Arbitration and Conciliation Act: Proposed amendment by govt to put earlier changes on backburner, warns SC

Arbitration and Conciliation Act: Proposed amendment by govt to put earlier changes on backburner, warns SC

What has happened?

The Supreme Court has warned that an amendment being proposed by the Centre to the Arbitration and Conciliation Act may ultimately have the effect of putting on the backburner changes made to the Act in 2015.

Background

Government’s plan to introduce a new Section 87 in the Act

Proposed Section 87

The proposed section 87 which intends “to clarify that unless parties agree otherwise the Amendment Act 201 shall not apply to

• Arbitral proceedings which have commenced before the commencement of the Amendment Act of 2015
• Court proceedings arising out of or in relation to such arbitral proceeding irrespective of whether such court proceedings are commenced prior to or after the commencement of the Amendment Act of 2015 and shall apply only to Arbitral proceedings commenced on or after the commencement of the Amendment Act of 2015 and to court proceedings arising out of or in relation to such Arbitral proceedings.

Questions raised

The bench was dealing with appeals which raise the question whether the substitution made to Section 36 of the Arbitration Act by 2015 Amendment would apply even to appeals under Section 34 filed before October 23, 2015 when the amendment came into effect

Bench Answered

• 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.
• The Amendment Act is to be applied only prospectively with effect from the date of its commencement, and only to arbitral proceedings and to court proceedings in relation thereto, which have commenced on or after the commencement of the Amendment Act