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TMI Blog2018 (3) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... ral proceedings would, therefore, apply only to Court proceedings which relate to the arbitral proceedings. The scheme of Section 26 is thus clear: that the Amendment Act is prospective in nature, and will apply to those arbitral proceedings that are commenced, as understood by Section 21 of the principal Act, on or after the Amendment Act, and to Court proceedings which have commenced on or after the Amendment Act came into force. From a reading of Section 26 as interpreted by us, it thus becomes clear that in all cases where the Section 34 petition is filed after the commencement of the Amendment Act, and an application for stay having been made under Section 36 therein, will be governed by Section 34 as amended and Section 36 as substituted. It is enough to state that Section 26 of the Amendment Act makes it clear that the Amendment Act, as a whole, is prospective in nature. Thereafter, whether certain provisions are clarificatory, declaratory or procedural and, therefore, retrospective, is a separate and independent enquiry, which we are not required to undertake in the facts of the present cases, except to the extent indicated above, namely, the effect of the substit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, AOR, Mr. P. Chidambaram, Sr. Adv., Mr. Jehangir Jejeebhoy, Adv., Mr. Vivek A. Vashi, AOR, Mrs. Kanika Sharma Goenka, Adv., Mr. Hrushi Narvekar, Adv., Ms. Shaheda Madraswala, Adv., Mr. Utkarsh Srivastava, Adv., Mr. Kapil Sibal, Sr. Adv., Mr. Jehangir Jejeebhoy, Adv., Mr. Vivek A. Vashi, Adv., Mrs. Kanika Sharma Goenka, Adv., Mr. Hrushi Narvekar, Adv., Ms. Shaheda Madraswala, Adv., Mr. Utkarsh Srivastava, Adv., Mr. Mohammed Nizam Pasha, Adv., Dr. Abhishek Manu, Sr. Adv., Mr. Jehangir Jejeebhoy, Adv., Mr. Vivek A. Vashi, Adv., Mrs. Kanika Sharma Goenka, Adv., Mr. Hrushi Narvekar, Adv., Ms. Shaheda Madraswala, Adv., Mr. Utkarsh Srivastava, Adv., Mr. Sajan Pooveyya, Sr. Adv., Mr. Pruyadarshe Banerjee, Adv., Mr. P. Singh Kharola, Adv., Mr. Ranjeetha Rohtagi, Adv., Ms. Iti Agarwal, Adv., Ms. Tamanna Goyal, Adv., for M/S. D.S.K. Legal, AOR, Ms. Olga Lume Pereira, Adv., Mr. Mahesh Agarwal, Adv., Mr. Vivek Jain, Adv., Mr. Rishabh Parikh, Adv., Mr. E. C. Agrawala, AOR, Mr. Mitul Shetal, Adv., Mr. Mahesh Agarwal, Adv., Ms. Aastha Mehta, Adv., Mr. E. C. Agrawala, AOR, Mr. Anirudh Krishnan, Adv., Mr. Punit Damodar, Adv., Mr. Rishabh Parikh, Adv., Mrs. Shally Bhasin, AOR, Mr. Chirag M. Shroff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Maharashtra Airports Development Company Ltd. v. M/s PBA Infrastructure Ltd. (SLP(C) No.5021 of 2017) and UB Cotton Pvt. Ltd. v. Jayshri Ginning and Spinning Pvt. Ltd. (SLP(C) No.33690 of 2017), Section 34 applications under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 1996 Act ) were all filed prior to the coming into force of the Amendment Act w.e.f. 23rd October, 2015. In the other four appeals, the Section 34 applications were filed after the Amendment Act came into force. The question with which we are confronted is as to whether Section 36, which was substituted by the Amendment Act, would apply in its amended form or in its original form to the appeals in question. 4. The relevant facts of the first appeal namely, Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors. (SLP(C) Nos. 19545-19546 of 2016), are as follows. A notice dated 18th January, 2012 was sent by Respondent No.1 invoking arbitration under a franchise agreement dated 12th March, 2011. A Sole Arbitrator was appointed, who delivered two arbitral awards dated 22nd June, 2015 against the Appellant and in favour of the Respondents. On 16th September, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z., on 7th December, 2016 in the first two appeals, on 6th December, 2016 in the third appeal and on 4th January, 2016 in the last appeal. 6. Section 36, which is the bone of contention in the present appeals, is set out hereinbelow: PRE-AMENDED PROVISION Section 36. Enforcement. Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court. AMENDED PROVISION Section 36. Enforcement. (1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court. (2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omatic stay of the award under the old regime, Order LXI, Rule 5 of the CPC will now be applicable. As a result of this, instead of an automatic stay, a deposit of the entire amount or substantial amount of the award would now have to be made in the interim period between the award and the decision in the Section 34 application. He referred to the 246th Law Commission Report as well as the debates leading to the Amendment Act to buttress his submissions. He also referred to the report of a High Level Committee headed by Justice B.N. Srikrishna, delivered on 30th July, 2017, in which, after referring to the divergent views taken by the High Courts, the Committee recommended that the Amendment Act will not apply to arbitral proceedings as well as Court proceedings which arise out of such arbitral proceedings, where the arbitral proceedings themselves have commenced in accordance with Section 21 before the commencement of the Amendment Act. Concomitantly, according to the High Level Committee, the Amendment Act will only apply to arbitral proceedings commenced on or after the commencement