BOARD OF CONTROL FOR CRICKET IN INDIA versus KOCHI CRICKET PVT. LTD. AND ETC.

[2018] 2 S.C.R. 829

BOARD OF CONTROL FOR CRICKET IN INDIA

KOCHI CRICKET PVT. LTD. AND ETC.

(Civil Appeal Nos.2879-2880 of 2018)

MARCH 15, 2018

[R. F. NARIMAN AND NAVIN SINHA, JJ.]

Arbitration and Conciliation (Amendment) Act, 2015: s. 26 –Construction of – Application of s. 36 (substituted by the AmendmentAct), in its amended form or its original form to s.34 applicationsfor setting aside the arbitral award, filed prior to commencement ofthe Amendment Act – On facts, passing of arbitral award –Application u/s.34 challenging the arbitral award, filed prior tocoming into force of the Amendment Act and few after the AmendmentAct came into force – Execution applications by the award creditor– Dismissal of execution applications sought by award debtor statingthat old s.36 would be applicable, thus, there would be automaticstay to the execution of the awards until s.34 proceedings had beendecided – However, the Single Judge of the High Court held thatthe amended s.36 would be applicable and execution of an awardwould be as if it were decree, there would be no automatic stayand ordered execution – On appeal, held: Scheme of s.26 is clearthat the Amendment Act is to be applied only prospectively witheffect from the date of its commencement, and only to arbitralproceedings and to court proceedings in relation thereto, whichhave commenced on or after the commencement of the AmendmentAct – Further, s. 36 being procedural provision, the context of theSection is that the expression “has been” would refer to s.34 petitionsfiled before the commencement of the Amendment Act and indicatesthat the said Section would apply, in its substituted form, even tosuch petitions – Thus, s.36 as amended should apply to s.34applications filed before the commencement of the Amendment Act– Arbitration and Conciliation Act, 1996 – ss. 36 and 34.

Dismissing the appeals, the Court

HELD: 1.1 The scheme of Section 26 of the Arbitrationand Conciliation (Amendment) Act, 2015 is clear: that theAmendment Act is prospective in nature, and will apply to thosearbitral proceedings that are commenced, as understood by

[2018] 2 S.C.R.

ASection 21 of the principal Act, on or after the Amendment Act,and to Court proceedings which have commenced on or after theAmendment Act came into force. [Para 25] [859-C-D]

1.2 On reading of Section 26, it is found that the provisionis in two parts. The first part refers to the Amendment Act notBapplying to certain proceedings, whereas the second partaffirmatively applies the Amendment Act to certain proceedings.The two parts are separated by the word ‘but’, which also showsthat the two parts are separate and distinct. It cannot be said thatthe expression “but” means only that there is an emphaticrepetition of the first part of Section 26 in the second part of theCsaid Section. The context of the word “but” in Section 26 cannotbear the aforesaid meaning, but serves only to separate the twodistinct parts of Section 26. What will be noticed from the firstpart, which states, “Nothing contained in this Act shall apply tothe arbitral proceedings commenced, in accordance with theDprovisions of section 21 of the principal Act, before thecommencement of this Act unless the parties otherwise agree…”is that: (1) “the arbitral proceedings” and their commencementis mentioned in the context of Section 21 of the principal Act; (2)the expression used is “to” and not “in relation to”; and (3) partiesmay otherwise agree. So far as the second part of Section 26 isEconcerned, namely, the part which reads, “…but this Act shallapply in relation to arbitral proceedings commenced on or afterthe date of commencement of this Act” makes it clear that theexpression “in relation to” is used; and the expression “the”arbitral proceedings and “in accordance with the provisions ofFSection 21 of the principal Act” is conspicuous by its absence.The expression “the arbitral proceedings” refers to proceedingsbefore an arbitral tribunal. These proceedings alone are referredto, the expression “to” as contrasted with the expression “inrelation to” making this clear. Also, the reference to Section 21

of the 1996 Act, which appears in Chapter V, and which speaks ofGthe arbitral proceedings commencing on the date on which arequest for dispute to be referred to arbitration is received bythe respondent, would also make it clear that it is theseproceedings, and no others, that form the subject matter of thefirst part of Section 26. Also, since the conduct of arbitralHproceedings is largely procedural in nature, parties may

“otherwise agree” and apply the Amendment Act to arbitralproceedings that have commenced before the Amendment Actcame into force. In stark contrast to the first part of Section 26 isthe second part, where the Amendment Act is made applicable“in relation to” arbitral proceedings which commenced on or afterthe date of commencement of the Amendment Act. What isconspicuous by its absence in the second part is any reference toSection 21 of the 1996 Act. Whereas the first part refers only toarbitral proceedings before an arbitral tribunal, the second partrefers to Court proceedings “in relation to” arbitral proceedings,and it is the commencement of these Court proceedings that isreferred to in the second part of Section 26, as the words “inrelation to the arbitral proceedings” in the second part are notcontrolled by the application of Section 21 of the 1996 Act. Section26, therefore, bifurcates proceedings, with great degree of clarity,into two sets of proceedings – arbitral proceedings themselves,and Court proceedings in relation thereto. The reason why thefirst part of Section 26 is couched in negative form is only tostate that the Amendment Act will apply even to arbitralproceedings commenced before the amendment if partiesotherwise agree. If the first part of Section 26 were couched inpositive language (like the second part), it would have beennecessary to add proviso stating that the Amendment Act wouldapply even to arbitral proceedings commenced before theamendment if the parties agree. In either case, the intention ofthe legislature remains the same, the negative form conveyingexactly what could have been stated positively, with the necessaryproviso. Obviously, “arbitral proceedings” having been subsumedin the first part cannot re-appear in the second part, and theexpression “in relation to arbitral proceedings” would, therefore,apply only to Court proceedings which relate to the arbitralproceedings.[Paras 23-25][856-H; 857-A-H; 858-A-E; 589-A-C]

1.3 When the first part of Section 26 makes it clear thatarbitral proceedings commenced before the Amendment Actwould not be governed by the Amendment Act, it is clear thatarbitral proceedings that have commenced after the AmendmentAct comes into force would be so governed by it. The negativeform of the language of the first part only becomes necessary toindicate that parties may otherwise agree to apply the Amendment

AAct to arbitral proceedings commenced even before theAmendment Act comes into force. The absence of any referenceto Section 21 of the 1996 Act in the second part of Section 26 ofthe Amendment Act is also good reason as to why arbitralproceedings before an arbitral tribunal are not contemplated inthe second part. It cannot be said that Section 26 manifests aBclear intention to destroy all rights, vested or otherwise, whichhave accrued under the unamended 1996 Act. It is clear that theintendment of Section 26 is to apply the Amendment Actprospectively, with effect from the date of its commencement, toarbitral proceedings and to court proceedings in relation thereto.C[Paras 32-34] [866-C-D, E-F, H]1.4 From reading of Section 26 as interpreted, it becomesclear that in all cases where the Section 34 petition is filed afterthe commencement of the Amendment Act, and an applicationfor stay having been made under Section 36 therein, will beDgoverned by Section 34 as amended and Section 36 as substituted.But, what is to happen to Section 34 petitions that have beenfiled before the commencement of the Amendment Act, whichwere governed by Section 36 of the old Act? Would Section 36,as substituted, apply to such petitions? To answer this question,it is to be decided on what is meant by “enforcement” in SectionE36. On the one hand, it has been argued that “enforcement” isnothing but “execution”, and on the other hand, it has beenargued that “enforcement” and “execution” are differentconcepts, “enforcement” being substantive and “execution”being procedural in nature. [Para 39] [871-A-C]F

1.5 An arbitral proceeding commences under Section 21,unless otherwise agreed by parties, when dispute arisesbetween the parties for which request for the dispute to bereferred to arbitration is received by the respondent. The arbitralproceedings terminate under Section 32(1) by the delivery of aGfinal arbitral award or by the circumstances mentioned in Section32(2). The mandate of the arbitral tribunal terminates with thetermination of arbitral proceedings, save and except for correctionand interpretation of the award within the bounds of Section 33,or the making of an additional arbitral award as to claims presentedin the proceedings, but omitted from the award. Once this is over,Hin cases where an arbitral award is delivered, such award shall be

final and binding on the parties and persons claiming under them,under Section 35 of the 1996 Act. Under Section 36, both pre andpost amendment, such award shall be “enforced” in accordancewith the provisions of the Code of Civil Procedure, 1908, in thesame manner as if it were decree of the Court. It is clear thatthe scheme of the 1996 Act is materially different from the schemeof the 1940 Act. Under Section 17 of the 1940 Act, once an awardwas delivered, the Court had to pronounce judgment in accordancewith the award, following which decree would be drawn up, whichwould then be executable under the Code of Civil Procedure.Under Section 36 of the 1996 Act, the Court does not have todeliver judgment in terms of the award, which is then followed bya decree, which is the formal expression of the adjudicationbetween the parties. Under Section 36 of the 1996 Act, the awardis deemed to be decree and shall be enforced under the CPCas such. Further, it is clear that Section 36 refers to the executionof an award as if it were decree, attracting the provisions ofOrder XXI and Order LXI, Rule 5 CPC and would, therefore, bea provision dealing with the execution of arbitral awards. Since itis clear that execution of decree pertains to the realm ofprocedure, and that there is no substantive vested right in ajudgment debtor to resist execution, Section 36, as substituted,would apply even to pending Section 34 applications on the dateof commencement of the Amendment Act. [Para 40-42] [871-D-H; 872-A-C; 874-F-G]

1.6 Section 36, prior to the Amendment Act, is only clogon the right of the decree holder, who cannot execute the awardin his favour, unless the conditions of this section are met. Thisdoes not mean that there is corresponding right in the judgmentdebtor to stay the execution of such an award. It has been heldthat Section 26 does specifically provide that the courtproceedings in relation to arbitral proceedings, being independentfrom arbitral proceedings would not be viewed as continuationof arbitral proceedings but would be viewed separately. [Para 43][874-H; 875-A, D]

1.7 Being procedural provision, it is obvious that thecontext of Section 36 is that the expression “has been” wouldrefer to Section 34 petitions filed before the commencement ofthe Amendment Act and would be one pointer to the fact that the

Asaid section would indeed apply, in its substituted form, even tosuch petitions. The unamended Section 36 granted an automaticstay (which could last for number of years) on execution of anaward before the enforcement process of Section 34 was overwithout having to look at the facts of each case. Due to the sheerunfairness of this, Section 36 as amended should apply toBSection 34 applications filed before the commencement of theamendment Act. [Paras 45-46] [877-E-F; 879-E]

1.8 In the instant case, it is clear that “enforcement” inSection 36 is to treat the award as if it were decree and enforceit as such under the Code of Civil Procedure, which would onlyCmean that such decree has to be executed in the manner indicated.Also, stray sentence in judgment in particular context cannot betorn out of such context and applied in situation where it has beenargued that enforcement and execution are one and the same, atleast for the purpose of the 1996 Act. [Para 48] [880-B-C]

D1.9 Since the Amendment Act is only prospective inapplication, no anomalies can possibly arise. The choosing ofSection 21 as being the date on which the Amendment Act wouldapply to arbitral proceedings that have been commenced couldequally be stated to give rise to various anomalies. One suchEanomaly could be that the arbitration agreement itself may havebeen entered into years earlier, and disputes between the partiescould have arisen many years after the said arbitration agreement.The argument on behalf of the appellants is that parties are entitledto proceed on the basis of the law as it exists on the date onwhich they entered into an agreement to refer disputes toFarbitration. If this were to be the case, the starting point of theapplication of the Amendment Act being only when notice toarbitrate has been received by the respondent, which could bemany years after the arbitration agreement has been entered into,would itself give rise to the anomaly that the amended law wouldGapply even to arbitration proceedings years afterwards as andwhen dispute arises and notice to arbitrate has been issuedunder Section 21. In such case, the parties, having entered intoan arbitration agreement years earlier, could well turn aroundand say that they never bargained for the change in law that hastaken place many years after, and which change would apply toHthem, since the notice, referred to in Section 21, has been issued

after the Amendment Act has come into force. Cut off dates, bytheir very nature, are bound to lead to certain anomalies, butthat does not mean that the process of interpretation must be sotwisted as to negate both the plain language as well as the objectof the amending statute. On this ground also, it cannot be seenhow an emotive argument could be converted into legal one, soas to interpret Section 26 in manner that would be contrary toboth its plain language and object. [Para 55] [885-C-H; 886-A]

1.10 The Government will be well-advised in keeping theStatement of Objects and Reasons in the forefront, if it proposesto enact Section 87 on the lines indicated in the Government’spress release dated 7[th] March, 2018. The immediate effect of theproposed Section 87 would be to put all the important amendmentsmade by the Amendment Act on back-burner, such as theimportant amendments made to Sections 28 and 34 in particular,which, as has been stated by the Statement of Objects andReasons, “…have resulted in delay of disposal of arbitrationproceedings and increase in interference of courts in arbitrationmatters, which tend to defeat the object of the Act”, and will nownot be applicable to Section 34 petitions filed after 23[rd] October,2015, but will be applicable to Section 34 petitions filed in caseswhere arbitration proceedings have themselves commenced onlyafter 23[rd] October, 2015. This would mean that in all matters whichare in the pipeline, despite the fact that Section 34 proceedingshave been initiated only after 23[rd] October, 2015, yet, the old lawwould continue to apply resulting in delay of disposal of arbitrationproceedings by increased interference of courts, which ultimatelydefeats the object of the 1996 Act. The 246[th] Law CommissionReport has itself bifurcated proceedings into two parts, so thatthe Amendment Act can apply to Court proceedings commencedon or after 23[rd] October, 2015. It is this basic scheme which isadhered to by Section 26 of the Amendment Act, which ought notto be displaced as the very object of the enactment of theAmendment Act would otherwise be defeated.[Para 57] [888-D-G; 889-A]

1.11 The Counsel for BCCI in SLP(C) No. 8374-75 of 2017and 8376-78 of 2017 submitted that the impugned judgment, whenit dealt with the majority award in favour of respondent wentbehind the award in ordering execution of portion of the award

836SUPREME COURT REPORTS

Ain favour of respondent, when the majority award specificallyordered the 2[nd] and 3[rd] defendants to pay to the joint venturecompany, sum of Rs.6,77,24,56,570/-. It is only thereafter thatthe tribunal awarded the said amount. It is thus the submissionthat it is the decree holder alone who can execute such decree inits favour, and that in the instant case it is WWIL who is theBdecree holder and that, therefore, respondent’s ChamberSummons, to execute this portion of the award, is contrary to theCPC as well as number of judgments construing the Code. Onthe other hand, the submission of the other side is that the 2[nd]and 3[rd] defendants in the arbitration proceedings, are in controlCand management of WWIL, and have wrongfully excludedrespondent from such control and management. WWIL, therefore,will never put this decree into execution. This being so, theinterest of justice requires that the High Court judgment shouldnot be interfered as there is no person that would be in position

to enforce the award apart from the respondent. [Paras 58-60]D889-B-C; 890-C, E-G]

1.12 Even though the High Court may not be strictly correctin its appreciation of the law, yet it has attempted to do justice onthe facts of the case. It is not appropriate, in the interest of justice,to interfere with the impugned judgment on this count. [Para 61]E[890-H; 891-D]

