Whether 𝐚𝐧 𝐀𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐨𝐫 𝐚𝐩𝐩𝐨𝐢𝐧𝐭𝐞𝐝 𝐛𝐞𝐟𝐨𝐫𝐞 𝐭𝐡𝐞 2015 𝐚𝐦𝐞𝐧𝐝𝐦𝐞𝐧𝐭 𝐀𝐜𝐭, 𝐛𝐞 𝐫𝐞𝐦𝐨𝐯𝐞𝐝 𝐛𝐲 𝐂𝐨𝐮𝐫𝐭 𝐢𝐧𝐭𝐞𝐫𝐯𝐞𝐧𝐭𝐢𝐨𝐧 𝐝𝐮𝐞 𝐭𝐨 𝐚 𝐬𝐮𝐛𝐬𝐞𝐪𝐮𝐞𝐧𝐭 𝐃𝐢𝐬𝐪𝐮𝐚𝐥𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐮𝐧𝐝𝐞𝐫 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 12(5)?

Ellora had filed Application under Section 14 read with Sections 11 and 15 of the Arbitration & Conciliation Act, 1996 seeking termination of mandate of the then constituted Arbitral Tribunal (AT) & to appoint a new arbitration, before the High Court of Madhya Pradesh. 

The said Application had been dismissed by the MP High Court, against which Ellora had preferred an Appeal before the Supreme Court. 

The main contention raised by Ellora was that the AT, being officers of the Respondent, had lost their mandate in view of Section 12(5) read with Seventh Schedule of the A&C Act.

The Court observed as below:

1. The AT was constituted in 2001, when the AT constituted of employees of Respondent. The employees have since retired also. However, since 2001 no other steps were taken in arbitration, and as such it can’t be said the proceedings had commenced. 

2. As such after the 2015 Amendment Act, with the effect of Section 12(5) read with Seventh Schedule, all of the members of the constituted AT become ineligible to continue as arbitrators. (Reliance placed on Jaipur Zila Dugdh Utpadak Sahkari Sangh Limited )

3. It cannot be said that merely because Ellora had participated in the arbitration proceedings before the AT, he could not have approached the High Court for fresh appointment of arbitrator. This is because the waiver of the disqualification under Section 12(5) has to be “expressly” and in writing, and cannot be implied by mere participation. (Reliance placed on Bharat Broadband Network Limited v. United Telecoms Limited, (2019) 5 SCC 755.

In view of the above, it was declared by the Supreme Court that the already constituted AT were ineligible to act as arbitrators, and accordingly, a fresh arbitrator was appointed to adjudicate the disputes between the parties. 

 In the Supreme Court of India

(Before M.R. Shah and B.V. Nagarathna, JJ.)

Ellora Paper Mills Limited Vs State of Madhya Pradesh 

Civil Appeal No. 7697 of 2021

Decided on January 4, 2022

Citation: 2022 SCC OnLine SC 8

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Whether amended S 36 of arbitration Act will be applicable to application U/S 34 on date of commencement of amendment Act?

In Narhari Shivram Shet Narvekar v. Pannalal
Umediram (1976) 3 SCC 203 at 207, this Court, following
Lalji Raja (supra), held as follows:
73“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 right could not be taken away
by the application of the Code of Civil
Procedure to Goa during the pendency of the
appeal before the Additional Judicial
Commissioner. It seems to us that the right of
the judgment debtor to pay up the decree
passed against him cannot be said to be a
vested right, nor can the question of
executability of the decree be regarded as a
substantive vested right of the judgment
debtor. A fortiori the execution proceedings
being purely a matter of procedure it is well
settled that any change in law which is made
during the pendency of the cause would be
deemed to be retroactive in operation and the
appellate court is bound to take notice of the
change in law.”
Since it is clear that execution of a decree pertains to the
realm of procedure, and that there is no substantive
vested right in a judgment debtor to resist execution,
Section 36, as substituted, would apply even to pending
Section 34 applications on the date of commencement of
the Amendment Act.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.2879-2880 OF 2018
(Arising out of SLP (C) Nos.19545-19546 of 2016)
BOARD OF CONTROL FOR CRICKET
IN INDIA 
V
KOCHI CRICKET PVT. LTD. AND ETC.
Dated: March 15, 2018.

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Whether award debtor should obtain stay to execution of award if arbitration proceeding commenced prior to coming in to force of Amendment Act 2015?