of the Amendment Act and to Court proceedings that arise out of or in relation to such arbitral p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforceability and execution, and stated that whereas the former dealt with substantive rights, the latter dealt with procedural rights. Equally, the expression has been contained in the amended Section 36(2) is purely contextual and equivalent to the expression is . For this, he has cited certain judgments which we will refer to in due course. According to the learned senior counsel, the decision in National Aluminium Co. Ltd. v. Pressteel Fabrications (P) Ltd. (2004) 1 SCC 540, which exhorted the legislature to amend Section 36, cannot take the matter any further, in that the said decision cannot be read to say that Section 36 should be substituted with retrospective effect. 9. Shri Tushar Mehta, learned Additional Solicitor General appearing in SLP (C) No.5021 of 2017, supported the arguments of his predecessor and added that, given a retrospective operation of Section 36, various anomalies would arise, which would lead to hardship and inconvenience and that, therefore, we should not impart retrospective operation to the aforesaid provision. 10. Shri Arvind Datar, learned senior advocate appearing in SLP (C) No.20224 of 2016, supported Shri Viswanathan in statin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LP(C) Nos.19545-19546 of 2016, emphasized that in the first part of Section 26, there is an absence of the mention of Court proceedings. According to the learned senior counsel, this was of great significance and would, therefore, show that the Amendment Act would retrospectively apply to Court proceedings, as distinguished from arbitral proceedings. On a correct construction of Section 26, according to the learned senior counsel, the second part of Section 26 takes within its sweep both arbitral proceedings as well as Court proceedings in relation thereto and would, therefore, apply to arbitral proceedings as well as Court proceedings in relation thereto, which have commenced after the Amendment Act came into force. For this purpose, he relied heavily on paragraph 23 in Thyssen (supra) and, submitted that, therefore, on a true construction of Section 26, Section 34 proceedings that have commenced before the Amendment Act came into force would be governed by the Amendment Act, and arbitral proceedings which commenced after the Amendment Act, together with Section 34 applications made in relation thereto, would then be governed under the second part of Section 26 of the Amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this purpose, he referred to certain judgments. 13. Shri P. Chidambaram, learned senior counsel appearing for the Respondents in SLP (C) Nos.8372-8373 of 2017, emphasised the word but that appears in Section 26, which not only segregates the first part of Section 36 from the second part, but also makes it clear that the two parts apply to two different situations. The first part, according to learned senior counsel, would apply to the arbitral proceedings themselves i.e. from the Section 21 stage up to the Section 32 stage of the 1996 Act, whereas the second part would include all proceedings that begin from the Section 21 stage and all court proceedings in relation thereto. According to Shri Chidambaram, Section 36, in its original form, is only a clog on the right of the decree holder. He argued that there is no corresponding vested right in the judgment debtor to indefinitely delay proceedings and for this purpose, he cited several judgments. According to the learned senior counsel, Section 36 proceedings are entirely independent of Section 34 proceedings and the moment Section 36 speaks of an award being enforceable under the Code of Civil Procedure as if it were a decr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding would be fixed with reference to Section 21 and the date of commencement of a court proceeding would be fixed with reference to the date on which the court proceeding is filed, and it is only arbitral proceedings and court proceedings which are filed after the commencement of the Amendment Act that would be so covered. 16. Shri Nakul Dewan, learned Advocate appearing on behalf of the Respondent in SLP (C) No.20224 of 2016 has argued that the first part of Section 26 speaks of the arbitral proceedings commenced in accordance with the provisions of Section 21. The second part of Section 26 omits the word the as well as Section 21, making it clear that it is the arbitral proceedings before the Arbitrator alone that is referred to in the first part of Section 26, as opposed to Court proceedings referred to in the second part of Section 26, where the expression in relation to arbitral proceedings does not contain the word the . According to him, such interpretation is not contrary to the doctrine of party autonomy, which is never conferred on any party without limits, there being non-derogable provisions in the 1996 Act from which parties, even by agreement, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act. 18. At this point, it is instructive to refer to the 246th Law Commission Report which led to the Amendment Act. This Report, which was handed over to the Government in August, 2014, had this to state on why it was proposing to replace Section 36 of the 1996 Act: AUTOMATIC STAY OF ENFORCEMENT OF THE AWARD UPON