Arbitration and Conciliation (Amendment) Act, 2015 is prospective in nature

Supreme Court: In the case where the Bench of RF Nariman and Navin Sinha, JJ was deciding the question as to the nature of the Arbitration and Conciliation (Amendment) Act, 2015, it was held:

“the Amendment Act is prospective in nature and will apply to those arbitral proceedings that are commenced, as understood by Section 21 of the Arbitration and Conciliation Act, 1996, on or after the Amendment Act, and to Court proceedings which have commenced on or after the Amendment Act came into force.”

Regarding the question as to whether Section 36 of the Arbitration and Conciliation Act, 1996, which was substituted by the Amendment Act, would apply in its amended form or in its original form to the appeals in question, the Court said that

“in all cases where the Section 34 petition is filed after the commencement of the Amendment Act, and an application for stay having been made under Section 36 therein, will be governed by Section 34 as amended and Section 36 as substituted.”

On the question relating to Section 34 petitions that have been filed before the commencement of the Amendment Act, which were governed by Section 36 of the old Act, the Court said:

“execution of a decree pertains to the realm of procedure, and that there is no substantive vested right in a judgment debtor to resist execution, Section 36, as substituted, would apply even to pending Section 34 applications on the date of commencement of the Amendment Act.”

The Court also directed that a copy of this judgment be given to the Ministry of Law and Justice:

“The Government will be well-advised in keeping the aforesaid Statement of Objects and Reasons in the forefront, if it proposes to enact Section 87 on the lines indicated in the Government’s press release dated 7th March, 2018. The immediate effect of the proposed Section 87 would be to put all the important amendments made by the Amendment Act on a back-burner, such as the important amendments made to Sections 28 and 34 in particular, which, as has been stated by the Statement of Objects and Reasons.”

The Court said that it is this basic scheme which is adhered to by Section 26 of the Amendment Act, which ought not to be displaced as the very object of the enactment of the Amendment Act would otherwise be defeated. [Board of Cricket Control of India v. Kochi Cricket Pvt. Ltd., 2018 SCC OnLine SC 232, decided on 16.03.2018]

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