The Supreme Court on Friday said it will look into the question of law regarding the applicability of the Arbitration (Amendment) Act to post-award proceedings pending before the courts.
A bench headed by Justice Dipak Mishra said that it would clarify within two weeks whether the new or the old arbitration law will apply to cases pending in the courts before commencement of the amended arbitration Act, which came into force on October 23, 2015. And posted the matter for hearing on September 6.
The question with regard to applicability of the amended law has been raised before the apex court in appeals filed by BCCI and others challenging the Bombay High Court’s June 22 decision that held that Section 36 of the Arbitration and Conciliation Act, 1996, as amended by the Arbitration and Conciliation (Amendment) Act, 2016, is applicable even in cases where an application under Section 34 of the Act had already been filed prior to the Amending Act having come into force.
However, the high courts of Delhi and Calcutta have taken contrary views on the issue.
There is “a sharp cleavage of judicial opinion on the issue of retrospective application of the Amending Act” and this requires the authoritative pronouncement by the apex court, BCCI stated in its appeal.
Under the unamended Act, if an application for setting aside an arbitral award was filed, such arbitral award could not be enforced until the application is refused. This prevented the award-holder from enjoying the fruits of his success merely because the unsuccessful party had filed an application against the award.
However, after the amendment to Section 36, an arbitral award now becomes enforceable on expiry of three months from the date on which it is made irrespective of whether an application for setting aside the arbitral award has been filed unless the court grants stay of operation of the arbitral award.