ADMISSION OF CHALLENGE 43. Section 36 of the Act makes it clear that an arbitral award becomes enforceable as a decree only after the time for filing a petition under section 34 has expired or after the section 34 petition has been dismissed. In other words, the pendency of a section 34 petition renders an arbitral award unenforceable. The Supreme Court, in National Aluminum Co. Ltd. v. Pressteel Fabrications, (2004) 1 SCC 540 held that by virtue of section 36, it was impermissible to pass an Order directing the losing pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (2) hereof, (ii) insert sub-section (2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render the award unenforceable, unless upon a separate application made for that purpose, the Court grants stay of the operation of the award in accordance with the provisions of sub-section (3) hereof; (iii) insert sub-section (3) Upon filing of the separate application under subsection (2) for stay of the operation of the award, the court may, subject to such conditions as it may deem fit, grant stay of the operation of the award for reasons to be recorded in writing. (iv) insert proviso Provided that the Court shall while considering the grant of stay, in the case of an award for money shall have due regard to the provisions for grant of stay of money decrees under the Code of Civil Procedure, 1908. [ NOTE : This amendment is to ensure that the mere filing of an application under section 34 does not operate as an automatic stay on the enforcement of the award. The Supreme Court in National Aluminium Co. Ltd. v. Pressteel Fabrications (P) Ltd. and Anr, (2004) 1 SCC 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to by counsel on both sides. Shri T. Satpathy (Dhenkanal) stated: You have brought in an amendment to Section 25 (a) saying that this Act will not be retrospective. When the Bill for judges pension and salary could be retrospective, why can you not amend it with retrospective effect so that ONGC-RIL case could be brought under this Act and let it be adjudicated as early as possible within 18 months and let the people of this country get some justice some time. Let us be fair to them. To similar effect is the speech of Shri APJ Reddy, which reads as under: It is unclear whether the amended provisions shall apply to pending arbitration proceedings. The Law Commission of India, in its 246th Report, which recommended amendments to the Arbitration Conciliation Act, 1996, had proposed to insert a new Section 85-A to the Act, which would clarify the scope of operation to each amendment with respect to pending arbitration proceedings. However, this specific recommendation has not been incorporated into the Ordinance. One of the reasons for bringing about this ordinance is to instill a sense of confidence in foreign investors in our judicial process, with regard to cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tend to adopt a purposive approach while interpreting the statute which repeals the old law and for that purpose to take into account the objects and reasons which led to the enacting of the new Act. We have seen above that this approach was adopted by this Court in M.M.T.C. Ltd. case [(1996) 6 SCC 716]. Provisions of both the Acts, old and new, are very different and it has been so observed in Sundaram Finance Ltd. case [(1999) 2 SCC 479]. In that case, this Court also said that provisions of the new Act have to be interpreted and construed independently and that in fact reference to the old Act may actually lead to misconstruction of the provisions of the new Act. The Court said that it will be more relevant, while construing the provisions of the new Act, to refer to the UNCITRAL Model Law rather than the old Act. In the case of Kuwait Minister of Public Works v. Sir Frederick Snow and Partners [(1984) 1 All ER 733 (HL)] the award was given before Kuwait became a party to the New York Convention recognised by an Order in Council in England. The House of Lords held that though a foreign award could be enforced in England under the (U.K.) Arbitration Act, 1975 as when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 26, that the provision is indeed in two parts. The first part refers to the Amendment Act not applying to certain proceedings, whereas the second part affirmatively applies the Amendment Act to certain proceedings. The question is what exactly is contained in both parts. The two parts are separated by the word but , which also shows that the two parts are separate and distinct. However, Shri Viswanathan has argued that the expression but means only that there is an emphatic repetition of the first part of Section 26 in the second part of the said Section. For this, he relied upon the Concise Oxford Dictionary on Current English, which states: introducing emphatic repetition; definitely (wanted to see nobody, but nobody) . Quite obviously, the context of the word but in Section 26 cannot bear the aforesaid meaning, but serves only to separate the two distinct parts of Section 26. 