In State of Bombay (in both the appeals) v. 1. Supreme General Films Exchange Ltd. and 2. Arati Cotton Mills Ltd. reported in MANU/SC/0007/1960 : AIR 1960 SC 980 cited by Mr. Mitra. Mr. Justice Das pronouncing the judgment of the Supreme Court pronounced the dictum that interference with the right of appeal by inserting a new condition or a more onerous condition was not a matter of procedure only. It impaired or interfered with a substantive right. Such an enactment could not be retrospective unless expressly stated to be so.

23. In the case of Videocon International Ltd. v. Securities and Exchange Board of India reported in MANU/SC/0023/2015 : (2015) 4 SCC 33, also cited by Mr. Mitra, Mr. Justice Khehar after discussing a large number of authorities laid down the following propositions which included quotations from the authorities discussed by his lordship on the subject:

"26********* (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal, even though remedial, is substantive in nature.

(iii) Every litigant has a vested right in substantive law, but no such right exists in procedural law.

28.**********We are, therefore, of the view that where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act, such legislation is prospective in operation and does not affect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment. We are further of the view that there is a presumption against the retrospective operation of a statute and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, but an amending act which affects the procedure is presumed to be retrospective, unless amending act provides otherwise. We have carefully looked into the new substituted Section 15 brought in the parent Act by the Amendment Act, 1995 but do not find it either expressly or by necessary implication retrospective in operation which may affect the rights of the parties on the date of adjudication of suit and same is required to be taken into consideration by the appellate court."

24. Therefore, to put it shortly changing the forum of appeal or the location of the appellate court is a procedural matter. But a new Act or amending Act changing the right of appeal or the conditions under which an appeal can be filed deals with a substantive right of a person. A vested substantive right of this nature is usually not disturbed by a new or amending Act. If such a right is sought to be extinguished there has to be an express or implied provision. This court relying on numerous decisions has held in Saraf Agencies Pvt. Ltd. and Ors. v. Federal Agencies for State Property Management and Ors. that an application to set aside the award is to be treated like an appeal and that all substantive rights accrue at the time of commencement of arbitral proceedings.

25. By amendment of Section 36 of the Arbitration and Conciliation Act, a party challenging an award has to deposit with the registry of the court the awarded amount or secure it to the satisfaction of the court, as a condition precedent to obtain stay thereof, pending the setting aside application, which condition was absent prior to the amendment. This is certainly an alteration of the conditions under which such an application was heard prior to the amendment, when stay was automatic on filing of a valid setting aside application. Thus the substantive rights of an award debtor have been affected.

26. The Special bench judgment of our court in the case of Union of India v. Amitava Paul along with the connected matter reported in MANU/WB/0371/2015 : AIR 2015 89 (FB) has only held that Order 41 Rule 1(3) was directory in nature. It made no comment as to whether the provision was to be taken as procedural or substantive law.

27. I do note that this court's view in Saraf Agencies Pvt. Ltd. and Ors. v. Federal Agencies for State Property Management and Ors. has been endorsed in the later case of Braithwaite Burn & Jessop Construction Co. Ltd. v. Indo Wagon Engineering Ltd. by Mr. Justice Soumen Sen.

28. Hence, the law prevailing at the time of commencement of the arbitration will apply till the disposal of the setting aside application at the highest level. The amending Act of 2015 did not alter any vested substantive right. Therefore, the right of the petitioner in arbitration which commenced before the coming into force of the amending Act, to challenge the award without any condition is preserved by the amendment Act.

IN THE HIGH COURT OF CALCUTTA

G.A. No. 3750 of 2015 and A.P. No. 1709 of 2015

Decided On: 17.07.2017

 West Bengal Power Development Corporation Ltd. Vs. Dongfang Electric Corporation

Hon'ble Judges/Coram:

I.P. Mukerji, J.

Citation: AIR 2017 Cal 297

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Whether requirement to make application for stay and furnishing security provided under Arbitration amendment Act 2015 is retrospective in nature?

