Applicability of the Arbitration and Conciliation Act (Amendment) Act, 2015 to pending arbitration/ court proceedings

The Supreme Court (‘SC’) in Board of Control for Cricket in India v. Kochi Cricket Private Limited[1] has decided on whether the amendments introduced to the Arbitration and Conciliation Act, 1996 on October 23, 2015 (‘Commencement Date’), would be applicable to pending arbitration/court proceedings, which came into force.

Kochi Cricket Private Limited successfully defended the decision of the Bombay High Court (‘Bombay HC’) on the applicability of the amended Section 36 to a pending challenge to an arbitral award filed under Section 34 of the Act. Under the amended Section 36, a party cannot obtain an automatic stay of an arbitral award (and may be required to deposit security for the amount in dispute), whilst the challenge to the award was pending in Court. The issue before the SC was whether amended Section 36 would apply to a Section 34 challenge proceeding, which was filed before the Commencement Date

The SC held that the amendment is prospective in nature, and will apply to those arbitral proceedings commencing, on or after the Commencement Date. However, only the amended Section 36 will be applicable to Section 34 applications filed both before and after the Commencement Date even if the arbitral proceedings were initiated prior to such date.

The SC has interestingly also opined on the proposed Section 87 of the Arbitration and Conciliation (Amendment) Bill, 2018 (‘Bill’), approved by the Cabinet of Ministers on March 7, 2018, which stipulates that the amendment introduced in 2015 does not apply to Court proceedings arising out of or in relation to arbitral proceedings which commenced prior to the Commencement Date, irrespective of whether such Court proceedings commenced prior to or after the Commencement Date. In fact, the SC has observed that the proposed Section 87 would defeat the specific purpose of the amendment.

[1]     2018 SCC Online SC 232.

 

Published In:Inter Alia - Quarterly Edition - March 2018 [ English Chinese japanese ]
Date: March 1, 2018