24. What will be noticed, so far as the first part is concerned, which 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 oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication. It is, inter alia, because timelines for the making of an arbitral award have been laid down for the first time in Section 29A of the Amendment Act that parties were given the option to adopt such timelines which, though procedural in nature, create new obligations in respect of a proceeding already begun under the unamended Act. This is, of course, only one example of why parties may otherwise agree and apply the new procedure laid down by the Amendment Act to arbitral proceedings that have commenced before it came into force.) In stark contrast to the first part of Section 26 is the second part, where the Amendment Act is made applicable in relation to arbitral proceedings which commenced on or after the date of commencement of the Amendment Act. What is conspicuous by its absence in the second part is any reference to Section 21 of the 1996 Act. Whereas the first part refers only to arbitral proceedings before an arbitral tribunal, the second part refers to Court proceedings in relation to arbitral proceedings, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, in Transport and Dock Workers' Union others v. New Dholera Steamship Ltd., Bombay and others, (1967) 1 LLJ 434, a Five Judge Bench of this Court held: 6. It was contended before us that as an appeal is a continuation of the original proceeding the repeal should not affect the enforcement of the provisions of the Ordinance in this case. Reliance is placed upon Section 6 of the General Clauses Act, 1897 wherein is indicated the effect of repeal of an enactment by another. It is contended that as the Payment of Bonus Ordinance has been repealed by Section 40(1), the consequences envisaged in Section 6 of the General Clauses Act must follow and the present matter must be disposed of in accordance with the Ordinance as if the Act had not been passed. It is submitted that there was a right and a corresponding obligation to pay bonus under Section 10 of the Ordinance and that right and obligation cannot be obliterated because of the repeal of the Ordinance. This argument is not acceptable because of the provisions of the second sub-section of Section 40. That sub-section reads as follows: 40. Repeal and saving . (1)*** (2) Notwithstanding such repeal, anythin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention to the contrary. 28. Shri Sundaram s submission is also not in consonance with the law laid down in some of our judgments. The approach to statutes, which amend a statute by way of repeal, was put most felicitously by B.K. Mukherjea, J. in State of Punjab v. Mohar Singh , 1955 1 SCR 893 at 899-900, thus: In our opinion the approach of the High Court to the question is not quite correct. Whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to the 1996 Act. The press release states that the Union Cabinet, chaired by the Prime Minister, has approved the Arbitration and Conciliation (Amendment) Bill, 2018 in which a new Section 87 is proposed to be inserted as follows: A new section 87 is proposed to be inserted to clarify that unless parties agree otherwise the Amendment Act 2015 shall not apply to (a) Arbitral proceedings which have commenced before the commencement of the Amendment Act of 2015 (b) Court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the Amendment Act of 2015 and shall apply only to Arbitral proceedings commenced on or after the commencement of the Amendment Act of 2015 and to court proceedings arising out of or in relation to such Arbitral proceedings. The Srikrishna Committee had recommended the following: The Committee feels that permitting the 2015 Amendment Act to apply to pending court proceedings related to arbitrations commenced prior to 23 October 2015 would result in uncertainty and prejudice to parties, as they may have to be heard again. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt: Nitya Ranjan Jena v. Tata Capital Financial Services Ltd., GA No. 145/206 with AP No. 15/2016, West Bengal Power Development Corporation Ltd. v. Dongfang Electric Corporation, 2017 SCCOnline Cal 9388, Saraf Agencies v. Federal Agencies for State Property Management, AIR 2017 Cal. 65, Reliance Capital Ltd. v. Chandana Creations, 2016 SCC Cal. 9558 and Braithwaite Burn Jessop Construction Company Ltd. v. Indo Wagon Engineering Ltd., AIR 2017 (NOC 923) 314. ii. Bombay High Court: M/s. Maharashtra Airport Development Company Ltd. v. M/s. PBA Infrastructure Ltd., 2017 SCCOnline Bom (7840), Enercon GmbH v. Yogesh Mehra, 2017 SCC Bom 1744 and Global Aviation Services Pvt. Ltd. v. Airport Authority of India, Commercial Arbitration Petition No. 434/2017, iii. Madras High Court: Jumbo Bags Ltd. v. New India Assurance Company Limited, 2016 (3) CTC 769. iv. Delhi High Court: ICI Soma JV v. Simplex Infrastructures Ltd., 2016 SCC Online Del 5315, Tantia-CCIL (JV) v. Union of India, ARB. P. 615/2016, Raffles Design International India Pvt. Ltd. v. Educomp Professional Education Ltd. and Ors., OMP (I) (COMM.) 23/2015, Orissa Concrete and Allied Industries Ltd. v. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same infirmity as Shri Viswanathan s interpretation. Shri A. Krishnan, in bringing in the concept of seat , is again doing complete violence to the language of Section 26, as place of arbitration is a well-known concept contained in Section 20 of the 1996 Act, which finds no mention whatsoever in Section 26 of the Amendment Act. For these reasons, his interpretation cannot also be accepted. 