In such a situation, it would have to be considered, independent of Section 26 of the Amending Act, as to whether the amended provisions applied to the said second and third category of cases. In this regard, we may note the observations of the Supreme Court in Thyssen (supra) where, after, considering several earlier decisions, the Supreme Court observed in paragraph 32 (which we have already extracted above) that the principles enunciated in the judgments show as to when a right accrues to a party under a repealed Act. The Supreme Court observed that it is not necessary that for the right to accrue, legal proceedings must be pending when the new Act comes into force. Furthermore, and more importantly, the Supreme Court observed that to have the award enforced when arbitral proceedings commenced under the old Act under that very Act was certainly an accrued right. In other words, all the aspects of enforceability of an award entail an accrued right both in the person in whose favour the award is made and against whom the award is pronounced. It will also be noticed that the Supreme Court made it clear that for the right to accrue, there is no necessity that legal proceedings must be pending when the new Act comes into force. This exactly covers the situation as obtaining in the second category of cases, where the arbitral proceedings were commenced prior to 23.10.2015 and the award was also made prior to 23.10.2015, but the petition under Section 34 had not yet been filed. This is the same situation as in the present case. Thus, the pendency of any legal proceedings or otherwise would not come in the way of determining as to whether the right had accrued under the unamended provisions or not. We have already noted that the Supreme Court in Thyssen (supra) observed that the right to have the award enforced (which also comprises of the negative right of the award debtor to not have it enforced till his objections under Section 34 of the said Act are heard and decided) is certainly an accrued right. Given the fact that the amended Section 36 takes away the right of an automatic stay of enforcement of an award, it is clear that the amendment introduced in Section 36 by virtue of the Amending Act would definitely impinge upon the accrued right of the party against whom the award is given after the arbitral proceedings have been held under the unamended provisions. Since an accrued right is affected, unless a contrary intention appears in the amending statute, the amendments would have to be treated as prospective in operation. Prospective from the standpoint of commencement of the arbitral proceedings.

IN THE HIGH COURT OF CALCUTTA

E.C. No. 1 of 2017

Decided On: 28.06.2017

 Braithwaite Burn & Jessop Construction Co. Ltd. Vs.  Indo Wagon Engineering Ltd.

Hon'ble Judges/Coram:

Soumen Sen, J.

Citation: AIR 2017(NOC) 923 Cal

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Whether Order refusing to refer a matter to arbitration by National Consumer Commission can challenged only before supreme court?

 The remedy of appeal was provided in Section 37(1) till 2015 Amendment against orders of a court with reference to the jurisdiction conferred on the “court” (as defined in Section 2) for “interim measures” (under Section 9) or to consider “setting aside an arbitral award” (under Section 34) only. The law then did not conceive of appeal against order making or refusing a reference to arbitration (under Section 8). This is why the provision in Section 37(1) prior to its amendment was not concerned with act of any forum except a “court”. After 2015 amendment, when the reference or refusal to make over to arbitration has been additionally made subject to appeal, the words “the court passing the order” appearing in Section 37(1) acquire new dimension and need to be properly construed so as to harmonise them with Section 8 which confers the jurisdiction to pass the order that may be challenged in appeal. Since Section 8 does not restrict such a power to a “court” but extends it to every “judicial authority”, the forum conceived by the expression “the court passing the order” under the amended law - Section 37(1)(a) - has to be read contextually and understood to connote “the judicial authority” which passed the order making or refusing the reference. The reference to “original decrees” in the opinion of this court, is meant to convey a decision taken by a court of first instance in exercise of its original jurisdiction.

14. If construed as above, the appeal against the order of NCDRC (making or) refusing the reference of the dispute to arbitration cannot be brought before this court since appeals against orders of said forum lie before the Supreme Court. NCDRC is a tribunal and not a court. This court is not authorised by the law to hear appeals from the orders passed by NCDRC in exercise of its original jurisdiction. By virtue of Section 23 of the Consumer Protection Act, 1986, such appeal is available under the said law, as noted earlier, only before the Supreme Court. Therefore, the words “the court authorised by law to hear appeals” in present cases essentially mean “the Supreme Court”.

15. For the foregoing reasons, this court holds that these appeals under Section 37(1) of the Arbitration and Conciliation Act, 1996 have been wrongly brought before this court. The same, therefore, cannot be entertained here and are consequently hereby returned to be presented before the appropriate appellate court.

In the High Court of Delhi at New Delhi

(Before R.K. Gauba, J.)

FAO 395/2017 & CM No. 37063-37064/2017

Emaar MGF Land Ltd. & Anr. v. Aftab Singh 

Decided on November 7, 2017.

Citation:2017 SCC OnLine Del 11437

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What is role of court after amendment in arbitration Act in 2015?