Milkfood Ltd. v. GMC Ice Cream Pvt. Ltd. (2004) 7 SCC288 : [2004] 3 SCR 854; Thyssen Stahlunion v. SteelAuthority of India (1999) 9 SCC 334 : [1999] 3 Suppl. SCR 461; N.S. Nayak & Sons v. State of Goa (2003) 6FSCC 56 : [2003] 1 Suppl. SCR 69 – distinguished.Garikapati Veeraya v. N. Subbiah Choudhry [1957] SCR488; National Aluminium Co. Ltd. v. Pressteel &Fabrications (P) Ltd. (2004) 1 SCC 540; ONGC v. SawPipes Ltd (2003) 5 SCC 705 : [2003] 3 SCR 691; ONGCGLtd. v. Western Geco International Ltd. (2014) 9 SCC263 : [2014] 12 SCR 1; Satish Kumar v. Surinder Kumar[1969] 2 SCR 244; Bhagat Ram Sharma v. Union ofIndia (1988) (Supp) SCC 30 : [1988] SCR 1034;Hitendra Vishnu Thakur v. State of Maharashtra (1994)4 SCC 602 : [1994] 1 Suppl. SCR 360; Transport andH

Dock Workers’ Union & others v. New Dholera SteamshipLtd., Bombay and others, (1967) 1 LLJ 434; KalawatiDevi Harlalka v. CIT (1967) 3 SCR 833; State of Punjabv. Mohar Singh, [1955] 1 SCR 893; T.S. Baliah v. T.S.Rengachari [1969] 3 SCR 65; Lalji Raja and Sons v.Hansraj Nathuram, (1971) 1 SCC 721 : [1971] 3 SCR815; Narhari Shivram Shet Narvekar v. PannalalUmediram (1976) 3 SCC 203: [1976] 3 SCR 149; Unionof India v. A.L. Rallia Ram [1964] 3 SCR 164; NBCCLtd. v. J.G. Engineering (P) Ltd., (2010) 2 SCC 385 :[2010] 1 SCR 109; Snehadeep Structures (P) Ltd. v.Maharashtra Small-Scale Industries Development Corpn.Ltd., (2010) 3 SCC 34 : [2010] 1 SCR 76; State ofBombay v. Vishnu Ramchandra (1961) 2 SCR 26;Workmen v. Firestone Tyre & Rubber Co. of India (P)Ltd. (1973) 1 SCC 813 : [1973] 3 SCR 587; HameedJoharan v. Abdul Salam, (2001) 7 SCC 573: [2001] 1Suppl. SCR 469; Regional Manager & Anr. v. PawanKumar Dubey [1976] 3 SCR 540; Akkayanaicker v.A.A.A. Kotchadainaidu and Anr. (2004) 12 SCC 469:[2004] 4 Suppl. SCR 638; R. Rajagopal Reddy v. PadminiChandrasekharan (1995) 2 SCC 630 : [1995] 1 SCR715; Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.(2001) 6 SCC 356 : [2001] 3 SCR 479; Sedco ForexInternational Drill. Inc. v. CIT (2005) 12 SCC 717 :[2005] 5 Suppl. SCR 302; Bank of Baroda v. AnitaNandrajog (2009) 9 SCC 462; ONGC v. Western GecoInternational Ltd. (2014) 9 SCC 263 : [2014] 12 SCR1;HRD Corporation (Marcus Oil and Chemical Division)v. Gail (India) Limited (Formerly Gas Authority of IndiaLtd.) 2017 SCC Online 1024 – referred to.

Minister of Public Works of the Government of the Stateof Kuwait v. Sir Frederick Snow and Partners (1984) 2WLR 340; L’Office Cherifien Des Phosphates andanother v. Yamashita-Shinnihon Steamship Co. Ltd.(1994) 1 AC 486 – referred to.

[1999] 3 Suppl. SCR 461distinguishedPara 7

838SUPREME COURT REPORTS

[2018] 2 S.C.R.

(2009) 9 SCC 462referred toPara 54[2014] 12 SCR 1referred toPara 54

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2879-2880 of 2018

From the Judgment and Order dated 14.06.2016 in ChamberSummons No. 1532 of 2015 in Execution Application (L) No. 2482 of2015 in Arbitral Award dated 22.06.2015 and Chamber Summons No.1530 of 2015 in Execution Application (L) No. 2481 of 2015 in ArbitralAward dated 22.06.2015 of the High Court of Judicature at Bombay.

WITH

C.A. NOS. 2881, 2882, 2883-2884, 2885-2886, 2887-2889, 2890-2891 and 2892 of 2018.

Tushar Mehta, ASG, C.A. Sundaram, K.V. Viswanathan, P.Chidambaram, Kapil Sibal, Dr. Abhishek Manu Singhvi, Arun Varma,Ms. Vibha Dutta Makhija, Neeraj Kishan Kaul, Sajan Poovayya, Sr.Advs., Ms. Gauri Rasgotra, Indranil Deshmukh, Aditya Mehta, GeorgeVarghese, Vineet Unnikrishnan, Ms. Nikitha Shenoy, Arjun Sreenivas,Ms. Purnima Krishna, Mrs. Bihu Sharma, Abhinav Mukerji, SiddhantBuxy, Ms. Rohini Musa, Avhishek Gupta, Zafar Inayat, Apoorv Tripathi,Kartik Yadav, Ms. Neha Sarna, Ms. Olga Lumepereira, Arjun Sreenivas,Ms. Sumita Sharma, M/s. Cyril Amarchand Mangaldas, Ravi Prakash,Ms. Bani Dikshit, Ms. Iti Agarwal (For M/s. D.S.K. Legal), JehangirJejeebhoy, Vivek A. Vashi, Ms. Kanika Sharma Goenka, HrushiNarvekar, Shaheda Madraswala, Utkarsh Srivastava, Mohd. NizamPasha, Ms. Aastha Dhawan, Ashish Joshi, Ali R. Osmani, Chirag M.Shroff, Mahesh Agarwal, Vivek Jain, Rishabh Parikh, Ms. Sumita Sharma,E. C. Agrawala, Bharat Sangal, Ms. Sanaya Dadacharji, Ms. VidushiGarg, Ms. Anindita Deka, Ms. Isha Gupta, Mitul Shelat, Mahesh Agarwal,Ms. Aastha Mehta, Rajesh Kumar, Rohit Bhat, Rajat Nair, M. K. Maroria,Nakul Dewan, Pradhuman Gohil, Mrs. Taruna Singh Gohil, Ashish Kabra,Ms. Neelu Mohan, Himanshu Choubey, Zain Maqbool, Ms. AbhishiktaMallick, Brijesh Kumar, Anirudh Krishnan, Balaji Srinivasan, KeerthikiranMurali, Ms. Sella Visalakshi, Ms. Goda Raghavan, Ms. VaishnaviSubrahmanyam, Hitesh Singhvi, Ms. Srishti Govil, Mayank Kshirsagar,Ms. Pratiksha Mishra, Abhishek Bharti, Sanjay Bansal, G. K. Bansal,D.N. Ray, Lokesh K. Choudhary, Ms. Disha Ray, Dilip Kumar Nayak,Mrs. Sumita Ray, Rajendra Barot, P. Rohan A. Rajadhyaksha, Ms. Tanvi

ADattani, Samar Kachwaha, Deepak Joshi, Ms. Liz Mathew, PriyadarshiBanerjee, Pratibhanu S. Kharola, Ranjeeta Rohtagi, Prateek Kumar,Ms. Anushka Sharda, Suksham Chauhan, Sanjeev K. Kapoor (For M/s.Khaitan & Co.), Braj Kishore Mishra, Mrs. Shally Bhasin, Ms. NehaSangwan, Advs. for the appearing parties.

BThe Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. Leave granted.

2. The present batch of appeals raises an important question as tothe construction of Section 26 of the Arbitration and Conciliation(Amendment) Act, 2015 (hereinafter referred to as the “AmendmentCAct”), which reads as follows:

“Section 26. Act not to apply to pending arbitralproceedings.

Nothing contained in this Act shall apply to the arbitralproceedings commenced, in accordance with the provisions ofDsection 21 of the principal Act, before the commencement ofthis Act unless the parties otherwise agree but this Act shallapply in relation to arbitral proceedings commenced on or afterthe date of commencement of this Act.”

3. The questions raised in these appeals require the mentioning ofEonly few important dates. In four of these appeals, namely, Board ofControl for Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors.(SLP(C) No. 19545-19546 of 2016), Arup Deb & Ors. v. Global AsiaVenture Company (SLP(C) No. 20224 of 2016), M/s MaharashtraAirports Development Company Ltd. v. M/s PBA InfrastructureLtd. (SLP(C) No.5021 of 2017) and UB Cotton Pvt. Ltd. v. JayshriFGinning and Spinning Pvt. Ltd. (SLP(C) No.33690 of 2017), Section34 applications under the Arbitration and Conciliation Act, 1996(hereinafter referred to as the “1996 Act”) were all filed prior to thecoming into force of the Amendment Act w.e.f. 23[rd] October, 2015. Inthe other four appeals, the Section 34 applications were filed after theGAmendment Act came into force. The question with which we areconfronted is as to whether Section 36, which was substituted by theAmendment Act, would apply in its amended form or in its original formto the appeals in question.

4. The relevant facts of the first appeal namely, Board of ControlHfor Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors. (SLP(C)

Nos. 19545-19546 of 2016), are as follows. notice dated 18[th] January,2012 was sent by Respondent No.1 invoking arbitration under franchiseagreement dated 12[th] March, 2011. Sole Arbitrator was appointed,who delivered two arbitral awards dated 22[nd] June, 2015 against theAppellant and in favour of the Respondents. On 16[th] September, 2015,the Appellants filed an application under Section 34 of the 1996 Act inthe Bombay High Court challenging the aforesaid arbitral awards. On26[th] November, 2015, the Respondents filed two execution applicationsin the High Court for payment of the amounts awarded under the twoawards, pending enforcement of such awards. These were resisted bytwo Chamber Summons filed by the Appellants dated 3[rd] December,2015, praying for dismissal of the aforesaid execution applications statingthat the old Section 36 would be applicable, and that, therefore, therewould be an automatic stay of the awards until the Section 34 proceedingshad been decided. The Chamber Summons were argued before alearned Single Judge, who, by the impugned judgment in Special LeavePetition (Civil) No.19545-19546 of 2016, dismissed the aforesaid ChamberSummons and found that the amended Section 36 would be applicable inthe facts of this case. This is how the appeal from the aforesaid judgmenthas come before us.5. As aforementioned, the skeletal dates necessary to decidethe present appeals in the other cases would only be that so far as twoof the other appeals are concerned, namely, Arup Deb & Ors. v. GlobalAsia Venture Company (SLP(C) No.20224 of 2016) and M/sMaharashtra Airports Development Company Ltd. v. M/s PBAInfrastructure Ltd. (SLP(C) No.5021 of 2017), the Section 34applications were filed on 27[th] April, 2015, and 25[th] May, 2015 respectivelyand the stay petitions or execution applications in those cases filed underSection 36 were dated 16[th] December, 2015 and 26[th] October, 2016respectively. In U.B. Cotton Pvt. Ltd. v. Jayshri Ginning andSpinning Pvt. Ltd. (SLP(C) No.33690 of 2017), the Section 34application was filed on 22[nd] February, 2013 and the execution applicationwas filed in 2014, which was transferred, by an order dated 12[th] January,2017, to the Commercial Court, Rajkot as Execution Petition No. 1 of2017. In the other cases, namely, Wind World (India) Ltd. v. EnerconGMBH through its Director (SLP(C) Nos.8372-8373 of 2017),Yogesh Mehra v. Enercon GMBH through its Director (SLP(C)Nos.8376-8378 of 2017), Ajay Mehra v. Enercon GMBH throughits Director (SLP(C) Nos.8374-8375 of 2017), and Anuradha Bhatia

Av. M/s Ardee Infrastructure Pvt. Ltd. (SLP(C) Nos.9599-9600 of2017), the Section 34 applications were filed after 23[rd] October, 2015,viz., on 7[th] December, 2016 in the first two appeals, on 6[th] December,2016 in the third appeal and on 4[th] January, 2016 in the last appeal.

6. Section 36, which is the bone of contention in the present appeals,Bis set out hereinbelow:

PRE-AMENDED PROVISION

“Section 36. Enforcement.

Where the time for making an application to set aside the arbitralaward under section 34 has expired, or such application havingbeen made, it has been refused, the award shall be enforcedunder the Code of Civil Procedure, 1908 (5 of 1908) in the samemanner as if it were decree of the Court.”

AMENDED PROVISION

“Section 36. Enforcement.

(1) Where the time for making an application to set aside thearbitral award under section 34 has expired, then, subject to theprovisions of sub-section (2), such award shall be enforced inaccordance with the provisions of the Code of Civil Procedure,1908, in the same manner as if it were decree of the court.

(2) Where an application to set aside the arbitral award has beenfiled in the Court under section 34, the filing of such an applicationshall not by itself render that award unenforceable, unless theCourt grants an order of stay of the operation of the said arbitralFaward in accordance with the provisions of sub-section (3), on aseparate application made for that purpose.

(3) Upon filing of an application under sub-section (2) for stay ofthe operation of the arbitral award, the Court may, subject tosuch conditions as it may deem fit, grant stay of the operation ofsuch award for reasons to be recorded in writing:

Provided that the Court shall, while considering the applicationfor grant of stay in the case of an arbitral award for payment ofmoney, have due regard to the provisions for grant of stay of amoney decree under the provisions of the Code of Civil Procedure,1908 (5 of 1908).”

6. Wide ranging arguments have been made on behalf of the partiesbefore us. Shri C.A. Sundaram, learned Senior Advocate, leading thecharge on behalf of the Appellants, has argued that Section 26 of theAmendment Act consists of two parts. According to him, the secondpart, which makes the Amendment Act applicable in relation to arbitralproceedings commenced on or after the date of commencement of thisAct, is the principal part, whereas the first part of Section 26 is in thenature of proviso or exception. It is his submission, therefore, that sofar as the first part is concerned, Section 6 of the General Clauses Act,1897 would be attracted, in which event the vested right to challengearbitral awards would continue by virtue of the said Section under theold Act, which would, therefore, apply to the facts of all these cases.For this purpose, he relied upon certain passages in ThyssenStahlunion v. Steel Authority of India (1999) 9 SCC 334, N.S. Nayak& Sons v. State of Goa (2003) 6 SCC 56, and Milkfood Ltd. v GMCIce Cream Pvt. Ltd. (2004) 7 SCC 288. Given the fact that the vestedright is preserved, the amendment is only prospective in nature, and forthis purpose, he has cited large number of judgments, starting with thecelebrated judgment in Garikapati Veeraya v. N. Subbiah Choudhry(1957) SCR 488. He then referred to chart of the effect of theamendments made in general by the Amendment Act, in which he dividedthe amended sections into three parts, namely, those that are onlyprocedural, those that are only substantive and those that are proceduralas well as substantive. In his submission, Section 36 is substantive innature, in that, in place of an automatic stay of the award under the oldregime, Order LXI, Rule 5 of the CPC will now be applicable. As aresult of this, instead of an automatic stay, deposit of the entire amountor substantial amount of the award would now have to be made in theinterim period between the award and the decision in the Section 34application. He referred to the 246[th] Law Commission Report as well asthe debates leading to the Amendment Act to buttress his submissions.He also referred to the report of High Level Committee headed byJustice B.N. Srikrishna, delivered on 30[th] July, 2017, in which, afterreferring to the divergent views taken by the High Courts, the Committeerecommended that the Amendment Act will not apply to arbitralproceedings as well as Court proceedings which arise out of such arbitralproceedings, where the arbitral proceedings themselves have commencedin accordance with Section 21 before the commencement of theAmendment Act. Concomitantly, according to the High Level Committee,

Athe Amendment Act will only apply to arbitral proceedings commencedon or after the commencement of the Amendment Act and to Courtproceedings that arise out of or in relation to such arbitral proceedings.

