In a recent judgment, the Apex Court ruled that the Arbitration and Conciliation (Amendment) Act, 2015 will be applicable in those arbitral proceedings that have commenced under Section 21 of the Arbitration and Conciliation Act, 1996 and on Court proceedings which have commenced on or after the Amendment Act came into force.
The said ruling was delivered by the Supreme Court in the judgment of Board of Control for Cricket in India vs. Kochi Cricket Pvt. Ltd, Civil Appeal Nos. 19545-19546 of 2016, decided on 16.03.2018.
The question before the Hon’ble Court was whether Section 36, as amended by Arbitration Amendment Act, 2015, will affect the application under Section 34 of the Arbitration Act in its original or the amended form. The 2015 amendment to Section 36 clarified that the mere filing of appeal would not amount to stay of enforcement proceedings. The amended proviso stated that the stay will only be conditional to furnishing of security if the award relates to payment of money. Before the enforcement of the Amendment Act of 2015, the enforcement of award could be stayed by filing of an appeal against the said award.
The Apex Court has interpreted Section 26 of the Amendment Act of 2015 in two parts. It was held that the first part of the Section 26 is negative in nature and provides when the Amendment Act of 2015 will not be applicable; and the second part, being positive, provides when the Amendment Act will be applicable. The first part is only in reference to arbitral proceedings and not court proceedings, i.e. proceedings controlled by Section 21 of the Arbitration and Conciliation Act, 1996; whereas the second part applied only to court proceedings “in relation to” arbitral proceedings. Therefore, the Hon’ble Court has bifurcated that Section 26 of the Amendment Act, 2015 in two part, wherein its first part is applicable only on arbitration proceedings and the second part is applicable on court proceedings relating to arbitral proceedings.