30. Shri Neeraj Kishan Kaul, learned senior counsel appearing on behalf of Respondents in SLP(C) Nos.19545-19546 of 2016, has argued that the first part of Section 26 does not apply to Court proceedings at all, thereby indicating that the Amendment Act must be given retrospective effect insofar as Court proceedings in relation to arbitral proceedings are concerned. For this purpose, he relied on Minister of Public Works of the Government of the State of Kuwait (supra). 31. In that case, the question that arose was as to the correct construction of Section 7(1) of the U.K. Arbitration Act, 1975. The said section was given retrospective effect in applying the New York Convention to arbitration agreements that were entered into before the convention was made applicable, for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 Act in the second part of Section 26 of the Amendment Act is also a good reason as to why arbitral proceedings before an arbitral tribunal are not contemplated in the second part. 33. Shri Sibal has argued that Section 26 is not a savings clause at all and cannot be construed as such. According to the learned senior counsel, Section 26 manifests a clear intention to destroy all rights, vested or otherwise, which have accrued under the unamended 1996 Act. We are unable to accept these submissions as it is clear that the intendment of Section 26 is to apply the Amendment Act prospectively to arbitral proceedings and to court proceedings in relation thereto. This approach again does not commend itself to us. 34. Dr. Singhvi has, however, argued that the approach indicated by us above could be termed as an intermediate approach , i.e. it is an approach which does not go to either of the extreme approaches of Shri Sundaram, Shri Viswanathan and Shri Datar or that of Shri Sibal. Further, according to the learned senior counsel, this approach has the merit of both clarity, as well as no anomalies arising as a result, as it is clear that the Amendment Act is to be applied onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have sufficed and when the legislature has used the expression in relation to , a proper meaning has to be given. This expression does not admit of restrictive meaning. The first limb of Section 85(2)( a ) is not a limited saving clause. It saves not only the proceedings pending at the time of commencement of the new Act but also the provisions of the old Act for enforcement of the award under that Act. (at page 369) [Emphasis Supplied] The judgment then goes on to refer to Section 48 of the Arbitration Act, 1940, which is set out therein as follows: 48. Saving for pending references.-The provisions of this Act shall not apply to any reference pending at the commencement of this Act, to which the law in force immediately before the commencement of this Act shall notwithstanding any repeal effected by this Act continue to apply. (at page 349) Paragraph 33 goes on to state the difference between Section 85(2)(a) of the 1996 Act and the earlier Section 48 of the 1940 Act, as follows: 33. Because of the view of Section 85(2)( a ) of the new Act which we have taken, it is not necessary for us to consider difference in the repealing provisions as contained in Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The second part of Section 85(2)(a) is couched in language similar to the second part of Section 26 with this difference, that Section 21 contained in the first part of Section 26 is conspicuous by its absence in the second part. 38. The judgment in Thyssen (supra) was followed in N.S. Nayak (supra). After setting out paragraph 32 of the judgment in Thyssen (supra) and paragraphs 22 and 23 of the aforesaid judgment, this Court concluded: 13. As stated in paragraph 22, Conclusion 1 without any reservation provides that the provisions of the old Act shall apply in relation to the arbitral proceedings which have commenced before coming into force of the new Act. Conclusion 2, in our view, is required to be read in context with Conclusion 1, that is to say, the phrase in relation to arbitral proceedings cannot be given a narrow meaning to mean only pendency of the proceedings before the arbitrator. It would cover not only proceedings pending before the arbitrator but would also cover the proceedings before the court and any proceedings which are required to be taken under the old Act for the award becoming a decree under Section 17 thereof and also appeal arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or stay having been made under Section 36 therein, will be governed by Section 34 as amended and Section 36 as substituted. But, what is to happen to Section 34 petitions that have been filed before the commencement of the Amendment Act, which were governed by Section 36 of the old Act? Would Section 36, as substituted, apply to such petitions? To answer this question, we have necessarily to decide on what is meant by enforcement in Section 36. On the one hand, it has been argued that enforcement is nothing but execution , and on the other hand, it has been argued that enforcement and execution are different concepts, enforcement being substantive and execution being procedural in nature. 