8. Shri K.V. Viswanathan, learned Senior Advocate appearing onbehalf of the BCCI in Civil Appeal arising out of SLP(C) No.19546 ofB2016, has argued that the expression “arbitral proceedings” in both partsof Section 26 refers only to proceedings before an arbitrator and is thesame in both parts. Consequently, it is clear that it is only arbitralproceedings that have commenced after 23[rd] October, 2015 and Courtproceedings in relation thereto, that will be governed by the AmendmentAct. If the arbitral proceedings have commenced under the old Act,Cthen those proceedings as well as all Court proceedings in relation thereto,would be governed only by the old Act. According to him, Section 6 ofthe General Clauses Act would be attracted, insofar as Court proceedingsare concerned, when the first part of Section 26 is applied. Accordingto him, the second part would not become superfluous on his reading ofDSection 26, as the option given to the parties would be given only onapplication of the first part and not the second. According to the learnedsenior counsel, the judgment in Thyssen (supra) is determinative of thepresent case, inasmuch as an entirely new challenge procedure underSection 34 is laid down by the amendments made in 2015, somewhatlike the challenge procedure laid down in the original Section 34 of theE1996 Act, when contrasted with Section 30 of the Arbitration Act, 1940.According to the learned senior counsel, party autonomy must berespected, and this being the position, parties who have entered intoagreements in the expectation that the old regime will apply cannotsuddenly be foisted with completely different regime under theFAmendment Act. According to the learned senior counsel, Section 85of the 1996 Act is similar to Section 26 of the Amendment Act and,therefore, the judgment in Thyssen (supra) must apply on all fours.The learned senior counsel also forcefully put to us number of anomaliesthat would arise if the amendment to Section 36 were to be given

retrospective operation. According to him, the right to be governed byGthe broad appellate/supervisory procedure found in sections 34 and 37of the 1996 Act would be vested right, resulting in the Amendment Actnot being applicable. Insofar as Section 36 is concerned, the learnedsenior counsel made elaborate submissions on the difference betweenenforceability and execution, and stated that whereas the former dealtHwith substantive rights, the latter dealt with procedural rights. Equally,

the expression “has been” contained in the amended Section 36(2) ispurely contextual and equivalent to the expression “is”. For this, he hascited certain judgments which we will refer to in due course. Accordingto the learned senior counsel, the decision in National Aluminium Co.Ltd. v. Pressteel & Fabrications (P) Ltd. (2004) 1 SCC 540, whichexhorted the legislature to amend Section 36, cannot take the matter anyfurther, in that the said decision cannot be read to say that Section 36should be substituted with retrospective effect.

9. Shri Tushar Mehta, learned Additional Solicitor Generalappearing in SLP (C) No.5021 of 2017, supported the arguments of hispredecessor and added that, given retrospective operation of Section36, various anomalies would arise, which would lead to hardship andinconvenience and that, therefore, we should not impart retrospectiveoperation to the aforesaid provision.

10. Shri Arvind Datar, learned senior advocate appearing in SLP(C) No.20224 of 2016, supported Shri Viswanathan in stating that theamendments made by the Amendment Act were very far reaching andchanged the basis of challenge to arbitral awards. It would not be fair toretrospectively change the rules of the game insofar as such awards areconcerned. According to the learned senior counsel, the expression “inrelation to” that was used in Section 85 of the 1996 Act, as expounded inThyssen (supra), was because Section 85 repealed three enactmentstogether, and not because it sought to refer to Court proceedings. Hereiterated that in the interest of clarity, the report of the High LevelCommittee, headed by Justice B.N. Srikrishna referred to by ShriSundaram, was the correct position so that it clearly be delineated thatthe moment arbitral proceedings commenced before the AmendmentAct, such “proceedings”, which would include all Court proceedings inrelation thereto, would be governed by the old Act, and only arbitralproceedings commenced after the Amendment Act came into force,together with related Court proceedings, would all be governed by theAmendment Act.

11. Shri Anirudh Krishnan, learned Advocate appearing for theintervenor in SLP (C) No.20224 of 2016, referred to Section 85A containedin the 246[th] Law Commission Report which, according to him, was givena go-by and was not followed in Section 26. He referred to the LawMinister’s speech stating that the amendment must be given prospectiveeffect and further argued that the reason why the expression “in relation

Ato” was used in the second part of Section 26 was because distinctionwas made on whether the seat of the arbitral tribunal was in India oroutside India. According to the learned counsel, since amendments havebeen made in Part II of the 1996 Act as well, if seat based categorizationis seen, the expression “in relation to” would not apply to Courtproceedings simpliciter, but to arbitral tribunals which have their seatBoutside India. He further argued that Sections 34 and 36 are part of onescheme and are the “appeal package” insofar as arbitral proceedingsare concerned and must, therefore, go along with the arbitral proceedings.This being the position, it is clear that the pre-amendment position wouldapply in case of arbitrations which commenced before the AmendmentCAct came into force.12. Leading arguments for the other side, Shri Neeraj Kaul, learnedsenior counsel appearing in SLP(C) Nos.19545-19546 of 2016,emphasized that in the first part of Section 26, there is an absence of themention of Court proceedings. According to the learned senior counsel,Dthis was of great significance and would, therefore, show that theAmendment Act would retrospectively apply to Court proceedings, asdistinguished from arbitral proceedings. On correct construction ofSection 26, according to the learned senior counsel, the second part ofSection 26 takes within its sweep both arbitral proceedings as well asCourt proceedings in relation thereto and would, therefore, apply to arbitralEproceedings as well as Court proceedings in relation thereto, which havecommenced after the Amendment Act came into force. For this purpose,he relied heavily on paragraph 23 in Thyssen (supra) and, submittedthat, therefore, on true construction of Section 26, Section 34proceedings that have commenced before the Amendment Act cameFinto force would be governed by the Amendment Act, and arbitralproceedings which commenced after the Amendment Act, together withSection 34 applications made in relation thereto, would then be governedunder the second part of Section 26 of the Amendment Act. Accordingto the learned senior counsel, no vested right exists inasmuch as Section

34 proceedings are not appellate proceedings. In any case, Section 26Gevinces contrary intention and would take away any such right assuminga vested right is involved. He countered the arguments of ShriViswanathan, in particular, by stating that the original intent of the 1996Act was to minimise Court intervention and to restrict the grounds ofchallenge of arbitral awards, and inasmuch as the decisions of this CourtHin ONGC v. Saw Pipes Ltd (2003) 5 SCC 705 and ONGC Ltd.

v. Western Geco International Ltd. (2014) 9 SCC 263 had gonecontrary to the original intention of the 1996 Act, all that the AmendmentAct did was to bring the 1996 Act back, in accordance with its originalintent, by nullifying the aforesaid judgments. He added that the groundof patent illegality that had been added by the Amendment Act alsodiffers from the said ground as understood in the earlier case law, andhas been added only qua domestic and not international commercialarbitrations. Learned senior counsel then argued that given the fact thatcourt proceedings in this country take an inordinately long time, the wholeobject of the amendment to Section 36 would be stultified, if Section 36is only to apply to court proceedings that result from arbitral proceedings,which have commenced on and after the commencement of theAmendment Act. That this could never be the case is clear from ajudgment of the House of Lords, reported as Minister of Public Worksof the Government of the State of Kuwait v. Sir Frederick Snowand Partners, (1984) 2 WLR 340, which is strongly relied upon.Learned senior counsel also stated that there is no distinction betweenexecution and enforcement, and “enforcement” under Section 36, isnothing but execution of an award, as if it were decree under the Codeof Civil Procedure, 1908. He further argued that it is well settled thatexecution proceedings are procedural in nature and would be retrospectiveand, therefore, the substituted Section 36 would apply even in caseswhere the Section 34 application is made before the commencement ofthe Amendment Act. Another argument was that the expression “hasbeen” contained in Section 36(2), as amended, would, in any case, referto Section 34 proceedings that have already been filed, even pre-amendment, and for this purpose, he referred to certain judgments.

13. Shri P. Chidambaram, learned senior counsel appearing forthe Respondents in SLP (C) Nos.8372-8373 of 2017, emphasised theword “but” that appears in Section 26, which not only segregates thefirst part of Section 36 from the second part, but also makes it clear thatthe two parts apply to two different situations. The first part, accordingto learned senior counsel, would apply to the arbitral proceedingsthemselves i.e. from the Section 21 stage up to the Section 32 stage ofthe 1996 Act, whereas the second part would include all proceedingsthat begin from the Section 21 stage and all court proceedings in relationthereto. According to Shri Chidambaram, Section 36, in its original form,is only clog on the right of the decree holder. He argued that there is nocorresponding vested right in the judgment debtor to indefinitely delay

Aproceedings and for this purpose, he cited several judgments. Accordingto the learned senior counsel, Section 36 proceedings are entirelyindependent of Section 34 proceedings and the moment Section 36 speaksof an award being enforceable under the Code of Civil Procedure as ifit were decree, enforceability only means execution and nothing else.He then referred to Satish Kumar v. Surinder Kumar, (1969) 2 SCRB244 to show that an award is not mere waste paper when it is deliveredand before it becomes decree, as it decides the rights of the partiesand, therefore, being final and binding on parties, is judgment deliveredbetween parties, which may become executable on certain conditionsbeing met, but which do not detract from the fact that the award itselfChas “vitality”.14. Shri Kapil Sibal, learned senior counsel appearing on behalf ofthe Respondents in SLP (C) Nos.8374-8375 of 2017, has argued beforeus that the Statement of Objects and Reasons for the Amendment Act,in particular paragraph 4 thereof, would make it clear that the AmendmentDAct was necessitated because of India’s poor performance in contractenforcement among the nations in the world. For this reason, accordingto the learned senior counsel, it is clear that Section 26 needs to beinterpreted in such manner as would further the object of theAmendment Act and that this being so, it is clear that Section 26 must beread as being provision which is not savings provision at all, but aEprovision which destroys all rights, if any, that vested in the Appellants inthe 1996 Act as unamended. For this purpose, he cited certain judgmentswhich will be referred to in the course of our judgment.

15. Dr. A.M. Singhvi, learned senior counsel appearing on behalfof the Respondents in SLP (C) Nos.8376-8378 of 2017, has stated thatFthe correct construction of Section 26 would be the intermediate betweenthe extremes that have been canvassed before us by learned counselappearing on behalf of the Appellants. According to him, it is importantto emphasise that the first part applies only to arbitral proceedings beforean arbitral tribunal and the second part would apply only to courtGproceedings in relation thereto. This becomes clear from two things;one, the expression “to” appearing in the first part as contrasted with theexpression “in relation to” appearing in the second part; and, two, thepresence of Section 21 of the 1996 Act in the first part and its absencein the second part of Section 26. According to him, this would be thecorrect interpretation of Section 26, which would result in no anomalies,H

as it is clear that the date of commencement of an arbitral proceedingwould be fixed with reference to Section 21 and the date ofcommencement of court proceeding would be fixed with reference tothe date on which the court proceeding is filed, and it is only arbitralproceedings and court proceedings which are filed after thecommencement of the Amendment Act that would be so covered.

16. Shri Nakul Dewan, learned Advocate appearing on behalf ofthe Respondent in SLP (C) No.20224 of 2016 has argued that the firstpart of Section 26 speaks of “the arbitral proceedings” commenced inaccordance with the provisions of Section 21. The second part of Section26 omits the word “the” as well as Section 21, making it clear that it isthe arbitral proceedings before the Arbitrator alone that is referred to inthe first part of Section 26, as opposed to Court proceedings referred toin the second part of Section 26, where the expression “in relation toarbitral proceedings” does not contain the word “the”. According tohim, 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 byagreement, cannot derogate. According to the learned counsel, eachand every Court proceeding under the 1996 Act is separate and distinctproceeding and it is the date of such proceeding alone which is relevantfor the purpose of determining whether the Amendment Act applies.According to the learned counsel, there is no vested right to resist theexecution of an award merely because an application for setting asidethe award is pending under Section 34 of the 1996 Act. Even on theassumption that there is such vested right, it is taken away, given theclear legislative intent of Section 26 of the Amendment Act. Lastly, heargued that on facts, clause 22.2(5) of the agreement between the partiesautomatically brought in all amendments to the 1996 Act and that,therefore, Section 36 in its amended form would necessarily apply to thefacts in this case.17. Having heard extensive and wide ranging arguments on thereach of Section 26 of the Amendment Act, it will be important to firstbear in mind the principles of interpretation of such provision. That anAmendment Act does include within it provisions that may be repealedeither wholly or partially and that the provisions of Section 6 of the GeneralClauses Act would generally apply to such Amendment Acts is beyondany doubt – See Bhagat Ram Sharma v. Union of India, 1988 (Supp)

ASCC 30 at 40-41. That such provision is akin to repeal and savingsclause would be clear when it is read with Section 27 of the AmendmentAct and Section 85 of the 1996 Act, which are set out hereinbelow:

“Section 27. Repeal and savings.

(1) The Arbitration and Conciliation (Amendment) Ordinance,B2015, is hereby repealed.

(2) Notwithstanding such repeal, anything done or any actiontaken under the principal Act, as amended by the said Ordinance,shall be deemed to have been done or taken under thecorresponding provisions of the principal Act, as amended bythis Act.C

xxx xxx xxx

Section 85. Repeal and savings.—

(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of1937), the Arbitration Act, 1940 (10 of 1940) and the ForeignDAwards (Recognition and Enforcement) Act, 1961 (45 of 1961)are hereby repealed.

(2) Notwithstanding such repeal,—

(a) the provisions of the said enactments shall apply in relation toarbitral proceedings which commenced before this Act cameEinto force unless otherwise agreed by the parties but this Actshall apply in relation to arbitral proceedings which commencedon or after this Act comes into force;

(b) all rules made and notifications published, under the saidenactments shall, to the extent to which they are not repugnantto this Act, be deemed respectively to have been made or issuedFunder this Act.”

18. At this point, it is instructive to refer to the 246[th] LawCommission Report which led to the Amendment Act. This Report,which was handed over to the Government in August, 2014, had this tostate on why it was proposing to replace Section 36 of the 1996 Act:G“AUTOMATIC STAY OF ENFORCEMENT OF THEAWARD UPON ADMISSION OF CHALLENGE

43. Section 36 of the Act makes it clear that an arbitral awardbecomes enforceable as decree only after the time for filing apetition under section 34 has expired or after the section 34 petition

has been dismissed. In other words, the pendency of section34 petition renders an arbitral award unenforceable. TheSupreme 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 partyto deposit any part of the award into Court. While this decisionwas in relation to the powers of the Supreme Court to pass suchan order under section 42, the Bombay High Court in AfconsInfrastructure Limited v. The Board of Trustees, Port of Mumbai2014 (1) Arb LR 512 (Bom) applied the same principle to thepowers of Court under section 9 of the Act as well. Admissionof section 34 petition, therefore, virtually paralyzes the processfor the winning party/award creditor.

44. The Supreme Court, in National Aluminium, has criticizedthe present situation in the following words:

“However, we do notice that this automatic suspension of theexecution of the award, the moment an application challengingthe said award is filed under section 34 of the Act leaving nodiscretion in the court to put the parties on terms, in our opinion,defeats the very objective of the alternate dispute resolutionsystem to which arbitration belongs. We do find that there is arecommendation made by the concerned Ministry to theParliament to amend section 34 with proposal to empower thecivil court to pass suitable interim orders in such cases. In viewof the urgency of such amendment, we sincerely hope thatnecessary steps would be taken by the authorities concerned atthe earliest to bring about the required change in law.”

45. In order to rectify this mischief, certain amendments havebeen suggested by the Commission to section 36 of the Act,which provide that the award will not become unenforceablemerely upon the making of an application under section 34.

So far as the transitory provision, so described by the Report, is concerned,the Report stated:

“76. The Commission has proposed to insert the new section 85-A to the Act, to clarify the scope of operation of each of theamendments with respect to pending arbitrations/proceedings.As general rule, the amendments will operate prospectively,

Aexcept in certain cases as set out in section 85-A or otherwiseset out in the amendment itself.”

