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2023 (5) TMI 426 - SC - Indian LawsArbitration proceedings - in a case where the notice invoking arbitration is issued prior to the Amendment Act, 2015, the old Act shall be applicable (pre-amendment 2015) or the new Act? - HELD THAT - Section 11(6A) has been inserted by Amendment Act, 2015, by which the powers of the Court dealing with an application under Section 11(6) of the Act are restricted and as per section 11(6A), the powers of the Court while deciding application under Section 11(6) of the Act are confined to the examination of the existence of an arbitration agreement, which powers were not restricted in the pre-amendment Act, 2015. However, Section 26 of the Amendment Act, 2015 provides that 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 - as per section 21 of the principal Act the arbitral proceedings can be said to have commenced on the date on which a request for the dispute to be referred to the arbitration is received by the respondent. At this stage, it is required to be noted that by Amendment Act, 2015, Sections 34 and 36 of the Arbitration Act also came to be amended and the interference of the Court in challenge to the award has been restricted and/or narrowed down. The question of applicability of the Arbitration Amendment Act, 2015 fell for consideration before this Court in catena of decisions - In the case of M/S MAYAVTI TRADING PVT. LTD. VERSUS PRADYUAT DEB BURMAN 2019 (9) TMI 1548 - SUPREME COURT , it is observed and held that the position of law that prevails after insertion of section 11(6A) is that Supreme Court or, as the case may be, the High Court, while considering any application under Sections 11(4) to 11(6) is to confine itself to examination of existence of arbitration agreement, nothing more, nothing less, and leave all other preliminary issues to be decided by arbitrator. In the case of BCCI 2018 (3) TMI 812 - SUPREME COURT , it is observed and held that the Amendment Act, 2015 is prospective in nature. However, it is required to be noted that in the case of BCCI, this Court was considering the proceedings under sections 34 and 36 of the Amendment Act, 2015 and to that while interpreting section 26, it is observed that the Amendment Act is prospective in nature, and will apply even to those arbitral proceedings that are commenced, as understood by section 21 of the principal Act, prior to the Amendment Act, and to Court proceedings which have commenced on or after the Amendment Act came into force. The notice invoking arbitration clause was issued on 26.12.2013, i.e., much prior to the Amendment Act, 2015 and the application under Section 11(6) of the Act has been preferred/filed on 27.04.2016, i.e., much after the amendment Act came into force, the law prevailing prior to the Amendment Act, 2015 shall be applicable and therefore the High Court has rightly entered into the question of accord and satisfaction and has rightly dismissed the application under section 11(6) of the Act applying the principal Act, namely, the Arbitration and Conciliation Act, 1996, prevailing prior to the Amendment Act, 2015. In a case where the notice invoking arbitration is issued prior to the Amendment Act, 2015 and the application under Section 11 for appointment of an arbitrator is made post Amendment Act, 2015, the provisions of pre-Amendment Act, 2015 shall be applicable and not the Amendment Act, 2015 - Appeal dismissed.
Issues Involved:
1. Applicability of the Amendment Act, 2015 to Section 11(6) applications. 2. Interpretation of Section 26 of the Amendment Act, 2015. 3. Relevance of previous judgments, including BCCI v. Kochi Cricket and Parmar Construction Company, in determining the applicable law. Summary: 1. Applicability of the Amendment Act, 2015 to Section 11(6) Applications: The Supreme Court examined whether the Amendment Act, 2015 should apply to an application under Section 11(6) of the Arbitration Act, 1996, when the notice invoking arbitration was issued before the Amendment Act but the application was filed after the Amendment Act came into force. The Court upheld the High Court's decision that the pre-Amendment Act, 2015, should apply, as the arbitration proceedings commenced with the notice invoking arbitration, which was issued before the Amendment Act. 2. Interpretation of Section 26 of the Amendment Act, 2015: The Court analyzed Section 26 of the Amendment Act, 2015, which states that the Amendment Act shall not apply to arbitral proceedings commenced before its enactment unless the parties agree otherwise. The Court emphasized that the term "arbitral proceedings" refers to proceedings before an Arbitral Tribunal, while "court proceedings in relation to arbitral proceedings" refer to judicial proceedings. The Court concluded that the Amendment Act is prospective and applies to court proceedings initiated after its commencement date. 3. Relevance of Previous Judgments: The appellant argued that the decision in BCCI v. Kochi Cricket, which held the Amendment Act, 2015 to be prospective, should apply. However, the Court noted that BCCI dealt with Sections 34 and 36, not Section 11(6). The Court found that Parmar Construction Company, which directly addressed Section 11(6) applications, was more relevant. Parmar held that the pre-Amendment Act applies if the arbitration notice was issued before the Amendment Act. The Court also referenced other cases like S.P. Singla Constructions and Pradeep Vinod Construction Company, which supported this view. Conclusion: The Supreme Court dismissed the appeal, affirming that the pre-Amendment Act, 2015, applies to the Section 11(6) application, as the arbitration notice was issued before the Amendment Act. The Court upheld the High Court's decision to consider the issue of "accord and satisfaction" under the pre-Amendment Act.
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