SUPREME COURT NULLIFY SECTION 87 OF THE ARBITRATION AND THE CONCILIATION ACT IN THE AMENDMENT OF 2019.
The oldest judicial system in India is the Indian Judiciary which has played a vital role in the resolution of disputes of the people of the nation. But for now, everyone is aware of the fact that the Indian judiciary has been inefficient in its performance as it is unable to deal effectively with all the pending cases which have been logged a long back. The Indian Judiciary is clogged with long unsettled cases. The Indian Judiciary has worked towards this issue by the settlement of the fast track courts but still, the number of pending cases is piling up and have been unsettled for a long time. In order to overcome this situation, an alternative dispute resolution mechanism is the best way to resolve disputes peacefully and efficiently, and the result of which is mutually accepted by both parties.
The bench containing Supreme Court Justices Rohinton F Nariman, Surya Kant, and V. Ramasubramanian strikes down the section 87 of the Arbitration and Conciliation Act, 1996 (Act) asserting that the arrangement is "plainly self-assertive" and violates the Article 14 of the Constitution of India in the ongoing judgment of Hindustan Construction Company Ltd. V. Association of India.
The section looked to invalidate the impact of the 2018 judgment of the Supreme Court in BCCI v Kochi Cricket Private Ltd case which chose the imminent use of automatic stay proviso in the Act. For this situation, the Supreme Court had chosen with respect to whether the 2015 amendments made to Section 36 of the Act were of retrospective application or prospective application.
Section 87 was introduced to the Arbitration and Conciliation Act, 1996 when it was passed by the parliament, and the amendment to the act was made in 2019. In the case of Kochi Cricket Pvt. Ltd. The apex court held that the amendment of 2015 to the section 36 will be applicable to those situations only where the arbitral proceedings have started on or after October 23, 2015, which is the date when the amendment of 2015 came into force. Or if any other proceedings have been filed related to the arbitration either on or after the date of 23 October 2015, even if the proceedings have taken place before the amendment came into force that is an amendment of 2015.
The section 87 of the arbitration and conciliation Act, embedded by 2019 Amendment Act, expresses that the 2015 Amendment won't have any significant bearing to Court procedures emerging out of or according to arbitral procedures independent of whether such court procedures are initiated preceding or after the beginning of the Arbitration and Conciliation (Amendment) Act, 2015. To this degree, Section 87 is against the Kochi Cricket Pvt. Ltd. Judgment.
The fundamental conflict under the steady gaze of the Apex Court seat was Section 87 of the Act, which puts on programmed remain on every single arbitral honor where arbitral procedures started before October 23, 2015. The stay comes as a result when the arbitral honors are tested in a High Court under arrangements of the Arbitration Act. This prompted framework organizations such as Hindustan Construction Company Ltd. to test the arrangements in the Supreme Court.
Therefore, the Supreme court held and concluded by the stuck down of section 87 of the act which was included in the amendment of 2019 of the Arbitration and Conciliation Act.