The Report then went on to amend Section 36 as follows:

“Amendment of Section 36

19. In section 36, (i) add numbering as sub-section (1) beforethe words “Where the time” and after the words “Section 34has expired,” delete the words “or such application having beenmade, it has been refused” and add the words “then subject tothe provision of sub-section (2) hereof,”

(ii) insert sub-section “(2) Where an application to set aside theCarbitral award has been filed in the Court under section 34, thefiling of such an application shall not by itself render the awardunenforceable, unless upon separate application made for thatpurpose, the Court grants stay of the operation of the award inaccordance with the provisions of sub-section (3) hereof;”

D(iii) insert sub-section “(3) Upon filing of the separate applicationunder subsection (2) for stay of the operation of the award, thecourt may, subject to such conditions as it may deem fit, grantstay of the operation of the award for reasons to be recorded inwriting.”

(iv) insert proviso “Provided that the Court shall while consideringEthe grant of stay, in the case of an award for money shall havedue regard to the provisions for grant of stay of money decreesunder the Code of Civil Procedure, 1908.”

[NOTE: This amendment is to ensure that the mere filing of anapplication under section 34 does not operate as an automaticFstay on the enforcement of the award. The Supreme Court inNational Aluminium Co. Ltd. v. Pressteel & Fabrications (P)Ltd. and Anr, (2004) 1 SCC 540, recommends that such anamendment is the need of the hour.]”[1]

1 As matter of fact, the amended Section 36 only brings back Article 36(2) of theUNCITRAL Model Law, which is based on Article 6 of the New York Convention, andGwhich reads as under:

“36(2). If an application for setting aside or suspension of an award hasbeen made to court referred to in paragraph (1)(a)(v) of this article, thecourt where recognition or enforcement is sought may, if it considers itproper, adjourn its decision and may also, on the application of theparty claiming recognition or enforcement of the award, order the otherparty to provide appropriate security.”

The transitory provision Section 85A was then set out as follows:

“Insertion of Section 85A

new section Section 85A on transitory provisions has beenincorporated.

Transitory provisions.— (1) Unless otherwise provided in theArbitration and Conciliation (Amending) Act, 2014, the provisionsof the instant Act (as amended) shall be prospective in operationand shall apply only to fresh arbitrations and fresh applications,except in the following situations –

(a) the provisions of section 6-A shall apply to all pendingproceedings and arbitrations. Explanation: It is clarified that wherethe issue of costs has already been decided by the court/tribunal,the same shall not be opened to that extent.

(b) the provisions of section 16 sub-section (7) shall apply to allpending proceedings and arbitrations, except where the issuehas been decided by the court/tribunal.

(c) the provisions of second proviso to section 24 shall apply toall pending arbitrations.

(2) For the purposes of the instant section,—

(a) “fresh arbitrations” mean arbitrations where there has beenno request for appointment of arbitral tribunal; or application forappointment of arbitral tribunal; or appointment of the arbitraltribunal, prior to the date of enforcement of the Arbitration andConciliation (Amending) Act, 2014.

(b) “fresh applications” mean applications to court or arbitraltribunal made subsequent to the date of enforcement of theArbitration and Conciliation (Amending) Act, 2014.

[NOTE: This amendment is to clarify the scope of operation ofeach of the proposed amendments with respect to pendingarbitrations/proceedings.]”

19. The debates in Parliament in this context were referred to bycounsel on both sides. Shri T. Satpathy (Dhenkanal) stated:

“You have brought in an amendment to Section 25 (a) sayingthat this Act will not be retrospective. When the Bill for judges’

pension and salary could be retrospective, why can you not amendit with retrospective effect so that ONGC-RIL case could bebrought under this Act and let it be adjudicated as early as possiblewithin 18 months and let the people of this country get somejustice some time. Let us be fair to them.”

BTo similar effect is the speech of Shri APJ Reddy, which reads as under:

“It is unclear whether the amended provisions shall apply topending arbitration proceedings. The Law Commission of India,in its 246th Report, which recommended amendments to theArbitration & Conciliation Act, 1996, had proposed to insert aCnew Section 85-A to the Act, which would clarify the scope ofoperation to each amendment with respect to pending arbitrationproceedings. However, this specific recommendation has not beenincorporated into the Ordinance. One of the reasons for bringingabout this ordinance is to instill sense of confidence in foreigninvestors in our judicial process, with regard to certainty ofDimplementation in practice and ease of doing business. Therefore,it is strongly urged to incorporate Section 85A as proposed bythe 246th Report of the Law Commission of India, where it clearlystates the scope of operation of the amended provisions.”

The Law Minister in response to the aforesaid speeches stated:E

“Nobody has objected to this Bill but some of our friends haveobserved certain things. They have said that the Bill is the needof the hour and that good Bill has been brought. fewsuggestions have been given by them. One of the suggestionswas that it should have retrospective effect. If the parties agree,Fthen there will be no problem. Otherwise, it will only haveprospective effect.”

20. Finally, Section 26 in its present form was tabled as Section25A at the fag end of the debates, and added to the Bill. couple ofthings may be noticed on comparison of Section 85A, as proposed byGthe Law Commission, and Section 26 as ultimately enacted. First andforemost, Section 85A states that the amendments shall be prospectivein operation and then bifurcates proceedings into two parts – (i) fresharbitrations, and (ii) fresh applications. Fresh arbitrations are defined asvarious proceedings before an arbitral tribunal that is constituted, whereasfresh applications mean applications to Court or Tribunal, madeH

subsequent to the date of enforcement of the Amendment Act. Threeexceptions are provided by Section 85A, to which the Amendment Actwill apply retrospectively. The first deals with provisions relating tocosts, the second deals with the new provision contained in Section 16(7)(which has not been adopted by the Amendment Act) and the third dealswith the second proviso to Section 24, which deals, inter alia, with oralhearings and arguments on day-to-day basis and the non-grant ofadjournments, unless sufficient cause is made out.

21. What can be seen from the above is that Section 26 has, whileretaining the bifurcation of proceedings into arbitration and Courtproceedings, departed somewhat from Section 85A as proposed by theLaw Commission.

22. That provision such as Section 26 has to be construed literallyfirst, and then purposively and pragmatically, so as to keep the object ofthe provision also in mind, has been laid down in Thyssen (supra) inparagraph 26 as follows:

“26. Present-day courts tend to adopt purposive approach whileinterpreting the statute which repeals the old law and for thatpurpose to take into account the objects and reasons which ledto the enacting of the new Act. We have seen above that thisapproach was adopted by this Court in M.M.T.C. Ltd.case [(1996) 6 SCC 716]. Provisions of both the Acts, old andnew, are very different and it has been so observed in SundaramFinance Ltd. case [(1999) 2 SCC 479]. In that case, this Courtalso said that provisions of the new Act have to be interpretedand construed independently and that in fact reference to the oldAct may actually lead to misconstruction of the provisions of thenew Act. The Court said that it will be more relevant, whileconstruing the provisions of the new Act, to refer to theUNCITRAL Model Law rather than the old Act. In the caseof Kuwait Minister of Public Works v. Sir Frederick Snowand Partners [(1984) 1 All ER 733 (HL)] the award was givenbefore Kuwait became party to the New York Conventionrecognised by an Order in Council in England. The House ofLords held that though foreign award could be enforced inEngland under the (U.K.) Arbitration Act, 1975 as when theproceedings for enforcement of the award were initiated inEngland Kuwait had become party to the Convention. It

FGH

negatived the contention that on the date the award was givenKuwait was not party to the New York Convention.”

(at pages 370-371)

Similarly, in Milkfood Limited (supra) at 315, this Court, while construingSection 85 of the 1996 Act, had this to say:

“70. Section 85 of the 1996 Act repeals the 1940 Act. Sub-section(2) of Section 85 provides for non obstante clause. Clause (a)of the said sub-section provides for saving clause stating that theprovisions of the said enactments shall apply in relation to arbitralproceedings which commenced before the said Act came intoforce. Thus, those arbitral proceedings which were commencedbefore coming into force of the 1996 Act are saved and theprovisions of the 1996 Act would apply in relation to arbitralproceedings which commenced on or after the said Act cameinto force. Even for the said limited purpose, it is necessary tofind out as to what is meant by commencement of arbitralproceedings for the purpose of the 1996 Act wherefor alsonecessity of reference to Section 21 would arise. The court is tointerpret the repeal and savings clauses in such manner so asto give pragmatic and purposive meaning thereto. It is onething to say that commencement of arbitration proceedings isdependent upon the facts of each case as that would be subjectto the agreement between the parties. It is also another thing tosay that the expression “commencement of arbitrationproceedings” must be understood having regard to the contextin which the same is used; but it would be totally different thingto say that the arbitration proceedings commence only for thepurpose of limitation upon issuance of notice and for no otherpurpose. The statute does not say so. Even the case-laws do notsuggest the same. On the contrary, the decisions of this Courtoperating in the field beginning from Shetty’sConstructions [(1998) 5 SCC 599] are ad idem to the effectthat Section 21 must be taken recourse to for the purpose ofinterpretation of Section 85(2)(a) of the Act. There is no reason,even if two views are possible, to make departure from thedecisions of this Court as referred to hereinbefore.”

23. All learned counsel have agreed, and this Court has found, onHa reading of Section 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 tocertain proceedings. The question is what exactly is contained in bothparts. The two parts are separated by the word ‘but’, which also showsthat the two parts are separate and distinct. However, Shri Viswanathanhas argued that the expression “but” means only that there is an emphaticrepetition of the first part of Section 26 in the second part of the saidSection. For this, he relied upon the Concise Oxford Dictionary on CurrentEnglish, which states:

“introducing emphatic repetition; definitely (wanted to see nobody,but nobody)”.

Quite obviously, the context of the word “but” in Section 26 cannot bearthe aforesaid meaning, but serves only to separate the two distinct partsof 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 arbitralproceedings commenced, in accordance with the provisions of section21 of the principal Act, before the commencement of this Act unless theparties otherwise agree…” is that: (1) “the arbitral proceedings” andtheir commencement is mentioned in the context of Section 21 of theprincipal Act; (2) the expression used is “to” and not “in relation to”; and(3) parties may otherwise agree. So far as the second part of Section 26is concerned, namely, the part which reads, “…but this Act shall apply inrelation to arbitral proceedings commenced on or after the date ofcommencement of this Act” makes it clear that the expression “in relationto” is used; and the expression “the” arbitral proceedings and “inaccordance with the provisions of Section 21 of the principal Act” isconspicuous by its absence.

25. That the expression “the arbitral proceedings” refers toproceedings before an arbitral tribunal is clear from the heading of ChapterV of the 1996 Act, which reads as follows:

“Conduct of Arbitral Proceedings”

The entire chapter consists of Sections 18 to 27 dealing with the conductof arbitral proceedings before an arbitral tribunal. What is also importantto notice is that these proceedings alone are referred to, the expression“to” as contrasted with the expression “in relation to” making this clear.Also, the reference to Section 21 of the 1996 Act, which appears in

AChapter V, and which speaks of the arbitral proceedings commencingon the date on which request for dispute to be referred to arbitrationis received by the respondent, would also make it clear that it is theseproceedings, and no others, that form the subject matter of the first partof Section 26. Also, since the conduct of arbitral proceedings is largelyprocedural in nature, parties may “otherwise agree” and apply theBAmendment Act to arbitral proceedings that have commenced beforethe Amendment Act came into force.[2]

In stark contrast to the first part of Section 26 is the second part, wherethe Amendment Act is made applicable “in relation to” arbitral proceedingswhich commenced on or after the date of commencement of theCAmendment Act. What is conspicuous by its absence in the second partis any reference to Section 21 of the 1996 Act. Whereas the first partrefers only to arbitral proceedings before an arbitral tribunal, the secondpart refers to Court proceedings “in relation to” arbitral proceedings,and it is the commencement of these Court proceedings that is referredDto in the second part of Section 26, as the words “in relation to thearbitral proceedings” in the second part are not controlled by theapplication of Section 21 of the 1996 Act. Section 26, therefore, bifurcatesproceedings, as has been stated above, with great degree of clarity,into two sets of proceedings – arbitral proceedings themselves, and Courtproceedings in relation thereto. The reason why the first part of Section 26E2 Section 29A of the Amendment Act provides for time limits within which an arbitralaward is to be made. In Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4SCC 602 at 633, this Court stated:

“(iii) Every litigant has vested right in substantive law but no suchright exists in procedural law.

(iv) procedural statute should not generally speaking be appliedFretrospectively where the result would be to create new disabilities orobligations or to impose new duties in respect of transactions alreadyaccomplished.

(v) statute which not only changes the procedure but also creates newrights and liabilities shall be construed to be prospective in operation,unless otherwise provided, either expressly or by necessaryimplication.”GIt is, inter alia, because timelines for the making of an arbitral award have been laiddown for the first time in Section 29A of the Amendment Act that parties were giventhe option to adopt such timelines which, though procedural in nature, create newobligations in respect of proceeding already begun under the unamended Act. This is,of course, only one example of why parties may otherwise agree and apply the newprocedure laid down by the Amendment Act to arbitral proceedings that have commencedbefore it came into force.H

is couched in negative form is only to state that the Amendment Act willapply even to arbitral proceedings commenced before the amendment ifparties otherwise agree. If the first part of Section 26 were couched inpositive language (like the second part), it would have been necessary toadd proviso stating that the Amendment Act would apply even to arbitralproceedings commenced before the amendment if the parties agree. Ineither case, the intention of the legislature remains the same, the negativeform conveying exactly what could have been stated positively, with thenecessary proviso. Obviously, “arbitral proceedings” having beensubsumed in the first part cannot re-appear in the second part, and theexpression “in relation to arbitral proceedings” would, therefore, applyonly to Court proceedings which relate to the arbitral proceedings. Thescheme of Section 26 is thus clear: that the Amendment Act is prospectivein nature, and will apply to those arbitral proceedings that are commenced,as understood by Section 21 of the principal Act, on or after theAmendment Act, and to Court proceedings which have commenced onor after the Amendment Act came into force.

26. We now consider some of the submissions of learned counselfor the parties as to what ought to be the true construction of Section 26.According to Shri Sundaram, the second part of Section 26 should betaken to be the principal part, with the first part being read as an exceptionto the principal part. This is so that Section 6 of the General Clauses Actthen gets attracted to the first part, the idea being to save accrued rights.Section 6 applies unless contrary intention appears in the enactment inquestion. The plain language of Section 26 would make it clear that acontrary intention does so appear, Section 26 being special provisionhaving to be applied on its own terms.

27. Thus, in Transport and Dock Workers’ Union & othersv. New Dholera Steamship Ltd., Bombay and others, (1967) 1 LLJ434, Five Judge Bench of this Court held:

“6. It was contended before us that as an appeal is continuationof the original proceeding the repeal should not affect theenforcement 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 enactmentby another. It is contended that as the Payment of BonusOrdinance has been repealed by Section 40(1), the consequencesenvisaged in Section 6 of the General Clauses Act must follow

and the present matter must be disposed of in accordance withthe Ordinance as if the Act had not been passed. It is submittedthat there was right and corresponding obligation to pay bonusunder Section 10 of the Ordinance and that right and obligationcannot be obliterated because of the repeal of the Ordinance.This argument is not acceptable because of the provisions of thesecond sub-section of Section 40. That sub-section reads asfollows:

“40. Repeal and saving.

(2) Notwithstanding such repeal, anything done or any actiontaken under the said Ordinance shall be deemed to have beendone or taken under this Act as if this Act had commenced onthe 29th May, 1965.”

Section 6 of the General Clauses Act applies ordinarily but itDdoes not apply if different intention appears in the repealingAct. Here different intention is made to appear expressly andthe special saving incorporated in the repealing Act protects onlyanything done or any action taken under the Ordinance which isdeemed to have been done or taken under this Act as if the ActEhad commenced on 29th May, 1965. Nothing had been doneunder the Ordinance and no action was taken which needsprotection; nor was anything pending under the Ordinance whichcould be continued as if the Act had not been passed. There wasthus nothing which was to be saved after the repeal of theOrdinance and this question which might have arisen under theFOrdinance now ceases to exist.”