40. At this stage, it is necessary to set out the scheme of the 1996 Act. An arbitral proceeding commences under Section 21, unless otherwise agreed by parties, when a dispute arises between the parties for which a request for the dispute to be referred to arbitration is received by the respondent. The arbitral proceedings terminate under Section 32(1) by the delivery of a final arbitral award or by the circumstances mentioned in Section 32(2). The mandate of the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sons v. Hansraj Nathuram , (1971) 1 SCC 721 at 728, this Court was concerned with a judgment debtor s right to resist execution of a decree. Section 20(1)(b) of the Code of Civil Procedure (Amendment) Act, 1951 was extended to Madhya Bharat and other areas, as a result of which the judgment debtor s right to resist execution of a decree was protected. In this context, this Court held that the Amendment Act of 1951 made decrees, which could have been executed only by courts in British India, executable in the whole of India. Stating that the change made was one relating to procedure only, this Court held: 15. This provision undoubtedly protects the rights acquired and privileges accrued under the law repealed by the Amending Act. Therefore the question for decision is whether the non-executability of the decree in the Morena Court under the law in force in Madhya Bharat before the extension of the Code can be said to be a right accrued under the repealed law. We do not think that even by straining the language of the provision it can be said that the non-executability of a decree within a particular territory can be considered as a privilege. Therefore the only questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings. By the extension of the Code to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court is now made competent to execute the decree. 16. That a provision to preserve the right accrued under a repealed Act was not intended to preserve the abstract rights conferred by the repealed Act.... It only applies to specific rights given to an individual upon happening of one or the other of the events specified in statute - See Lord Atkin s observations in Hamilton Gell v. White. [(1922) 2 KB 422]. The mere right, existing at the date of repealing statute, to take advantage of provisions of the statute repealed is not a right accrued within the meaning of the usual saving clause - See Abbot v. Minister for Lands [(1895) AC 425] and G. Ogden Industries Pvt. Ltd. v. Lucas. [(1969) 1 All ER 121] In Narhari Shivram Shet Narvekar v. Pannalal Umediram (1976) 3 SCC 203 at 207, this Court, following Lalji Raja (supra), held as follows: 8. Learned counsel appearing for the appellant however submitted that since the Code of Civil Procedure was not applicable to Goa the decree became inexecutable and this being a vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o provides specifically or by necessary intendment and not otherwise. We have already held that Section 26 does specifically provide that the court proceedings in relation to arbitral proceedings, being independent from arbitral proceedings, would not be viewed as a continuation of arbitral proceedings, but would be viewed separately. This being the case, it is unnecessary to refer to judgments such as Union of India v. A.L. Rallia Ram , (1964) 3 SCR 164 and NBCC Ltd. v. J.G. Engineering (P) Ltd. , (2010) 2 SCC 385, which state that a Section 34 proceeding is a supervisory and not an appellate proceeding. Snehadeep Structures (P) Ltd. v. Maharashtra Small-Scale Industries Development Corpn. Ltd. , (2010) 3 SCC 34 at 47-49, which was cited for the purpose of stating that a Section 34 proceeding could be regard as an appeal within the meaning of Section 7 of the Interest on Delayed Payments To Small Scale and Ancillary Industrial Undertakings Act, 1993, is obviously distinguishable on the ground that it pertains to the said expression appearing in a beneficial enactment, whose object would be defeated if the word appeal did not include a Section 34 application. This is made cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing on behalf of the Respondents, has also argued that the expression has been in Section 36(2), as amended, would make it clear that the section itself refers to Section 34 applications which have been filed prior to the commencement of the Amendment Act and that, therefore, the said section would apply, on its plain language, even to Section 34 applications that have been filed prior to the commencement of the Amendment Act. For this purpose, the judgment in State of Bombay v. Vishnu Ramchandra (1961) 2 SCR 26, was strongly relied upon. In that judgment, it was observed, while dealing with Section 57 of the Bombay Police Act, 1951, that the expression has been punished is in the present perfect tense and can mean either shall have been or shall be . Looking to the scheme of the enactment as a whole, the Court felt that shall have been is more appropriate. This decision was referred to in paragraphs 60 and 61 of Workmen v. Firestone Tyre Rubber Co. of India (P) Ltd. , (1973) 1 SCC 813 at 838 and the ratio culled out was that such expression may relate to past or future events, which has to be gathered from the context, as well as the scheme of the particular leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culties the Departmental Advisory Committee on Arbitration hesitated for a time both as to the principle and as to whether the power to dismiss should be vested in the court or the arbitrator, but the pressure from all quarters became irresistible and in 1990 the Courts and Legal Services Act inserted, through