Holding

The amended Section 36 applies to Section 34 petitions filed before the Amendment Act, as the provision is prospective and the phrase “has been” refers to such petitions, allowing execution of the award as a decree.

Summary

The Board of Control for Cricket in India filed a Section 34 challenge to arbitral awards dated June 2015, and the award creditors sought execution. The award debtor argued that the pre‑amended Section 36 imposed an automatic stay on execution until the Section 34 petition was decided, while the High Court applied the amended Section 36, treating the award as a decree and allowing execution. The Supreme Court examined the construction of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015, determining that the amendment is prospective and applies to arbitral proceedings and related court proceedings that commenced on or after its commencement. It held that the phrase “has been” in the amended Section 36 indicates that the provision applies even to Section 34 petitions filed before the amendment, and that execution of an award is procedural, not a substantive vested right. Consequently, the appeals were dismissed, confirming that the amended Section 36 governs the execution of awards in the present cases.

Issues considered

The scope of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 and whether it applies prospectively to arbitral and court proceedings.
Whether the amended Section 36 applies to Section 34 petitions filed before the amendment came into force.
Whether the pre‑amended Section 36 creates an automatic stay of execution of an arbitral award.
The interpretation of the term “enforcement” versus “execution” in Section 36.

Legislation cited

Arbitration Act, 1940s. 48
Arbitration and Conciliation Act, 1996s. 21, s. 32, s. 33, s. 34, s. 35, s. 36
Arbitration and Conciliation (Amendment) Act, 2015s. 26, s. 36
Code of Civil Procedure, 1908s. Order LXI, s. Order XXI, s. Rule 5
General Clauses Act, 1897s. 6

Subjects

ArbitrationSection 26Section 36Section 34Prospective legislationEnforcement of arbitral awardExecution of awardVested rightsProcedural law

Judgment

[2018] 2 S.C.R. 829 829

BOARD OF CONTROL FOR CRICKET IN INDIA A
v.
KOCHI CRICKET PVT. LTD. AND ETC.
(Civil Appeal Nos.2879-2880 of 2018)
MARCH 15, 2018
B
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Arbitration and Conciliation (Amendment) Act, 2015: s. 26 –
Construction of – Application of s. 36 (substituted by the Amendment
Act), in its amended form or its original form to s.34 applications
for setting aside the arbitral award, filed prior to commencement of
the Amendment Act – On facts, passing of arbitral award – C
Application u/s.34 challenging the arbitral award, filed prior to
coming into force of the Amendment Act and few after the Amendment
Act came into force – Execution applications by the award creditor
– Dismissal of execution applications sought by award debtor stating
that old s.36 would be applicable, thus, there would be automatic D
stay to the execution of the awards until s.34 proceedings had been
decided – However, the Single Judge of the High Court held that
the amended s.36 would be applicable and execution of an award
would be as if it were a decree, there would be no automatic stay
and ordered execution – On appeal, held: Scheme of s.26 is clear
that the Amendment Act is to be applied only prospectively with E
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 – Further, s. 36 being a procedural provision, the context of the
Section is that the expression “has been” would refer to s.34 petitions F
filed before the commencement of the Amendment Act and indicates
that the said Section would apply, in its substituted form, even to
such petitions – Thus, s.36 as amended should apply to s.34
applications filed before the commencement of the Amendment Act
– Arbitration and Conciliation Act, 1996 – ss. 36 and 34.
G
Dismissing the appeals, the Court
HELD: 1.1 The scheme of Section 26 of the Arbitration
and Conciliation (Amendment) Act, 2015 is clear: that the
Amendment Act is prospective in nature, and will apply to those
arbitral proceedings that are commenced, as understood by
H
829
830 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Section 21 of the principal Act, on or after the Amendment Act,
and to Court proceedings which have commenced on or after the
Amendment Act came into force. [Para 25] [859-C-D]
1.2 On a reading of Section 26, it is found that the provision
is in two parts. The first part refers to the Amendment Act not
B applying to certain proceedings, whereas the second part
affirmatively applies the Amendment Act to certain proceedings.
The two parts are separated by the word ‘but’, which also shows
that the two parts are separate and distinct. It cannot be said that
the expression “but” means only that there is an emphatic
repetition of the first part of Section 26 in the second part of the
C said Section. The context of the word “but” in Section 26 cannot
bear the aforesaid meaning, but serves only to separate the two
distinct parts of Section 26. What will be noticed from the first
part, which states, “Nothing contained in this Act shall apply to
the arbitral proceedings commenced, in accordance with the
D provisions of section 21 of the principal Act, before the
commencement of this Act unless the parties otherwise agree…”
is that: (1) “the arbitral proceedings” and their commencement
is mentioned in the context of Section 21 of the principal Act; (2)
the expression used is “to” and not “in relation to”; and (3) parties
may otherwise agree. So far as the second part of Section 26 is
E concerned, namely, the part which reads, “…but this Act shall
apply in relation to arbitral proceedings commenced on or after
the date of commencement of this Act” makes it clear that the
expression “in relation to” is used; and the expression “the”
arbitral proceedings and “in accordance with the provisions of
F Section 21 of the principal Act” is conspicuous by its absence.
The expression “the arbitral proceedings” refers to proceedings
before an arbitral tribunal. These proceedings alone are referred
to, the expression “to” as contrasted with the expression “in
relation to” making this clear. Also, the reference to Section 21
of the 1996 Act, which appears in Chapter V, and which speaks of
G the arbitral proceedings commencing on the date on which a
request for a dispute to be referred to arbitration is received by
the respondent, would also make it clear that it is these
proceedings, and no others, that form the subject matter of the
first part of Section 26. Also, since the conduct of arbitral
H proceedings is largely procedural in nature, parties may
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 831
CRICKET PVT. LTD. AND ETC.