In Kalawati Devi Harlalka v. CIT (1967) 3 SCR 833, repeal andsavings provision contained in Section 297 of the Income Tax Act, 1961was held to evidence an intention to the contrary under Section 6 of theGeneral Clauses Act as follows:

“14. The learned counsel for the appellant submits that Parliamenthad Section 6 of the General Clauses Act in view, and thereforeno express provision was made dealing with appeals andrevisions, etc. In our view, Section 6 of the General Clauses Actwould not apply because Section 297(2) evidences an intentionHto the contrary. In Union of India v. Madan Gopal Kabra [25

ITR 5] while interpreting Section 13 of the Finance Act, 1950,already extracted above, this Court observed at p. 68:

“Nor can Section 6 of the General Clauses Act, 1897, serve tokeep alive the liability to pay tax on the income of the year1949-50 assuming it to have accrued under the repealed Statelaw, for “different intention” clearly appears in Sections 2and 13 of the Finance Act read together as indicated above.”

It is true that whether different intention appears or not mustdepend on the language and content of Section 297(2). It seemsto us, however, that by providing for so many matters mentionedabove, some in accord with what would have been the resultunder Section 6 of the General Clauses Act and some contraryto what would been the result under Section 6, Parliament hasclearly evidenced an intention to the contrary.”

28. Shri Sundaram’s submission is also not in consonance with thelaw laid down in some of our judgments. The approach to statutes, whichamend 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 at899-900, thus:

“In our opinion the approach of the High Court to the question isnot quite correct. Whenever there is repeal of an enactment,the consequences laid down in Section 6 of the General ClausesAct will follow unless, as the section itself says, different intentionappears. In the case of simple repeal there is scarcely anyroom for expression of contrary opinion. But when the repealis followed by fresh legislation on the same subject we wouldundoubtedly have to look to the provisions of the new Act, butonly for the purpose of determining whether they indicate adifferent intention. The line of enquiry would be, not whether thenew Act expressly keeps alive old rights and liabilities but whetherit manifests an intention to destroy them.We cannot thereforesubscribe to the broad proposition that Section 6 of the GeneralClauses Act is ruled out when there is repeal of an enactmentfollowed by fresh legislation. Section 6 would be applicable insuch cases also unless the new legislation manifests an intentionincompatible with or contrary to the provisions of the section.Such incompatibility would have to be ascertained from aconsideration of all the relevant provisions of the new law and

Athe mere absence of saving clause is by itself not material. It isin the light of these principles that we now proceed to examinethe facts of the present case.”

(Emphasis Supplied)

This statement of the law has subsequently been followed in TransportBand Dock Workers Union & Ors. v. New Dholera SteamshipsLtd., Bombay and Ors. (supra) at paragraph 6 and T.S. Baliah v.T.S. Rengachari, 1969 3 SCR 65 at 71-72.

29. Equally, the suggested interpretation of Shri Viswanathan wouldnot only do violence to the plain language of Section 26, but would alsoCignore the words “in relation to” in the second part of Section 26, as wellas ignore the fact that Section 21 of the 1996 Act, though mentioned inthe first part, is conspicuous by its absence in the second part. Accordingto Shri Viswanathan, the expression “arbitral proceedings commenced”is the same in both parts and, therefore, the commencement of arbitralproceedings under Section 21 is the only thing to be looked at in bothDparts. Thus, according to the learned senior counsel, if arbitral proceedingshave commenced prior to coming into force of the Amendment Act, thesaid proceedings, together with all proceedings in Court in relation thereto,would attract only the provisions of the unamended 1996 Act. Similarly,when arbitral proceedings have commenced under Section 21 after theEcoming into force of the Amendment Act, those proceedings, includingall courts proceedings in relation thereto, would be governed by theAmendment Act. This is not the scheme of Section 26 at all, as has beenpointed out above. Further, this argument is more or less the conclusionreached by the report of the High Level Committee, headed by JusticeB.N. Srikrishna, to amend the 1996 Act.[3 ] It can be seen from the reportFof the High Level Committee that an amendment would be required to

3 Shri Tushar Mehta, learned ASG, referred to press release from the Government ofIndia, dated March 7[th], 2018, after arguments have been concluded, in writtensubmission made to us. According to him, the press release refers to new Section 87in proposed amendment to be made to the 1996 Act. The press release states that theUnion Cabinet, chaired by the Prime Minister, has approved the Arbitration andGConciliation (Amendment) Bill, 2018 in which new Section 87 is proposed to beinserted as follows:“A new section 87 is proposed to be inserted to clarify that unless partiesagree otherwise the Amendment Act 2015 shall not apply to (a) Arbitralproceedings which have commenced before the commencement of theAmendment Act of 2015 (b) Court proceedings arising out of or in relation tosuch arbitral proceedings irrespective of whether such court proceedings areH

Section 26 to incorporate its findings. Section 87 of the proposedArbitration and Conciliation (Amendment) Bill, 2018 cannot be looked

commenced prior to or after the commencement of the Amendment Act of2015 and shall apply only to Arbitral proceedings commenced on or after thecommencement of the Amendment Act of 2015 and to court proceedingsarising 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 topending court proceedings related to arbitrations commenced prior to 23October 2015 would result in uncertainty and prejudice to parties, as theymay have to be heard again. It may also not be advisable to make the 2015Amendment Act applicable to fresh court proceedings in relation to sucharbitrations, as it may result in an inconsistent position. Therefore, it is feltthat it may be desirable to limit the applicability of the 2015 Amendment Actto arbitrations commenced on or after 23 October 2015 and related court

proceedings.

Recommendations

1. Section 26 of the 2015 Amendment Act may be amended to provide that:a. unless parties agree otherwise, the 2015 Amendment Act shall not applyto: (a) arbitral proceedings commenced, in accordance with section 21 of theACA, before the commencement of the 2015 Amendment Act; and (b) courtproceedings arising out of or in relation to such arbitral proceedings irrespectiveof whether such court proceedings are commenced prior to or after thecommencement of the 2015 Amendment Act; and

b. the 2015 Amendment Act shall apply only to arbitral proceedingscommenced on or after the commencement of the 2015 Amendment Act andto court proceedings arising out of or in relation to such arbitral proceedings.2. The amended Section 26 shall have retrospective effect from the date ofcommencement of the 2015 Amendment Act.”

The High Level Committee recommended this after referring to divergent views takenby various High Courts. This included the interpretation given by the Calcutta HighCourt in Electrosteel Castings Limited v. Reacon Engineers (India) Pvt. Ltd. (A.P.No. 1710 of 2015 decided on 14.01.2016) and Tufan Chatterjee v. Rangan Dhar,(FMAT No. 47 of 2016 decided on 02.03.2016), the Madhya Pradesh High Court inPragat Akshay Urja Limited Company v. State of M.P and Ors., (Arbitration CaseNos. 48, 53 and 54/2014, decided on 30.06.2016), the Madras High Court in NewTirupur Area Development v. Hindustan Construction Co. Limited, (ApplicationNo. 7674 of 2015 in O.P. No. 931 of 2015) and the Bombay High Court in RendezvousSports World v. BCCI (Chamber Summons No. 1530 of 2015 in Execution Application(L) No. 2481 of 2015, Chamber Summons No. 1532 of 2015 in Execution Application(L) No. 2482 and Chamber Summons No. 66 of 2016 in Execution Application (L) No.2748 of 2015 decided on 08.08.2016).

In addition to this, the following decisions by various High Courts also deal with theapplicability of the Amendment Act:

i.Calcutta High Court: Nitya Ranjan Jena v. Tata Capital Financial ServicesLtd., GA No. 145/206 with AP No. 15/2016, West Bengal Power DevelopmentCorporation Ltd. v. Dongfang Electric Corporation, 2017 SCCOnline Cal

Aat, at this stage, for the interpretation of Section 26 of the AmendmentAct for two reasons: (i) Section 87, as ultimately enacted, may not be inthe form that is referred to in the press release; and (ii) proposed Bill,introducing new and different provision of law can hardly be the basisfor interpretation of provision of law as it now stands. Obviously,

B9388, Saraf Agencies v. Federal Agencies for State Property Management,AIR 2017 Cal. 65, Reliance Capital Ltd. v. Chandana Creations, 2016 SCCCal. 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 CompanyLtd. v. M/s. PBA Infrastructure Ltd., 2017 SCCOnline Bom (7840), EnerconGmbH v. Yogesh Mehra, 2017 SCC Bom 1744 and Global Aviation ServicesCPvt. Ltd. v. Airport Authority of India, Commercial Arbitration Petition No.434/2017,

iii.Madras High Court: Jumbo Bags Ltd. v. New India Assurance CompanyLimited, 2016 (3) CTC 769.

iv.Delhi High Court: ICI Soma JV v. Simplex Infrastructures Ltd., 2016 SCCOnline Del 5315, Tantia-CCIL (JV) v. Union of India, ARB. P. 615/2016,DRaffles Design International India Pvt. Ltd. v. Educomp ProfessionalEducation Ltd. and Ors., OMP (I) (COMM.) 23/2015, Orissa Concreteand Allied Industries Ltd. v. Union of India and Ors., Arb. P. No. 174 of2016, Takamol Industries Pvt. Ltd. v. Kundan Rice Mills Ltd., EX. P. 422/2014 & EA No. 739/2016, Apex Encon Projects Pvt. Ltd. v. Union of India &Anr., 2017 SCC Online Del. 9779 and Ratna Infrastructure Projects Pvt.Ltd. v. Meja Urja Nigam Pvt. Ltd., 2017 SCC Online Del 7808.Ev.Patna High Court: SPS v. Bihar Rajya Pul Nirman Nigam Ltd., RequestCase No. 14 of 2016 and Kumar and Kumar Associates v. Union of India,2017 1 PLJR 649.

vi.Gujarat High Court: OCI Corp. v. Kandla Export Corporation & Ors., 2017GLH (1) 383, Abhinav Knowledge Services Pvt. Ltd. v. BabasahebAmdebdkar Open University, AIR 2017 (NOC 1012) 344 and PallavVimalbhai Shah v. Kalpesh Sumatibhai Shah, O/IAAP/15/2017.Fvii.Kerala High Court: Shamsudeen v. Shreeram Transport Finance Ltd., ILR2017 Vol. 1, Ker. 370 and Jacob Mathew v. PTC Builders, 2017 (5) KHC 583.viii.Tripura High Court: Subhash Podder v. State of Tripura, 2016 SCC Tri. 500.ix.Chhatisgarh High Court: Orissa Concrete and Allied Industries Limited v.Union of India and Ors., Arbitration Application No. 34/2014.

x.Rajasthan High Court: Dwarka Traders Pvt. Ltd. v. Union of India, S.B.,Arbitration Application No. 95/2013 and Mayur Associates, Engineers andGContractors v. Gurmeet Singh & Ors., S.B. Arbitration Application No. 74/2013.

xi.Himachal Pradesh High Court: RSWM v. The Himachal Pradesh StateSupplies Co. Ltd., Arb Case No. 104/2016 and P.K. Construction Co. &Ors. v. Shimla Municipal Co. & Ors., Civil Writ Petition No. 2322/2016.xii.Punjab & Haryana High Court: Alpine Minmetals India Pvt. Ltd. v. NobleResources Ltd., LPA No. 917/2017.H

therefore, Shri Viswanathan’s approach leads to an amendment of Section26, as recommended by the Srikrishna Committee, and not interpretationthereof. For all these reasons, his argument must, therefore, be rejected.Shri Datar’s argument is more or less the same as Shri Viswanathan’s,and suffers from the same infirmity as Shri Viswanathan’s interpretation.Shri A. Krishnan, in bringing in the concept of “seat”, is again doingcomplete violence to the language of Section 26, as “place of arbitration”is well-known concept contained in Section 20 of the 1996 Act, whichfinds no mention whatsoever in Section 26 of the Amendment Act. Forthese reasons, his interpretation cannot also be accepted.30. Shri Neeraj Kishan Kaul, learned senior counsel appearing onbehalf of Respondents in SLP(C) Nos.19545-19546 of 2016, has arguedthat the first part of Section 26 does not apply to Court proceedings atall, thereby indicating that the Amendment Act must be given retrospectiveeffect insofar as Court proceedings in relation to arbitral proceedingsare concerned. For this purpose, he relied on Minister of Public Worksof the Government of the State of Kuwait (supra).

31. In that case, the question that arose was as to the correctconstruction of Section 7(1) of the U.K. Arbitration Act, 1975. The saidsection was given retrospective effect in applying the New YorkConvention to arbitration agreements that were entered into before theconvention was made applicable, for the reason that nobody had anaccrued right/defence which was taken away. All defences available ina common law action on the award would be available and continued tobe available. Hence, it was held that the award could always have beenenforced by one form of procedure and that it subsequently becameenforceable by an alternative form. This judgment can have no applicationto the present case, inasmuch as the Amendment Act, as applicable toCourt proceedings that arose in relation to arbitral proceedings, cannotbe said to apply to mere forms of procedure, but also includes substantivelaw applicable to such Court proceedings post the Amendment Act. Also,it is wholly fallacious to say that since the first part of Section 26 doesnot refer to Court proceedings in relation to arbitral proceedings, theAmendment Act is retrospective insofar as such proceedings areconcerned. The second part of Section 26 would then have to becompletely ignored, which, as has been seen hereinabove, applies toCourt proceedings in relation to arbitral proceedings only prospectively,i.e. if such Court proceedings are commenced after the Amendment

AAct comes into force. For these reasons, such an interpretation of Section26 is unacceptable.

32. Shri Chidambaram, appearing on behalf of some of theRespondents, has argued that the interpretation accepted by this Courtsupra is the correct interpretation. He has also argued that, alternatively,Bthe expression “in relation to arbitral proceedings” in the second part ofSection 26 would also include within it arbitral proceedings before thearbitral tribunal, as otherwise Section 26 would not apply the AmendmentAct to such arbitral proceedings. We are afraid that this alternativeinterpretation does not appeal to us, for the simple reason that when thefirst part of Section 26 makes it clear that arbitral proceedings commencedCbefore the Amendment Act would not be governed by the AmendmentAct, it is clear that arbitral proceedings that have commenced after theAmendment Act comes into force would be so governed by it, as hasbeen held by us above. The negative form of the language of the firstpart only becomes necessary to indicate that parties may otherwise agreeDto apply the Amendment Act to arbitral proceedings commenced evenbefore the Amendment Act comes into force. The absence of anyreference to Section 21 of the 1996 Act in the second part of Section 26of the Amendment Act is also good reason as to why arbitral proceedingsbefore an arbitral tribunal are not contemplated in the second part.

E33. Shri Sibal has argued that Section 26 is not savings clause atall and cannot be construed as such. According to the learned seniorcounsel, Section 26 manifests clear intention to destroy all rights, vestedor otherwise, which have accrued under the unamended 1996 Act. Weare unable to accept these submissions as it is clear that the intendmentof Section 26 is to apply the Amendment Act prospectively to arbitralFproceedings and to court proceedings in relation thereto. This approachagain does not commend itself to us.34. Dr. Singhvi has, however, argued that the approach indicatedby us above could be termed as an “intermediate approach”, i.e. it is anapproach which does not go to either of the extreme approaches of ShriGSundaram, Shri Viswanathan and Shri Datar or that of Shri Sibal. Further,according to the learned senior counsel, this approach has the merit ofboth clarity, as well as no anomalies arising as result, as it is clear thatthe Amendment Act is to be applied only prospectively with effect fromthe date of its commencement, and only to arbitral proceedings and toHcourt proceedings in relation thereto, which have commenced on or after

the commencement of the Amendment Act. We think this is the correctapproach as has already been indicated by us above.