the medium of Section 102, a new Section 13A in the Arbitration Act, 1950. (at page 522) The question which arose in that case was whether delay that had taken place before the Section came into force could be taken into account by an arbitrator in order to reject the claim in that case. The House of Lords held that given the clamor for change and given the practical value and nature of the rights involved, it would be permissible to look at delay caused even before the Section came into force. In his concluding paragraph, Lord Mustill held: In this light, I turn to the language of Section 13A construed, in case of doubt, by reference to its legislative background. The crucial words are: (a). . . there has been inordinate and inexcusable delay . . . Even if read in isolation these words would I believe be sufficient, in the context of Section 13A as a whole, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us to go into this by-lane of forensic argument. 48. However, Shri Viswanathan strongly relied upon the observations made in paragraph 32 in Thyssen (supra) and the judgment in Hameed Joharan v. Abdul Salam , (2001) 7 SCC 573. It is no doubt true that paragraph 32 in Thyssen (supra) does, at first blush, support Shri Viswanathan s stand. However, this was stated in the context of the machinery for enforcement under Section 17 of the 1940 Act which, as we have seen, differs from Section 36 of the 1996 Act, because of the expression in relation to arbitral proceedings , which took in the entire gamut, starting from the arbitral proceedings before the arbitral tribunal and ending up with enforcement of the award. It was also in the context of the structure of the 1940 Act being completely different from the structure of the 1996 Act, which repealed the 1940 Act. In the present case, it is clear that enforcement in Section 36 is to treat the award as if it were a decree and enforce it as such under the Code of Civil Procedure, which would only mean that such decree has to be executed in the manner indicated. Also, a stray sentence in a judgment in a particular context cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is thus, it has been contended, a legislative bar under Section 35 of the Indian Stamp Act for enforceability of partition decree. Mr Mani contended that enforcement includes the whole process of getting an award as well as execution since execution otherwise means due performance of all formalities, necessary to give validity to a document. We are, however, unable to record our concurrence therewith. Prescription of a twelve-year period certain cannot possibly be obliterated by an enactment wholly unconnected therewith. Legislative mandate as sanctioned under Article 136 cannot be kept in abeyance unless the selfsame legislation makes a provision therefor. It may also be noticed that by the passing of a final decree, the rights stand crystallised and it is only thereafter its enforceability can be had, though not otherwise. (at page 593) It is for this reason that it was stated that enforceability of a decree under the Limitation Act cannot be the subject matter of Section 35 of the Stamp Act. Therefore, Section 35 of the Stamp Act could not be held to overrun the Limitation Act and thus, give a complete go-by to the legislative intent of Article 136 of the Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed and followed its unreported decision in Uttam Singh Dugal Co. v. Union of India as follows: It seems to us that the main reason given by the two Full Benches for their conclusion is contrary to what was held by this Court in its unreported decision in Uttam Singh Dugal Co. v. Union of India [ Civil Appeal No. 162 of 1962-judgment delivered on 11-10-1962] . The facts in this case, shortly stated, were that Uttam Singh Dugal Co. filed an application under Section 33 of the Act in the Court of the Subordinate Judge, Hazaribag. The Union of India, Respondent 1, called upon Respondent 2, Col. S.K. Bose, to adjudicate upon the matter in dispute between Respondent 1 and the appellant Company. The case of Uttam Singh Dugal Co. was that this purported reference to Respondent 2 for adjudication on the matters alleged to be in dispute between them and Respondent 1 was not competent because by an award passed by Respondent 2 on April 23, 1952 all the relevant disputes between them had been decided. The High Court held inter alia that the first award did not create any bar against the competence of the second reference. On appeal this Court after holding that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame into force, and that an award has some legal force and is not a mere waste paper. If the award in question is not a mere waste paper but has some legal effect it plainly purports to or affects property within the meaning of Section 17(1)( b ) of the Registration Act. (at pages 248-249) 53. Justice Hegde, in a separate concurring judgment, specifically stated that an award creates rights in property, but those rights cannot be enforced until the award is made a decree of the Court. The Learned Judge put it very well when he said, It is one thing to say that a right is not created, it is an entirely different thing to say that the right created cannot be enforced without further steps . The Amendment Act has only made an award executable conditionally after it is made, like a judgment of a Court, the only difference being that a decree would not have to be formally drawn following the making of such award. 