The scope of the power under Section 11 (6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. (supra) and Boghara Polyfab (supra). This position continued till the amendment brought about in 2015. After the amendment, all that the Courts need to see is whether an arbitration agreement exists - nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Court’s intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6A) ought to be respected.
Reportable

Supreme Court - Daily Orders

M/S Duro Felguera S.A vs M/S. Gangavaram Port Limited on 10 October, 2017

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Whether parties have right to determine fees of arbitrator?

11. The amended Section 31(8) has done away with the expression “Unless otherwise agreed by the parties…….” and reads as under:—

“(8) The costs of an arbitration shall be fixed by the arbitral tribunal in accordance with section 31A.”

12. Section 31(8) of the Act does not stipulate that the agreement of the parties shall have an overriding effect. The effect of the amendment and specific deletion of the expression “Unless otherwise agreed by the parties…..” shows that the legislative intent that the power of the parties to enter into an agreement with regard to fixing of the fees has been specifically taken away.

13. The regime as contemplated by Section 31(8) read with Section 31(A) of the Act now holds the field.

14. Section 11(14) of the Act empowers the High Court to frame rules for determination of fee of the arbitral tribunal and refers to as a guidance to the rates specified in Schedule IV of the Act. The explanation to Section 11(14) carves out an exception with regard to international commercial arbitration and arbitrations (other than international commercial arbitrations) where parties have agreed for determination of fees as per the rules of an arbitration institution.

15. The above clearly shows that the right of the parties to enter into an agreement with regard to determination of fee for the arbitral tribunal has been restricted to international commercial arbitrations and arbitrations (other than international commercial arbitrations) where parties have agreed for determination of fees as per the rules of an arbitration institution.

16. Thus the contention of learned senior counsel for the petitioner, that the petitioner's nominee arbitrator has consented to the fee schedule stipulated by the Policy Circular is also of no consequence.

In the High Court of Delhi at New Delhi

(Before Sanjeev Sachdeva, J.)

National Highways Authority of India v. Gayatri Jhansi Roadways Limited .

ARB.A. 1/2017 and I.A. Nos. 8086/2017 (stay) & 9441/2017 (for waiver of cost)

Decided on September 11, 2017

Citation:2017 SCC OnLine Del 10285

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Whether party will have to obtain stay order in proceeding U/S 34 of arbitration after coming in to force of amendment Act 2015?

 I find that, the two decisions cited by Mr. Khambhata are
perfectly applicable to the facts of the case on hand. The remedy
available to an aggrieved award-debtor is under Section 34 of the
Arbitration Act. This remedy has not been taken away by the
Amending Act. A vested right available to the award-debtor would be
only in the matter of challenge to the arbitral award which has
remained intact. Section 36 of the Arbitration Act pertains only to the
enforcement of an award and its executability. The original Section
34, imposed a disability on the award-holder in executing the award
during pendency of the challenge to the award. This disability
provided only an interim relief against execution of the award to the
award-debtor, until his challenge to the award was decided. The right
to interim relief cannot be a vested or accrued substantive right. In
any case, even this interim advantage is not completely taken away.
The disability imposed on the award-holder under original Section 36
was absolute. The award was simply not executable during pendency
of the challenge to it. Under the amended Section 36, this disability
has been only made relative. Firstly, what was available earlier on a

platter has to be now asked for. Secondly, grant of it can be
conditional.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

CHAMBER SUMMONS NO.1530 OF 2015
IN
EXECUTION APPLICATION (L) NO.2481 OF 2015
IN
ARBITRAL AWARD DATED 22ND JUNE, 2015

In the matter between :
M/s Rendezvous Sports World …. Original
Applicant
Vs.
The Board of Control for Cricket .... Respondent
in India

Coram : Smt. R.P. SondurBaldota, J.
Date : 14th June, 2016.

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A brief about Arbitration Act Amendment 2015

SUBMITTED BY : A.  Mohammed Ibrahim. FICA

Certified Arbitrator

The Arbitration  and  Conciliation Act 1996

The Arbitration and Conciliation Act, 1996 (The AC ACT 1996 = The Act) enacted in 1996 is an Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards. The Act is based on the Model Law adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1985. The objects and basis of the said Act is to speedy disposal with least court intervention. Some of the objects, as mentioned in the Statement of Objects and Reasons for the Arbitration and Conciliation Bill, 1995 are as follows:

(a) To comprehensively cover international commercial arbitration and conciliation as also domestic arbitration and conciliation;

(b)To minimise the supervisory role of courts in the arbitral process;

(c) To provide that every final arbitral award is enforced in the same manner as if it were a decree of court.

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