35. The judgment in Thyssen (supra), was strongly relied uponby counsel on both sides. It is, therefore, important to deal with thisjudgment in little detail. In Thyssen (supra), Section 85 of the 1996Act came up for consideration. What is clear is that Section 85(2)(a)had the expression “in relation to arbitral proceedings” in both parts ofsub-section (2)(a). When speaking of the repealed enactments, it statedthat they will apply “in relation to” arbitral proceedings which commencedbefore the 1996 Act came into force, but that otherwise the 1996 Actshall apply “in relation to” arbitral proceedings, which commenced on orafter the 1996 Act came into force.

36. The judgment in Thyssen (supra) construed Section 85 asfollows:

“23. Section 85(2)(a) of the new Act is in two limbs: (1) provisionsof the old Act shall apply in relation to arbitral proceedings whichcommenced before the new Act came into force unless otherwiseagreed by the parties, and (2) the new Act shall apply in relationto arbitral proceedings which commenced on or after the newAct came into force. The first limb can further be bifurcatedinto two: (a) provisions of the old Act shall apply in relation toarbitral proceedings commenced before the new Act came intoforce, and (b) the old Act will not apply in such cases where theparties agree that it will not apply in relation to arbitral proceedingswhich commenced before the new Act came into force. Theexpression “in relation to” is of the widest import as held byvarious decisions of this Court in Doypack Systems (P)Ltd. [(1988) 2 SCC 299], Mansukhlal Dhanraj Jain [(1995) 2SCC 665], Dhanrajamal Gobindram [AIR 1961 SC 1285 :(1961) 3 SCR 1020] and Navin Chemicals Mfg. [(1993) 4 SCC320] This expression “in relation to” has to be given full effectto, particularly when read in conjunction with the words “theprovisions” of the old Act. That would mean that the old Act willapply to the whole gambit of arbitration culminating in theenforcement of the award. If it was not so, only the word “to”could have sufficed and when the legislature has used theexpression “in relation to”, proper meaning has to be given.This expression does not admit of restrictive meaning. The first

Alimb of Section 85(2)(a) is not limited saving clause. It savesnot only the proceedings pending at the time of commencementof the new Act but also the provisions of the old Act forenforcement 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 thisAct shall not apply to any reference pending at theCcommencement of this Act, to which the law in force immediatelybefore the commencement of this Act shall notwithstanding anyrepeal effected by this Act continue to apply.”

(at page 349)

DParagraph 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 wehave taken, it is not necessary for us to consider difference in the repealingprovisions as contained in Section 48 of the old Act and Section 85 of thenew Act. We may, however, note that under Section 48 of the old ActEthe concept is of “reference” while under the new Act it is“commencement”. Section 2(e) of the old Act defines “reference”. Thenunder Section 48 the word used is “to” and under Section 85(2)(a) theexpression is “in relation to”. It, therefore, also appears that it is notquite relevant to consider the provision of Section 48 of the old Act toFinterpret Section 85(2)(a).”

(at page 375) [Emphasis Supplied]

Paragraph 25 specifically states that Section 6 of the General ClausesGAct will not apply, inasmuch as different intention does appear fromthe plain language of Section 85(2)(a). Ultimately, after stating sevenconclusions in paragraph 22, this Court went on to state that enforcementof an award under the 1940 Act would be an accrued right for the reasonthat the challenge procedure under Section 30 of the 1940 Act waswider and completely different from the challenge procedure underH

Section 34 of the 1996 Act, and that to avoid confusion and hardship, itwould be important to refer to the expression “in relation to” as meaningthe entire gamut of arbitral proceedings, beginning with commencementand ending with enforcement of an award.

37. The judgment in Thyssen (supra) dealt with differentlyworded provision, and emphasized the difference in language betweenthe expression “to” and the expression “in relation to”. In reference tothe Acts which were repealed under Section 85, proceedings whichcommenced before the 1996 Act were to be governed by the repealedActs. These proceedings would be the entire gamut of proceedings, i.e.from the stage of commencement of arbitral proceedings until thechallenge proceedings against the arbitral award had been exhausted.Similar was the position with respect to the applicability of the 1996 Act,which would again apply to the entire gamut of arbitral proceedings,beginning with commencement and ending with enforcement of thearbitral award. It is clear, therefore, that Section 85(2)(a) has two majordifferences in language with Section 26: one, that the expression “inrelation to” does not appear in the first part of Section 26 and only theexpression “to” appears; and, second, that “commencement” in the firstpart of Section 26 is as is understood by Section 21 of the 1996 Act. Thesecond part of Section 85(2)(a) is couched in language similar to thesecond part of Section 26 with this difference, that Section 21 containedin the first part of Section 26 is conspicuous by its absence in the secondpart.

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 Courtconcluded:

“13. As stated in paragraph 22, Conclusion 1 without anyreservation provides that the provisions of the old Act shall applyin relation to the arbitral proceedings which have commencedbefore coming into force of the new Act. Conclusion 2, in ourview, is required to be read in context with Conclusion 1, that isto say, the phrase “in relation to arbitral proceedings” cannot begiven narrow meaning to mean only pendency of theproceedings before the arbitrator. It would cover not onlyproceedings pending before the arbitrator but would also coverthe proceedings before the court and any proceedings which are

required to be taken under the old Act for the award becoming adecree under Section 17 thereof and also appeal arisingthereunder. Hence, Conclusions 1 and 2 are to be read togetherwhich unambiguously reiterate that once the arbitral proceedingshave started under the old Act, the old Act would apply for theaward becoming decree and also for appeal arising thereunder.

14. Conclusion 3 only reiterates what is provided in varioussections of the Arbitration Act, which gives option to the partiesto opt for the procedure as per their agreement during the arbitralproceedings before the arbitrator. The phrase “unless otherwiseagreed by the parties” used in various sections, namely, 17, 21,23(3), 24(1), 25, 26, 29, 31, 85(2)(a) etc. indicates that it is opento the parties to agree otherwise. During the arbitral proceedings,right is given to the parties to decide their own procedure. So ifthere is an agreement between the parties with regard to theprocedure to be followed by the arbitrator, the arbitrator isrequired to follow the said procedure. Reason being, the arbitratoris appointed on the basis of the contract between the parties andis required to act as per the contract. However, this would notmean that in appeal parties can contend that the appellateprocedure should be as per their agreement. The appellateprocedure would be governed as per the statutory provisionsand parties have no right to change the same. It is also settledlaw that the right to file an appeal is accrued right that cannot betaken away unless there is specific provision to the contrary.There is no such provision in the new Act. In the present cases,the appeals were pending before the High Court under theprovisions of the old Act and, therefore, appeals are required tobe decided on the basis of the statutory provisions under the saidAct. Hence, there is no substance in the submission made by thelearned counsel for the appellant.”

(at pages 63-64)

The majority judgment in Milkfood Limited (supra), after referring tothe judgments in Thyssen (supra) and N.S. Nayak (supra), concludedthat, on the facts of that case, the 1940 Act will apply and not the 1996Act. These judgments are distinguishable for the same reasons, as theyonly follow and apply Thyssen (supra).

39. From reading of Section 26 as interpreted by us, it thusbecomes clear that in all cases where the Section 34 petition is filedafter the commencement of the Amendment Act, and an application forstay having been made under Section 36 therein, will be governed bySection 34 as amended and Section 36 as substituted. But, what is tohappen to Section 34 petitions that have been filed before thecommencement of the Amendment Act, which were governed by Section36 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 meantby “enforcement” in Section 36. On the one hand, it has been arguedthat “enforcement” is nothing but “execution”, and on the other hand, ithas been argued that “enforcement” and “execution” are differentconcepts, “enforcement” being substantive and “execution” beingprocedural in nature.40. At this stage, it is necessary to set out the scheme of the 1996Act. An arbitral proceeding commences under Section 21, unlessotherwise agreed by parties, when dispute arises between the partiesfor which request for the dispute to be referred to arbitration is receivedby the respondent. The arbitral proceedings terminate under Section32(1) by the delivery of final arbitral award or by the circumstancesmentioned in Section 32(2). The mandate of the arbitral tribunalterminates with the termination of arbitral proceedings, save and exceptfor correction and interpretation of the award within the bounds of Section33, or the making of an additional arbitral award as to claims presentedin the proceedings, but omitted from the award. Once this is over, incases where an arbitral award is delivered, such award shall be finaland binding on the parties and persons claiming under them, under Section35 of the 1996 Act. Under Section 36, both pre and post amendment,such award shall be “enforced” in accordance with the provisions of theCode of Civil Procedure, 1908, in the same manner as if it were decreeof the Court. It is clear that the scheme of the 1996 Act is materiallydifferent from the scheme of the 1940 Act. Under Section 17 of the1940 Act, once an award was delivered, the Court had to pronouncejudgment in accordance with the award, following which decree wouldbe drawn up, which would then be executable under the Code of CivilProcedure. Under Section 36 of the 1996 Act, the Court does not haveto deliver judgment in terms of the award, which is then followed by adecree, which is the formal expression of the adjudication between theparties. Under Section 36 of the 1996 Act, the award is deemed to be

Adecree and shall be enforced under the Code of Civil Procedure assuch.

41. This brings us to the manner of enforcement of decree underthe Code of Civil Procedure. decree is enforced under the Code ofCivil Procedure only through the execution process – see Order XXI ofBthe Code of Civil Procedure. Also, Section 36(3), as amended, refers tothe provisions of the Code of Civil Procedure for grant of stay of amoney decree. This, in turn, has reference to Order LXI, Rule 5 of theCode of Civil Procedure, which appears under the Chapter heading,“Stay of Proceedings and of Execution”. This being so, it is clear thatSection 36 refers to the execution of an award as if it were decree,Cattracting the provisions of Order XXI and Order LXI, Rule 5 of theCode of Civil Procedure and would, therefore, be provision dealingwith the execution of arbitral awards. This being the case, we need torefer to some judgments in order to determine whether executionproceedings and proceedings akin thereto give rise to vested rights, andDwhether they are substantive in nature.

42. In Lalji Raja and Sons v. Hansraj Nathuram, (1971) 1 SCC

721 at 728, this Court was concerned with judgment debtor’s right toresist execution of decree. Section 20(1)(b) of the Code of CivilProcedure (Amendment) Act, 1951 was extended to Madhya BharatEand other areas, as result of which the judgment debtor’s right to resistexecution of decree was protected. In this context, this Court held thatthe Amendment Act of 1951 made decrees, which could have beenexecuted only by courts in British India, executable in the whole of India.Stating that the change made was one relating to procedure only, thisCourt held:F“15. This provision undoubtedly protects the rights acquired andprivileges 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 inforce in Madhya Bharat before the extension of “the Code” canbe said to be right accrued under the repealed law. We do notthink that even by straining the language of the provision it canbe said that the non-executability of decree within particularterritory can be considered as privilege. Therefore the onlyquestion that we have to consider is whether it can be consideredas “right accrued” within the meaning of Section 20(1)(b) of

the Code of Civil Procedure (Amendment) Act, 1950. In thefirst place, in order to get the benefit of that provision, the non-executability of the decree must be right and secondly it mustbe right that had accrued from the provisions of the repealedlaw. It is contended on behalf of the judgment-debtors that whenthe decree was passed, they had right to resist the executionof the decree in Madhya Bharat in view of the provisions of theIndian Code of Civil Procedure (as adapted) which was in forcein the Madhya Bharat at that time and the same is vested right.It was further urged on their behalf that that right was preservedby Section 20(1)(b) of the Code of Civil Procedure (Amendment)Act, 1950. It is difficult to consider the non-executability of thedecree in Madhya Bharat as vested right of the judgment-debtors. The non-executability in question pertains to thejurisdiction of certain courts and not to the rights of the judgment-debtors. Further the relevant provisions of the Civil ProcedureCode in force in Madhya Bharat did not confer the right claimedby the judgment-debtors. All that has happened in view of theextension of “the Code” to the whole of India in 1951 is that thedecrees which could have been executed only by courts in BritishIndia are now made executable in the whole of India. The changemade is one relating to procedure and jurisdiction. Even before“the Code” was extended to Madhya Bharat the decree inquestion could have been executed either against the person ofthe judgment-debtors if they had happened to come to BritishIndia or against any of their properties situated in British India.The execution of the decree within the State of Madhya Bharatwas not permissible because the arm of “the Code” did not reachMadhya Bharat. It was the invalidity of the order transferringthe decree to the Morena Court that stood in the way of thedecree-holders in executing their decree in that court on the earlieroccasion and not because of any vested rights of the judgment-debtors. Even if the judgment-debtors had not objected to theexecution of the decree, the same could not have been executedby the court at Morena on the previous occasion as that courtwas not properly seized of the execution proceedings. By theextension of “the Code” to Madhya Bharat, want of jurisdictionon the part of the Morena Court was remedied and that court isnow made competent to execute the decree.

CDEFG

16. That provision to preserve the right accrued under repealedAct “was not intended to preserve the abstract rights conferredby the repealed Act.... It only applies to specific rights given toan individual upon happening of one or the other of the eventsspecified in statute” — See Lord Atkin’s observationsin Hamilton Gell v. White. [(1922) 2 KB 422]. The mere right,existing at the date of repealing statute, to take advantage ofprovisions of the statute repealed is not “right accrued” withinthe meaning of the usual saving clause — See Abbot v. Ministerfor 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) 3SCC 203 at 207, this Court, following Lalji Raja (supra), held as follows:

“8. Learned counsel appearing for the appellant howeversubmitted that since the Code of Civil Procedure was notapplicable to Goa the decree became inexecutable and this beingDa vested right could not be taken away by the application of theCode of Civil Procedure to Goa during the pendency of the appealbefore the Additional Judicial Commissioner. It seems to us thatthe right of the judgment debtor to pay up the decree passedagainst him cannot be said to be vested right, nor can theEquestion of executability of the decree be regarded as asubstantive vested right of the judgment debtor. fortiori theexecution proceedings being purely matter of procedure it iswell settled that any change in law which is made during thependency of the cause would be deemed to be retroactive inoperation and the appellate court is bound to take notice of theFchange in law.”

Since it is clear that execution of decree pertains to the realm ofprocedure, and that there is no substantive vested right in judgmentdebtor to resist execution, Section 36, as substituted, would apply evento pending Section 34 applications on the date of commencement of theGAmendment Act.