“otherwise agree” and apply the Amendment Act to arbitral A
proceedings that have commenced before the Amendment Act
came into force. In stark contrast to the first part of Section 26 is
the second part, where the Amendment Act is made applicable
“in relation to” arbitral proceedings which commenced on or after
the date of commencement of the Amendment Act. What is
B
conspicuous by its absence in the second part is any reference to
Section 21 of the 1996 Act. Whereas the first part refers only to
arbitral proceedings before an arbitral tribunal, the second part
refers to Court proceedings “in relation to” arbitral proceedings,
and it is the commencement of these Court proceedings that is
referred to in the second part of Section 26, as the words “in C
relation to the arbitral proceedings” in the second part are not
controlled by the application of Section 21 of the 1996 Act. Section
26, therefore, bifurcates proceedings, with a great degree of clarity,
into two sets of proceedings – arbitral proceedings themselves,
and Court proceedings in relation thereto. The reason why the
D
first part of Section 26 is couched in negative form is only to
state that the Amendment Act will apply even to arbitral
proceedings commenced before the amendment if parties
otherwise agree. If the first part of Section 26 were couched in
positive language (like the second part), it would have been
necessary to add a proviso stating that the Amendment Act would E
apply even to arbitral proceedings commenced before the
amendment if the parties agree. In either case, the intention of
the legislature remains the same, the negative form conveying
exactly what could have been stated positively, with the necessary
proviso. Obviously, “arbitral proceedings” having been subsumed
F
in the first part cannot re-appear in the second part, and the
expression “in relation to arbitral proceedings” would, therefore,
apply only to Court proceedings which relate to the arbitral
proceedings.[Paras 23-25][856-H; 857-A-H; 858-A-E; 589-A-C]
1.3 When the first part of Section 26 makes it clear that
arbitral proceedings commenced before the Amendment Act G
would not be governed by the Amendment Act, it is clear that
arbitral proceedings that have commenced after the Amendment
Act comes into force would be so governed by it. The negative
form of the language of the first part only becomes necessary to
indicate that parties may otherwise agree to apply the Amendment H
832 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Act to arbitral proceedings commenced even before the
Amendment Act comes into force. The absence of any reference
to Section 21 of the 1996 Act in the second part of Section 26 of
the Amendment Act is also a good reason as to why arbitral
proceedings before an arbitral tribunal are not contemplated in
the second part. It cannot be said that Section 26 manifests a
B
clear intention to destroy all rights, vested or otherwise, which
have accrued under the unamended 1996 Act. It is clear that the
intendment of Section 26 is to apply the Amendment Act
prospectively, with effect from the date of its commencement, to
arbitral proceedings and to court proceedings in relation thereto.
C [Paras 32-34] [866-C-D, E-F, H]
1.4 From a reading of Section 26 as interpreted, it becomes
clear 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
D governed by Section 34 as amended and Section 36 as substituted.
But, what is to happen 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? Would Section 36,
as substituted, apply to such petitions? To answer this question,
it is to be decided on what is meant by “enforcement” in Section
E 36. On the one hand, it has been argued that “enforcement” is
nothing but “execution”, and on the other hand, it has been
argued that “enforcement” and “execution” are different
concepts, “enforcement” being substantive and “execution”
being procedural in nature. [Para 39] [871-A-C]
F 1.5 An arbitral proceeding commences under Section 21,
unless otherwise agreed by parties, when a dispute arises
between the parties for which a request for the dispute to be
referred to arbitration is received by the respondent. The arbitral
proceedings terminate under Section 32(1) by the delivery of a
G final arbitral award or by the circumstances mentioned in Section
32(2). The mandate of the arbitral tribunal terminates with the
termination of arbitral proceedings, save and except for correction
and interpretation of the award within the bounds of Section 33,
or the making of an additional arbitral award as to claims presented
in the proceedings, but omitted from the award. Once this is over,
H in cases where an arbitral award is delivered, such award shall be
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 833
CRICKET PVT. LTD. AND ETC.

