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The Supreme Court in BCCI ruled that the Arbitration and Conciliation Amendment Act of 2015 was generally applied prospectively. However, so far as Section 36 was concerned the Amendment dealt slightly different with it. Prior to the 2015 amendment, Section 36 of the Act contained that if there was a delay in making any application challenging an award or if a challenging application had been made and refused, the award could be enforced, and this implied an automatic stay against enforcement. The automatic stay was taken away by the 2015 Amendments in which it stated that under Section 34, the mere filing of a challenge application against the award will only be rendered unenforceable when the court grants a stay against enforcement on a separate application being made.

The Supreme Court stated that the issue of stay on enforcement isn’t a substantive matter but rather a procedural matter. It was also said that the 2015

Amendments applied to Section 36, and they applied retrospectively, which meant that it applied to all court proceedings related to arbitral proceedings that have been filed after or pending on October 23, 2015, the date on which the Amendments came into force, whether those arbitral proceedings were commenced before or after October 23, 2015. A copy of the judgment was also asked by the Supreme Court in order to send it to the Law Ministry and the Attorney General so that they could view the purpose of the 2015 Amendments which focused on reducing the delay and interference of the court in arbitration.

In 2018, the Amendments that were proposed got lapsed but finally, on 9th August 2019, the Arbitration and Conciliation Amendment Act, 2019 received the President’s assent. However, they would come in force only upon the notification of the Official Gazette.

The 2019 Amendment added a new Section 87 that deletes Section 26 of the 2015 Amendments, and it provides that unless parties agree otherwise the 2015 Amendments would not apply to arbitral proceedings which had commenced prior to October 23, 2015, and any court proceedings arising out of them. The 2015 Amendments then would apply to arbitral proceedings which commenced on or after October 23, 2015, and apply the same to the related court proceedings, so that the focal point could shift to the date from which the arbitral proceedings began to commence.

Section 87 clearly and certainly notes that it is one date and one action, which means that it is the date of commencement of the arbitration, which is of consequence in determining whether the pre-amendment or post-amendment regime would apply. However, there still is room for confusion even though the ambiguity may have disappeared for pending proceedings in which no orders have been passed, or any proceedings filed. Apart from the issue of the dates Section 87 happens to begin with the word “unless” which means that the parties may agree to apply the amendments to arbitral and court proceedings that commenced before October 23, 2015. Therefore, the possibility of the need for further clarification and further litigation is almost certain.

Even though the Legislature has realized the problems that had risen out of the 2015 Amendments and had acknowledged the need to provide clarity, it did not foresee that similar issues may arise out of the 2019 Amendments. It hasn’t been specified or notified if the amendments would apply to fresh fillings or the pending arbitral or court proceedings or both.

We have to wait and watch how things turn out for 2019 Amendments while it comes to force.

  • Arbitral and Court proceedings
  • Section 87
  • Clarity and certainity

BY : Prina Sharma

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