Amendment to Arbitration & Conciliation Act, 1996 to have retrospective effect on pending post-award court proceedings

Bombay High Court: In the case where Board of Control for Cricket in India (BCCI) challenged both the arbitral awards ordered against it, by filing applications under the Arbitration and Conciliation Act, 1996, an amendment was brought to the Act subsequently. The Bench of R.P. SondurBaldota, J., dismissing the applications upheld the validity of the amended Act over the previous one, even in cases that were filed before the commencement of the amended Act.

In the instant case, BCCI had filed the applications under Section 34 of the Arbitration Act, as a consequence, under Section 36 execution of the arbitral awards could not take place until and unless the applications were dismissed. However, on 23rd October, 2015, the amended Act came into force, under which Section 36 was repealed and a new Section 36 was introduced due to which under clause (2), the filing of such application would not by itself render the award unenforceable, unless the Court grants an order of stay of operation. The Act (amended) also contained a saving section i.e, Section 26. BCCI contended that as the applications were filed prior to promulgation of the Arbitration Ordinance, the same would be governed by Section 36 of the Arbitration Act, prior to its amendment. Therefore, the two arbitral awards will become enforceable against it, only if and when, the petitions are dismissed.

The Court discussed a plethora of judgments and finally came to the conclusion that the amended Section 36 lifts the shadow over the right of the award holder, his disability gets removed and at the same time, the provision enables the award-debtor to apply to the Court to make the award inexecutable pending his application, by way of an interim relief. It makes no difference if the application under Section 34 filed was prior to 23rd October, 2015 or not, the same cannot be said to be prejudicial to the award-debtor. [M/s Rendezvous Sports World v. The Board of Control for Cricket, 2016 SCC OnLine Bom 6064,  decided on 14-6-2016]

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