43. The matter can also be looked at from slightly differentangle. Section 36, prior to the Amendment Act, is only clog on the rightof the decree holder, who cannot execute the award in his favour, unlessthe conditions of this section are met. This does not mean that there is aHcorresponding right in the judgment debtor to stay the execution of such

an award. Learned counsel on behalf of the Appellants have, however,argued that substantive change has been made in the award, whichbecame an executable decree only afterthe Section 34 proceedingswere over, but which is now made executable as if it was decree withimmediate effect, and that this change would, therefore, take away avested right or accrued privilege in favour of the Respondents. It hasbeen argued, relying upon number of judgments, that since Section 36is part of the enforcement process of awards, there is vested right orat least privilege accrued in favour of the Appellants in the unamended1996 Act applying insofar as arbitral proceedings and court proceedingsin relation thereto have commenced, prior to the commencement of theAmendment Act. The very judgment strongly relied upon by senior counselfor the appellants, namely Garikapati Veeraya (supra), itself states inproposition (v) at page 515, that the vested right of appeal can be takenaway only by subsequent enactment, if it so provides specifically or bynecessary intendment and not otherwise. We have already held thatSection 26 does specifically provide that the court proceedings in relationto arbitral proceedings, being independent from arbitral proceedings,would not be viewed as continuation of arbitral proceedings, but wouldbe viewed separately. This being the case, it is unnecessary to refer tojudgments such as Union of India v. A.L. Rallia Ram, (1964) 3 SCR164 and NBCC Ltd. v. J.G. Engineering (P) Ltd., (2010) 2 SCC 385,which state that Section 34 proceeding is supervisory and not anappellate proceeding. Snehadeep Structures (P) Ltd. v. MaharashtraSmall-Scale Industries Development Corpn. Ltd., (2010) 3 SCC34 at 47-49, which was cited for the purpose of stating that Section 34proceeding could be regard as an “appeal” within the meaning of Section7 of the Interest on Delayed Payments To Small Scale and AncillaryIndustrial Undertakings Act, 1993, is obviously distinguishable on theground that it pertains to the said expression appearing in beneficialenactment, whose object would be defeated if the word “appeal” did notinclude Section 34 application. This is made clear by the aforesaidjudgment itself as follows:“36. On perusal of the plethora of decisions aforementioned,we are of the view that “appeal” is term that carries widerange of connotations with it and that appellate jurisdiction canbe exercised in variety of forms. It is not necessary that theexercise of appellate jurisdiction will always involve re-agitationof entire matrix of facts and law. We have already seen

BCDEF

in Abhayankar [(1969) 2 SCC 74] that even an order passedby virtue of limited power of revision under Section 115 of theCode is treated as an exercise of appellate jurisdiction, thoughunder that provision, the Court cannot go into the questions offacts. Given the weight of authorities in favour of giving such awide meaning to the term “appeal”, we are constrained todisagree with the contention of the learned counsel for therespondent Corporation that appeal shall mean only challengeto decree or order where the entire matrix of law and fact canbe re-agitated with respect to the impugned order/decree. Thereis no quarrel that Section 34 envisages only limited grounds ofchallenge to an award; however, we see no reason why thatalone should take out an application under Section 34 outside theambit of an appeal especially when even power of revision istreated as an exercise of appellate jurisdiction by this Court andthe Privy Council.

Dxxx xxx xxx

40. It may be noted that Section 6(1) empowers the buyer toobtain the due payment by way of any proceedings. Thus theproceedings that the buyer can resort to, no doubt, includesarbitration as well. It is pertinent to note that as opposed to Section6(2), Section 6(1) does not state that in case the parties chooseto resort to arbitration, the proceedings in pursuance thereof willbe governed by the Arbitration Act. Hence, the right context inwhich the meaning of the term “appeal” should be interpreted isthe Interest Act itself. The meaning of this term under theArbitration Act or the Code of Civil Procedure would have beenrelevant if the Interest Act had made reference to them. Forthis very reason, we also do not find it relevant that the ArbitrationAct deals with applications and appeals in two different chapters.We are concerned with the meaning of the term “appeal” in theInterest Act, and not in the Arbitration Act.”

44. Learned senior counsel appearing on behalf of the Respondents,has also argued that the expression “has been” in Section 36(2), asamended, would make it clear that the section itself refers to Section 34applications which have been filed prior to the commencement of theAmendment Act and that, therefore, the said section would apply, on itsHplain language, even to Section 34 applications that have been filed prior

to the commencement of the Amendment Act. For this purpose, thejudgment in State of Bombay v. Vishnu Ramchandra (1961) 2 SCR26, was strongly relied upon. In that judgment, it was observed, whiledealing with Section 57 of the Bombay Police Act, 1951, that theexpression “has been punished” is in the present perfect tense and canmean either “shall have been” or “shall be”. Looking to the scheme ofthe enactment as whole, the Court felt that “shall have been” is moreappropriate. This decision was referred to in paragraphs 60 and 61 ofWorkmen v. Firestone Tyre & Rubber Co. of India (P) Ltd., (1973)1 SCC 813 at 838 and the ratio culled out was that such expression mayrelate to past or future events, which has to be gathered from the context,as well as the scheme of the particular legislation. In the context inwhich Section 11A of the Industrial Disputes Act, 1947 was enacted,this Court held that Section 11A has the effect of altering the law byabridging the rights of the employer. This being so, the expression “hasbeen” would refer only to future events and would have no implicationto disputes prior to December 15, 1971. However, in significantparagraph, this Court held:“63. It must be stated at this stage that procedural law has alwaysbeen held to operate even retrospectively, as no party has vestedright in procedure.…”

45. Being procedural provision, it is obvious that the context ofSection 36 is that the expression “has been” would refer to Section 34petitions filed before the commencement of the Amendment Act andwould be one pointer to the fact that the said section would indeed apply,in its substituted form, even to such petitions. The judgment in L’OfficeCherifien Des Phosphates and another v. Yamashita-ShinnihonSteamship Co. Ltd., (1994) 1 AC 486 is instructive. new Section13A was introduced with effect from 1[st] January, 1992, by whichArbitrators were vested with the power of dismissing claim if there isno inordinate or an inexcusable delay on the part of the claimant inpursuing the claim. This Section was enacted because the House ofLords in certain decision had suggested that such delays in arbitrationcould not lead to rejection of the claim by itself. What led to theenactment of the Section was put by Lord Mustill thus:

“My Lords, the effect of the decision of the House in the BremerVulkan case, coupled with the inability of the courts to furnishany alternative remedy which might provide remedy for the

abuse of stale claims, aroused chorus of disapproval whichwas forceful, sustained and (so far as I am aware) virtuallyunanimous. There is no need to elaborate. The criticisms camefrom every quarter. Several Commonwealth countries hastilyintroduced legislation conferring on the court, or on the arbitrator,a jurisdiction to dismiss stale claims in arbitration. The history ofthe matter, and the reasons why the question was not as easy asit might have appeared, were summarized in an article publishedin 1989 by Sir Thomas Bingham (Arbitration International, vol.5, pp. 333 et seq.), and there is no need to rehearse them here.Taking account of various apparent difficulties the DepartmentalAdvisory Committee on Arbitration hesitated for time both asto the principle and as to whether the power to dismiss should bevested in the court or the arbitrator, but the pressure from allquarters became irresistible and in 1990 the Courts and LegalServices Act inserted, through the medium of Section 102, anew Section 13A in the Arbitration Act, 1950.”

(at page 522)

The question which arose in that case was whether delay that had takenplace before the Section came into force could be taken into account byan arbitrator in order to reject the claim in that case. The House ofELords held that given the clamor for change and given the practicalvalue and nature of the rights involved, it would be permissible to look atdelay caused even before the Section came into force. In his concludingparagraph, Lord Mustill held:

“In this light, I turn to the language of Section 13A construed, incase of doubt, by reference to its legislative background. Thecrucial words are: “(a) . . . there has been inordinate andinexcusable delay . . . “ Even if read in isolation these wordswould I believe be sufficient, in the context of Section 13A as awhole, to demonstrate that the delay encompasses all the delaywhich has caused the substantial risk of unfairness. If there wereany doubt about this the loud and prolonged chorus of complaintsabout the disconformity between practices in arbitration and inthe High Court, and the increasing impatience for something tobe done about it, show quite clearly that Section 13A was intendedto bite in full from the outset. If the position were otherwise itwould follow that, although Parliament has accepted the advice

of all those who had urged that this objectionable system shouldbe brought to an end, and has grasped the nettle and provided aremedy, it has reconciled itself to the continuation of arbitralproceedings already irrevocably stamped with risk of injustice.I find it impossible to accept that Parliament can have intendedany such thing, and with due respect to those who have suggestedotherwise I find the meaning of Section 13A sufficiently clear topersuade me that in the interests of reform Parliament was willingto tolerate the very qualified kind of hardship involved in givingthe legislation partially retrospective effect. Accordingly, I agreewith Beldam L.J. that the arbitrator did have the powers to whichhe purported to exercise. I would therefore allow the appeal andrestore the award of the arbitrator.”

46. In 2004, this Court’s Judgment in National AluminiumCompany (supra) had recommended that Section 36 be substituted, asit defeats the very objective of the alternative dispute resolution system,and that the Section should be amended at the earliest to bring about therequired change in law. It would be clear that looking at the practicalaspect and the nature of rights presently involved, and the sheer unfairnessof the unamended provision, which granted an automatic stay to executionof an award before the enforcement process of Section 34 was over(and which stay could last for number of years) without having to lookat the facts of each case, it is clear that Section 36 as amended shouldapply to Section 34 applications filed before the commencement of theAmendment Act also for the aforesaid reasons.

47. Both sides locked horns on whether proceeding under Section36 could be said to be proceeding which is independent of proceedingunder Section 34. In view of what has been held by us above, it isunnecessary for us to go into this by-lane of forensic argument.

48. However, Shri Viswanathan strongly relied upon theobservations made in paragraph 32 in Thyssen (supra) and the judgmentin Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573. It is no doubttrue that paragraph 32 in Thyssen (supra) does, at first blush, supportShri Viswanathan’s stand. However, this was stated in the context ofthe machinery for enforcement under Section 17 of the 1940 Act which,as we have seen, differs from Section 36 of the 1996 Act, because ofthe expression “in relation to arbitral proceedings”, which took in theentire gamut, starting from the arbitral proceedings before the arbitral

Atribunal and ending up with enforcement of the award. It was also in thecontext of the structure of the 1940 Act being completely different fromthe structure of the 1996 Act, which repealed the 1940 Act. In the presentcase, it is clear that “enforcement” in Section 36 is to treat the award asif it were decree and enforce it as such under the Code of CivilProcedure, which would only mean that such decree has to be executedBin the manner indicated. Also, stray sentence in judgment in particularcontext cannot be torn out of such context and applied in situationwhere it has been argued that enforcement and execution are one andthe same, at least for the purpose of the 1996 Act. In RegionalManager & Anr. v. Pawan Kumar Dubey (1976) 3 SCR 540, at 544Cit was held:“We think that the principles involved in applying Article 311(2)having been sufficiently explained in Shamsher Singh’s case(supra) it should no longer be possible to urge that SugharSingh’s case (supra) could give rise to some misapprehensionDof the law. Indeed, we do not think that the principles of lawdeclared and applied so often have really changed. But, theapplication of the same law to the differing circumstances andfacts of various cases which have come up to this Court couldcreate the impression sometimes that there is some conflictbetween different decisions of this Court. Even where thereEappears to some conflict, it would, we think, vanish when theratio decidendi of each case is correctly understood. It is therule deducible from the application of law to the facts andcircumstances of case which constitutes its ratio decidendiand not some conclusion based upon facts which may appear toFbe similar. One additional or different fact can make world ofdifference between conclusions in two cases even when thesame principles are applied in each case to similar facts.”

49. For the same reason, it is clear that the judgment in HameedJoharan (supra), which stated that execution and enforcement wereGdifferent concepts in law, was in the context of Article 136 of the LimitationAct, 1963, read with Section 35 of the Indian Stamp Act, 1899, which iswholly different. The argument in that case was that Article 136 of theLimitation Act prescribes period of 12 years for the execution of adecree or order, after it becomes enforceable. What was argued wasthat it would become enforceable only when stamped and Section 35 ofH

the Stamp Act was referred to for the said purpose. In this context, thisCourt held:

“And it is on this score it has been contended that the partitiondecree thus even though already passed cannot be acted upon,neither becomes enforceable unless drawn up and engrossed onstamp papers. The period of limitation, it has been contended inrespect of the partition decree, cannot begin to run till it isengrossed on requisite stamp paper. There is thus, it has beencontended, legislative bar under Section 35 of the Indian StampAct for enforceability of partition decree. Mr Mani contendedthat enforcement includes the whole process of getting an awardas well as execution since execution otherwise means dueperformance of all formalities, necessary to give validity to adocument. We are, however, unable to record our concurrencetherewith. Prescription of twelve-year period certain cannotpossibly be obliterated by an enactment wholly unconnectedtherewith. Legislative mandate as sanctioned under Article 136cannot be kept in abeyance unless the selfsame legislation makesa provision therefor. It may also be noticed that by the passing ofa final decree, the rights stand crystallised and it is only thereafterits enforceability can be had, though not otherwise.”

(at page 593)

It is for this reason that it was stated that enforceability of decreeunder the Limitation Act cannot be the subject matter of Section 35 ofthe Stamp Act. Therefore, Section 35 of the Stamp Act could not beheld to “overrun” the Limitation Act and thus, give complete go-by tothe legislative intent of Article 136 of the Limitation Act. Here again,observations made in completely different context have to be understoodin that context and cannot be applied to totally different situation.

50. As matter of fact, it was noticed that furnishing of stamppaper was an act entirely within the domain and control of the Appellantin that case, and any delay in the matter of furnishing the same cannotpossibly be said to stop limitation, as no one can take advantage of hisown wrong (see paragraph 13). As matter of fact, the Court held thatunless distinction was made between execution and enforcement, theresult in that case would lead to an “utter absurdity”. The Court held,“absurdity cannot be the outcome of an interpretation of Court orderand wherever there is even possibility of such absurdity, it would be

Aplain exercise of judicial power to repeal the same rather than encouragingit” (see paragraph 38).

51. Shri Viswanathan then referred us to this Court’s judgment inAkkayanaicker v. A.A.A. Kotchadainaidu and Anr. (2004) 12 SCC469, which, according to him, has followed the judgment in HameedBJoharan (supra). This judgment again would have no application for thesimple reason that the narrow point that was decided in that case waswhether the time period for execution of decree under Section 136 ofthe Limitation Act would start when the decree was originally made orwhether fresh period of limitation would begin after the decree wasamended having been substantially scaled down by Debt Relief Act.CThis Court held that as the original decree could not be enforced andonly the amended decree could be enforced, 12 years has to be countedfrom the date of the amended decree. It is clear that this judgment alsodoes not carry the matter further.

52. It was also argued that an award by itself had no legal efficacy,Duntil it became enforceable, and that, therefore, until it could be enforcedas decree of the Court, it would continue to remain suspended. Hereagain, the judgment in Satish Kumar (supra) is extremely instructive.The question in that case was as to whether, under the 1940 Act, anaward had any legal efficacy before judgment followed thereupon andEit was made into decree. Full Bench of the Punjab and HaryanaHigh Court held that until it is made rule of the Court, such an award iswaste paper. This Court strongly disagreed and followed its unreporteddecision in Uttam Singh Dugal & Co. v. Union of India as follows:

“It seems to us that the main reason given by the two Full BenchesFfor their conclusion is contrary to what was held by this Court inits unreported decision in Uttam Singh Dugal & Co. v. Unionof India [ Civil Appeal No. 162 of 1962—judgment delivered on11-10-1962] . The facts in this case, shortly stated, were thatUttam Singh Dugal & Co. filed an application under Section 33of the Act in the Court of the Subordinate Judge, Hazaribag.GThe Union of India, Respondent 1, called upon Respondent 2,Col. S.K. Bose, to adjudicate upon the matter in dispute betweenRespondent 1 and the appellant Company. The case of UttamSingh Dugal & Co.was that this purported reference toRespondent 2 for adjudication on the matters alleged to be inHdispute between them and Respondent 1 was not competent

because by an award passed by Respondent 2 on April 23, 1952all the relevant disputes between them had been decided. TheHigh Court held inter alia that the first award did not create anybar against the competence of the second reference. On appealthis Court after holding that the application under Section 33was competent observed as follows:

“The true legal position in regard to the effect of an award isnot in dispute. It is well settled that as general rule, all claimswhich are the subject-matter of reference to arbitration mergein the award which is pronounced in the proceedings beforethe arbitrator and that after an award has been pronounced,the rights and liabilities of the parties in respect of the saidclaims can be determined only on the basis of the said award.After an award is pronounced, no action can be started on theoriginal claim which had been the subject-matter of thereference. As has been observed by Mookerjee, J., in the caseof Bhajahari Saha Banikya v. Behary Lal Basak [33 Cal.881 at p. 898] the award is, in fact, final adjudication of aCourt of the parties own choice, and until impeached uponsufficient grounds in an appropriate proceeding, an award, whichis on the fact of it regular, is conclusive upon the merits of thecontroversy submitted, unless possibly the parties have intendedthat the award shall not be final and conclusive … in reality, anaward possesses all the elements of vitality, even though it hasnot been formally enforced, and it may be relied upon in alitigation between the parties relating to the same subject-matter”. This conclusion, according to the learned Judge, isbased upon the elementary principle that, as between the partiesand their privies, an award is entitled to that respect which isdue to the judgment of court of last resort. Therefore, if theaward which has been pronounced between the parties has infact, or can, in law, be deemed to have dealt with the presentdispute, the second reference would be incompetent. Thisposition also has not been and cannot be seriously disputed.”