54. Shri Viswanathan then argued, relying upon R. Rajagopal Reddy v. Padmini Chandrasekharan (1995) 2 SCC 630, Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2001) 6 SCC 356, Sedco Forex International Drill. Inc. v. CIT (2005) 12 SCC 717 and Bank of Baroda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said arbitration agreement. The argument on behalf of the Appellants is that parties are entitled to proceed on the basis of the law as it exists on the date on which they entered into an agreement to refer disputes to arbitration. If this were to be the case, the starting point of the application of the Amendment Act being only when a notice to arbitrate has been received by the respondent, which as has been stated above, could be many years after the arbitration agreement has been entered into, would itself give rise to the anomaly that the amended law would apply even to arbitration proceedings years afterwards as and when a dispute arises and a notice to arbitrate has been issued under Section 21. In such a case, the parties, having entered into an arbitration agreement years earlier, could well turn around and say that they never bargained for the change in law that has taken place many years after, and which change will apply to them, since the notice, referred to in Section 21, has been issued after the Amendment Act has come into force. Cut off dates, by their very nature, are bound to lead to certain anomalies, but that does not mean that the process of interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, it is high time that urgent steps are taken to facilitate quick enforcement of contracts, easy recovery of monetary claims and award of just compensation for damages suffered and reduce the pendency of cases in courts and hasten the process of dispute resolution through arbitration, so as to encourage investment and economic activity. 5. As Parliament was not in session and immediate steps were required to be taken to make necessary amendments to the Arbitration and Conciliation Act, 1996 to attract foreign investment by projecting India as an investor friendly country having a sound legal framework, the President was pleased to promulgate the Arbitration and Conciliation (Amendment) Ordinance, 2015. 6. It is proposed to introduce the Arbitration and Conciliation (Amendment) Bill, 2015, to replace the Arbitration and Conciliation (Amendment) Ordinance, 2015, which inter alia, provides for the following, namely:- (i) to amend the definition of Court to provide that in the case of international commercial arbitrations, the Court should be the High Court; (ii) to ensure that an Indian Court can exercise jurisdiction to grant interim measures, etc., even where the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable to Section 34 petitions filed after 23rd October, 2015, but will be applicable to Section 34 petitions filed in cases where arbitration proceedings have themselves commenced only after 23rd October, 2015. This would mean that in all matters which are in the pipeline, despite the fact that Section 34 proceedings have been initiated only after 23rd October, 2015, yet, the old law would continue to apply resulting in delay of disposal of arbitration proceedings by increased interference of Courts, which ultimately defeats the object of the 1996 Act. (These amendments have the effect, as stated in HRD Corporation (Marcus Oil and Chemical Division) v. Gail (India) Limited (Formerly Gas Authority of India Ltd.) 2017 SCC Online 1024 (at paragraph 18) of limiting the grounds of challenge to awards as follows: In fact, the same Law Commission Report has amended Sections 28 and 34 so as to narrow grounds of challenge available under the Act. The judgment in ONGC v. Saw Pipes Ltd, (2003) 5 SCC 705, has been expressly done away with. So has the judgment in ONGC v. Western Geco International Ltd., (2014) 9 SCC 263. Both Sections 34 and 48 have been brought back to the positi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 13 May 2016, as also its Statement of Claim of 30 September 2014, at paragraph 102(M).) In the Tribunal s view, given that WWIL is only part owned by Enercon (hence Enercon s pecuniary disadvantage resulting from the Mehra directors wrongdoing is not the same as that of WWIL) and further that WWIL remains the person most immediately affected by such wrongdoing, the liability of the Mehra directors is best discharged by requiring them to deciding upon such relief in favour of WWIL (as distinct from direct relief in favour of Enercon), the Tribunal sees no material disadvantage to Enercon, and, as for the Mehra directors, no possible prejudice or other unfairness, whether as a matter of pleading, the form of relief or otherwise. It is only thereafter that the Tribunal awarded the aforesaid amount in paragraph 331(3)(b) as follows: (b) Jointly and severally- (i) to pay to WWIL the sum of INR 6,772,456,570, being the profit made by Vish Wind on the sale of allotment rights to WWIL in the years ending 31 March 2011 and 2012 together with interest thereon at the rate of 3% over European Central Bank rate from those dates until the date of this Award. (ii) To pay to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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