The new amended Arbitration Act 2015 ('Amended
Act') was introduced on 23 October 2015 in the form of
an Ordinance. Since its inception, various High Courts and jurists
stood divided as to the applicability of the Amended Act and,
particularly, whether such amended provisions would apply to
proceedings instituted under the Arbitration and Conciliation Act
1996 ('Principal Act') because, at the
time of promulgation of the Ordinance, the Government had not
clarified whether the Act would have prospective application.
The issue of the applicability of the Act became a matter of
speculation and a clarification was sought by the Madras High Court
from the Central Government in Delphi TVS Diesel
Systems Ltd v Union of India1.
The question was repeatedly brought up before the other curts in
India as well. The Bombay High Court in Kochi Cricket
Pvt Ltd v The Board of Control for Cricket in
India2, issued notice to all litigants to
determine the question of whether the Amended Act would apply to
pending matters. The issue also became a point of contention in the
Parliament with members seeking a clarification on this matter.
Putting all speculation to rest, the Lok Sabha on 17 December
2015 passed the Arbitration (Amendment) Act and inserted §26
which mandated that the Amended Act would not apply to proceedings
instituted under the Principal Act unless agreed by the
Pursuant to the Parliament clarifying the issue, different High
Courts have taken the view that the Act applies prospectively. In
Jumbo Bags Ltd3, while dealing
with the appointment of an Arbitrator under the Amended Act, the
Chief Justice of the Madras High Court held that since the
arbitration commenced under the Principal Act, the procedure in the
Principal Act should be followed.
Recently, the High Court of Calcutta in Reliance
Capital v Chandra Creation4 held that the
Amended Act would not apply to proceedings instituted under the
Principal Act. The case involved the issue of whether pending a
§34 application execution of an award is automatically stayed.
While the position under the Principal Act was indeed that pending
a §34 application, the execution of an award is automatically
stayed. The Amended Act altered the position in that a party had to
file an application to specifically seek a stay and the court is
entitled to put parties to terms.
In its decision, the High Court relying upon judgments of the
co-ordinate bench of the Calcutta High Court in
Electrosteel Castings Limited v Reacon Engineers
(India) Private Limited5 and
Shri Nitya Ranjan Jena v Tata Capital Financial
Services Ltd6 ruled that since the
§34 application in the case was filed before the Amended Act
came in to force, the Amended Act would not be applicable to the
facts of the case by virtue of §26 of the Amended Act.
Accordingly, the award was automatically deemed to be stayed
pending the §34 application.
Despite the judgments of the Madras and Calcutta High Courts
some controversy persists on whether §26 of the Amended Act is
applicable prospectively to all proceedings under it. For instance
in the Kochi Cricket case, it has been
argued before the Bombay High Court that since §26 states that
the Act will apply prospectively to 'arbitral proceedings
commenced under section 21' of the Principal Act, the
prospective application of the Amended Act is limited to
proceedings before an arbitral tribunal alone and that the Act
would apply retrospectively to proceedings under §34 dealing
with a challenge to arbitration awards as the arbitration
proceedings are closed at the stage of challenge. Judgment in the
matter has been reserved and an order on the issue is expected
The lingering controversy notwithstanding the judgments of the
Calcutta and the Madras High Court have brought some clarity on the
issue of the applicability of the Amended Act. The judgment of the
Bombay High Court in the Kochi Cricket
case, should further clarify the issue. A final word on the matter
can be expected once the Supreme Court rules on the issue.
1. WP 37355 of 2015 decided on
2. Execution Application (L) No. 2482 of 2015
3. Jumbo Bags Ltd v New India Assurance Co Ltd
(Madras High Court) decided on 10.03.2016
4. EC 301/2012 decided on 17 May 2016
5. AP No. 1710/2015 decided on 14 January
6. AP No 15/2016 GA no 145/2016 decided on 2 March
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