commenced in accordance with the provisions of Section 21 of the said Act prior to 23.10.2015, would be governed, subject to an agreement between the parties to the contrary, by the unamended provisions and all those, in terms of the second part of Section 26, which commenced on or after 23.10.2015 would be governed by the amended provisions. Section 26 of the Amending Act, if a narrow view of the expression to the arbitral proceedings is to be taken, is silent on those categories of cases where the arbitral proceedings commenced prior to 23.10.2015 and where even the award was made prior to 23.10.2015, but where either a petition under Section 34 was under contemplation or was already pending on 23.10.2015 - In the facts of the present case, the amendment to Sections 34 and 36, which pertain to the enforceability of an award, certainly affect the accrued rights of the parties. The petitions filed by the appellants under Section 34 of the said Act would have to be considered under the unamended provisions of the said Act and consequently, the appellants would be entitled to automatic stay of enforcement of the award till the disposal of the said petitions - the impugned order, to the extent it imposes a condition on the appellants / petitioners to deposit a sum of Rs 2.7 crores, is set aside - Appeal allowed.
Issues Involved:
1. Application of amended provisions of the Arbitration and Conciliation Act, 1996. 2. Interpretation of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015. 3. Impact of amendments on vested rights and accrued rights. 4. Automatic stay of enforcement of arbitral awards under Section 34. Detailed Analysis: Application of Amended Provisions: The main controversy revolves around whether the amended provisions of the Arbitration and Conciliation Act, 1996, particularly Sections 34 and 36, apply to arbitration proceedings that commenced before the amendments came into effect on 23.10.2015. The appellants argue that their petitions under Section 34 should be governed by the unamended provisions, thereby entitling them to an automatic stay of the arbitral award. The respondents contend that the amended provisions should apply, negating any automatic stay and allowing the court to impose conditions, such as the deposit of Rs 2.7 crores. Interpretation of Section 26: Section 26 of the Amending Act is pivotal in this case. It states: “Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act.” The appellants interpret this to mean that the unamended provisions apply to their case since their arbitration proceedings commenced before 23.10.2015. The respondents argue that "to the arbitral proceedings" refers only to proceedings before the arbitral tribunal and not to court proceedings, suggesting that the amended provisions should apply to court proceedings post-award. Impact on Vested and Accrued Rights: The appellants argue that the amendments affect their vested rights, particularly the right to an automatic stay of the enforcement of the arbitral award upon filing a petition under Section 34. They cite Section 6 of the General Clauses Act, 1897, which protects accrued rights unless a repealing Act explicitly states otherwise. The respondents counter that the amendments are procedural and do not affect substantive rights, thus should apply retrospectively. Automatic Stay of Enforcement: Prior to the amendments, filing a petition under Section 34 resulted in an automatic stay of the arbitral award's enforcement. The amended Section 36 requires a separate application for stay and allows the court to impose conditions. The appellants argue that this change adversely affects their substantive rights and should not apply retrospectively. The respondents argue that the change is procedural and does not affect the right to challenge the award itself. Conclusion: The court concluded that Section 26 of the Amending Act, if interpreted narrowly, does not address cases where arbitral proceedings commenced before 23.10.2015, but the award was made, or a petition under Section 34 was filed after this date. The amendments to Sections 34 and 36 affect accrued rights, particularly the right to an automatic stay. Therefore, the petitions under Section 34 should be governed by the unamended provisions, entitling the appellants to an automatic stay of the enforcement of the award. Consequently, the impugned order requiring the deposit of Rs 2.7 crores was set aside, and the appeals were allowed to this extent.
|