This Court then held on the merits “that the dispute in regard tooverpayments which are sought to be referred to the arbitrationof Respondent 2 by the second reference are not new disputes;they are disputes in regard to claims which the Chief Engineershould have made before the arbitration under the first

Areference”. This Court accordingly allowed the appeal and setaside the order passed by the High Court.

This judgment is binding on us. In our opinion this judgment laysdown that the position under the Act is in no way different fromwhat it was before the Act came into force, and that an awardBhas some legal force and is not mere waste paper. If the awardin question is not mere waste paper but has some legal effectit plainly purports to or affects property within the meaning ofSection 17(1)(b) of the Registration Act.”

(at pages 248-249)

53. Justice Hegde, in separate concurring judgment, specificallystated that an award creates rights in property, but those rights cannotbe enforced until the award is made decree of the Court. The LearnedJudge put it very well when he said, “It is one thing to say that right isnot created, it is an entirely different thing to say that the right createdDcannot be enforced without further steps”. The Amendment Act hasonly made an award executable conditionally after it is made, like ajudgment of Court, the only difference being that decree would nothave to be formally drawn following the making of such award.54. Shri Viswanathan then argued, relying upon R. RajagopalEReddy v. Padmini Chandrasekharan (1995) 2 SCC 630, Fuerst DayLawson Ltd. v. Jindal Exports Ltd. (2001) 6 SCC 356, Sedco ForexInternational Drill. Inc. v. CIT (2005) 12 SCC 717 and Bank ofBaroda v. Anita Nandrajog (2009) 9 SCC 462, that clarificatoryamendment can only be retrospective, if it does not substantively changethe law, but merely clarifies some doubt which has crept into the law.FFor this purpose, he referred us to the amendments made in Section 34by the Amendment Act and stated that despite the fact that Explanations1 and 2 to Section 34(2) stated that “for the avoidance of any doubt, it isclarified”, this is not language that is conclusive in nature, but it is opento the Court to go into whether there is, in fact, substantive change thatGhas been made from the earlier position or whether doubt has merelybeen clarified. According to learned senior counsel, since fundamentalchanges have been made, doing away with at least two judgments ofthis Court, being Saw Pipes Ltd (supra) and Western Geco (supra),as has been held in paragraph 18 in HRD Corporation (Marcus Oiland Chemical Division) v. Gail (India) Limited (Formerly GasHAuthority of India Ltd.) 2017 SCC Online 1024, it is clear that such

amendments would only be prospective in nature. We do not expressany opinion on the aforesaid contention since the amendments made toSection 34 are not directly before us. It is enough to state that Section26 of the Amendment Act makes it clear that the Amendment Act, as awhole, is prospective in nature. Thereafter, whether certain provisionsare clarificatory, declaratory or procedural and, therefore, retrospective,is separate and independent enquiry, which we are not required toundertake in the facts of the present cases, except to the extent indicatedabove, namely, the effect of the substituted Section 36 of the AmendmentAct.

55. Learned counsel for the Appellants have painted lurid pictureof anomalies that would arise in case the Amendment Act were generallyto be made retrospective in application. Since we have already held thatthe Amendment Act is only prospective in application, no such anomaliescan possibly arise. It may also be noted that the choosing of Section 21as being the date on which the Amendment Act would apply to arbitralproceedings that have been commenced could equally be stated to giverise to various anomalies. One such anomaly could be that the arbitrationagreement itself may have been entered into years earlier, and disputesbetween the parties could have arisen many years after the said arbitrationagreement. The argument on behalf of the Appellants is that parties areentitled to proceed on the basis of the law as it exists on the date onwhich they entered into an agreement to refer disputes to arbitration. Ifthis were to be the case, the starting point of the application of theAmendment Act being only when notice to arbitrate has been receivedby the respondent, which as has been stated above, could be many yearsafter the arbitration agreement has been entered into, would itself giverise to the anomaly that the amended law would apply even to arbitrationproceedings years afterwards as and when dispute arises and noticeto arbitrate has been issued under Section 21. In such case, the parties,having entered into an arbitration agreement years earlier, could wellturn around and say that they never bargained for the change in law thathas taken place many years after, and which change will apply to them,since the notice, referred to in Section 21, has been issued after theAmendment 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 theprocess of interpretation must be so twisted as to negate both the plainlanguage as well as the object of the amending statute. On this groundalso, we do not see how an emotive argument can be converted into

Alegal one, so as to interpret Section 26 in manner that would be contraryto both its plain language and object.

56. However, it is important to remember that the AmendmentAct was enacted for the following reasons, as the Statement of Objectsand Reasons for the Amendment Act states:

“2. The Act was enacted to provide for speedy disposal of casesrelating to arbitration with least court intervention. With thepassage of time, some difficulties in the applicability of the Acthave been noticed. Interpretation of the provisions of the Act bycourts in some cases have resulted in delay of disposal ofarbitration proceedings and increase in interference of courts inarbitration matters, which tend to defeat the object of the Act.With view to overcome the difficulties, the matter was referredto the Law Commission of India, which examined the issue indetail and submitted its 176th Report. On the basis of the saidreport, the Arbitration and Conciliation (Amendment) Bill, 2003was introduced in the Rajya Sabha on 22nd December, 2003.The said Bill was referred to the Department-relatedParliamentary Standing Committee on Personnel, PublicGrievances, Law and Justice for examination and Report. Thesaid Committee, submitted its Report to the Parliament on 4thAugust, 2005, wherein the Committee recommended that sincemany provisions of the said Bill were contentious, the Bill maybe withdrawn and fresh legislation may be brought afterconsidering its recommendations. Accordingly, the said Bill waswithdrawn from the Rajya Sabha.

3. On reference made again in pursuance of the above, theLaw Commission examined and submitted its 246th Report on“Amendments to the Arbitration and Conciliation Act, 1996” inAugust, 2014 and recommended various amendments in the Act.The proposed amendments to the Act would facilitate andencourage Alternative Dispute Mechanism, especially arbitration,for settlement of disputes in more user-friendly, cost effectiveand expeditious disposal of cases since India is committed toimprove its legal framework to obviate in disposal of cases.

4. As India has been ranked at 178 out of 189 nations in theworld in contract enforcement, it is high time that urgent steps

are taken to facilitate quick enforcement of contracts, easyrecovery of monetary claims and award of just compensationfor damages suffered and reduce the pendency of cases in courtsand 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 wererequired to be taken to make necessary amendments to theArbitration and Conciliation Act, 1996 to attract foreign investmentby projecting India as an investor friendly country having soundlegal framework, the President was pleased to promulgate theArbitration and Conciliation (Amendment) Ordinance, 2015.

6. It is proposed to introduce the Arbitration and Conciliation(Amendment) Bill, 2015, to replace the Arbitration andConciliation (Amendment) Ordinance, 2015, which inter alia,provides for the following, namely:—

(i) to amend the definition of “Court” to provide that in the caseof international commercial arbitrations, the Court should be theHigh Court;

(ii) to ensure that an Indian Court can exercise jurisdiction togrant interim measures, etc., even where the seat of the arbitrationis outside India;

(iii) an application for appointment of an arbitrator shall bedisposed of by the High Court or Supreme Court, as the casemay be, as expeditiously as possible and an endeavour should bemade to dispose of the matter within period of sixty days;

(iv) to provide that while considering any application forappointment of arbitrator, the High Court or the Supreme Courtshall examine the existence of prima facie arbitration agreementand not other issues;

(v) to provide that the arbitral tribunal shall make its award withina period of twelve months from the date it enters upon thereference and that the parties may, however, extend such periodup to six months, beyond which period any extension can only begranted by the Court, on sufficient cause;

(vi) to provide that model fee Schedule on the basis of whichHigh Courts may frame rules for the purpose of determination

Aof fees of arbitral tribunal, where High Court appoints arbitratorin terms of section 11 of the Act;

(vii) to provide that the parties to dispute may at any stage agreein writing that their dispute be resolved through fast trackprocedure and the award in such cases shall be made within aBperiod of six months;

(viii) to provide for neutrality of arbitrators, when person isapproached in connection with possible appointment as anarbitrator;

(ix) to provide that application to challenge the award is to bedisposed of by the Court within one year.

7. The amendments proposed in the Bill will ensure that arbitrationprocess becomes more user-friendly, cost effective and lead toexpeditious disposal of cases.”

(Emphasis Supplied)

D57. The Government will be well-advised in keeping the aforesaidStatement of Objects and Reasons in the forefront, if it proposes toenact Section 87 on the lines indicated in the Government’s press releasedated 7[th] March, 2018. The immediate effect of the proposed Section 87would be to put all the important amendments made by the AmendmentAct on back-burner, such as the important amendments made to SectionsE28 and 34 in particular, which, as has been stated by the Statement ofObjects and Reasons, “…have resulted in delay of disposal of arbitrationproceedings and increase in interference of courts in arbitration matters,which tend to defeat the object of the Act”, and will now not be applicableto Section 34 petitions filed after 23[rd] October, 2015, but will be applicableFto Section 34 petitions filed in cases where arbitration proceedings havethemselves commenced only after 23[rd] October, 2015. This would meanthat in all matters which are in the pipeline, despite the fact that Section34 proceedings have been initiated only after 23[rd] October, 2015, yet, theold law would continue to apply resulting in delay of disposal of arbitrationproceedings by increased interference of Courts, which ultimately defeatsGthe object of the 1996 Act.[4] It would be important to remember that the246[th] Law Commission Report has itself bifurcated proceedings into

4 These amendments have the effect, as stated in HRD Corporation (Marcus Oil andChemical Division) v. Gail (India) Limited (Formerly Gas Authority of IndiaLtd.) 2017 SCC Online 1024 (at paragraph 18) of limiting the grounds of challenge toHawards as follows:

two parts, so that the Amendment Act can apply to Court proceedingscommenced on or after 23[rd] October, 2015. It is this basic scheme whichis adhered to by Section 26 of the Amendment Act, which ought not tobe displaced as the very object of the enactment of the Amendment Actwould otherwise be defeated.

58. At the fag end of the arguments, Shri Viswanathan, in rejoinder,raised another point which arises only in Civil Appeals arising out ofSLP(C) No. 8374-8375 of 2017 and 8376-8378 of 2017. According tohim, the impugned judgment, when it dealt with the majority award infavour of respondent Enercon GmbH, went behind the award in orderingexecution of portion of the award in favour of Enercon, when themajority award, in paragraph 331(3)(b), specifically ordered the 2[nd] and3[rd] defendants to pay to WWIL, which is joint venture company, sumof Rs.6,77,24,56,570/-. The majority award of the tribunal had specificallystated, in paragraph 298, as follows:

“Enercon’s claim is first pleaded as damages payable by theMehra directors directly to Enercon. It also pleads an alternativeclaim for such further or other relief as the Tribunal considersappropriate (paragraph 18 of the application of 13 December2015 and paragraph 323.4 of its closing written submission dated13 May 2016, as also its Statement of Claim of 30 September2014, at paragraph 102(M).) In the Tribunal’s view, given thatWWIL is only part owned by Enercon (hence Enercon’s

“…In fact, the same Law Commission Report has amended Sections 28 and34 so as to narrow grounds of challenge available under the Act. The judgmentin ONGC v. Saw Pipes Ltd, (2003) 5 SCC 705, has been expressly done awaywith. 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 theposition of law contained in Renusagar Power Plant Co. Ltd. v. GeneralElectric Co., (1994) Supp (1) SCC 644, where “public policy” will nowinclude only two of the three things set out therein, viz., “fundamental policyof Indian law” and “justice or morality”. The ground relating to “the interestof India” no longer obtains. “Fundamental policy of Indian law” is now to beunderstood as laid down in Renusagar (supra). “Justice or morality” has beentightened and is now to be understood as meaning only basic notions of justiceand morality i.e. such notions as would shock the conscience of the Court asunderstood in Associate Builders v. Delhi Development Authority, (2015) 3SCC 49. Section 28(3) has also been amended to bring it in line with thejudgment of this Court in Associate Builders (supra), making it clear that theconstruction of the terms of the contract is primarily for the arbitrator todecide unless it is found that such construction is not possible one.”

Apecuniary disadvantage resulting from the Mehra directors’wrongdoing is not the same as that of WWIL) and further thatWWIL remains the person most immediately affected by suchwrongdoing, the liability of the Mehra directors is best dischargedby requiring them to deciding upon such relief in favour of WWIL(as distinct from direct relief in favour of Enercon), the TribunalBsees no material disadvantage to Enercon, and, as for the Mehradirectors, no possible prejudice or other unfairness, whether as amatter of pleading, the form of relief or otherwise.”

It is only thereafter that the Tribunal awarded the aforesaid amount inparagraph 331(3)(b) as follows:C

“(b) Jointly and severally-

(i) to pay to WWIL the sum of INR 6,772,456,570, being theprofit made by Vish Wind on the sale of allotment rights to WWILin the years ending 31 March 2011 and 2012 together with interestthereon at the rate of 3% over European Central Bank rate fromDthose dates until the date of this Award.

(ii) To pay to the Claimants their legal and other costs in the sumof €3,794,970.”

59. It is thus Shri Viswanathan’s contention that it is the decreeholder alone who can execute such decree in its favour, and that in theEpresent case it is WWIL who is the decree holder, insofar as paragraph331(3)(b) is concerned and, that, therefore, Enercon’s ChamberSummons, to execute this portion of the award, is contrary to the Codeof Civil Procedure as well as number of judgments construing theCode.F

60. On the other hand, the submission of the other side is that theMehra brothers, who are the 2[nd] and 3[rd] defendants in the arbitrationproceedings, are in control and management of WWIL, and havewrongfully excluded Enercon from such control and management.WWIL, therefore, will never put this decree into execution. This beingGso, the interest of justice requires that we should not interfere with theHigh Court judgment as there is no person that would be in position toenforce the award apart from Enercon.

61. We are of the opinion that even though the High Court maynot be strictly correct in its appreciation of the law, yet it has attemptedHto do justice on the facts of the case as follows:

“These last words are important. If what Mr. Mehta says iscorrect and the decree was in favour of WWIL and not Enercon,that necessarily posits rejection of Enercon’s claim for damagesand, therefore, material disadvantage to Enercon. But this isnot what the Arbitral Tribunal did at all. It accepted Enercon’splea. It accepted its argument that the Mehras were guilty ofwrongdoing. It accepted that the Mehras were liable to makegood any advantage or benefit they have received. The ArbitralTribunal merely changed the vehicle or direction by which thatrecompense, restitution or recovery was to be made. Thenomenclature is immaterial. Given the nature of disputes, indeed,WWIL could never put this decree into execution. It never soughtthis relief. It could not have. This is not in fact, as paragraph 298,says relief in favour of WWIL at all although WWIL maybenefit from it. It is relief and decree in favour of and only ofEnercon.”

In this view of the matter, we do not think it appropriate, in the interest ofjustice, to interfere with the impugned judgment on this count.

62. In view of the above, the present batch of appeals is dismissed.A copy of the judgment is to be sent to the Ministry of Law and Justiceand the Learned Attorney General for India in view of what is stated inparagraphs 56 and 57 supra.

Nidhi Jain Appeals dismissed.