final and binding on the parties and persons claiming under them, A
under Section 35 of the 1996 Act. Under Section 36, both pre and
post amendment, such award shall be “enforced” in accordance
with the provisions of the Code of Civil Procedure, 1908, in the
same manner as if it were a decree of the Court. It is clear that
the scheme of the 1996 Act is materially different from the scheme
B
of the 1940 Act. Under Section 17 of the 1940 Act, once an award
was delivered, the Court had to pronounce judgment in accordance
with the award, following which a decree would be drawn up, which
would then be executable under the Code of Civil Procedure.
Under Section 36 of the 1996 Act, the Court does not have to
deliver judgment in terms of the award, which is then followed by C
a decree, which is the formal expression of the adjudication
between the parties. Under Section 36 of the 1996 Act, the award
is deemed to be a decree and shall be enforced under the CPC
as such. Further, it is clear that Section 36 refers to the execution
of an award as if it were a decree, attracting the provisions of
D
Order XXI and Order LXI, Rule 5 CPC and would, therefore, be
a provision dealing with the execution of arbitral awards. Since it
is clear that 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 E
of commencement of the Amendment Act. [Para 40-42] [871-D-
H; 872-A-C; 874-F-G]
1.6 Section 36, prior to the Amendment Act, is only a clog
on the right of the decree holder, who cannot execute the award
in his favour, unless the conditions of this section are met. This F
does not mean that there is a corresponding right in the judgment
debtor to stay the execution of such an award. It has been held
that Section 26 does specifically provide that the court
proceedings in relation to arbitral proceedings, being independent
from arbitral proceedings would not be viewed as a continuation
of arbitral proceedings but would be viewed separately. [Para 43] G
[874-H; 875-A, D]
1.7 Being a procedural provision, it is obvious that the
context of Section 36 is that the expression “has been” would
refer to Section 34 petitions filed before the commencement of
the Amendment Act and would be one pointer to the fact that the H
834 SUPREME COURT REPORTS [2018] 2 S.C.R.

A said section would indeed apply, in its substituted form, even to
such petitions. The unamended Section 36 granted an automatic
stay (which could last for a number of years) on execution of an
award before the enforcement process of Section 34 was over
without having to look at the facts of each case. Due to the sheer
unfairness of this, Section 36 as amended should apply to
B
Section 34 applications filed before the commencement of the
amendment Act. [Paras 45-46] [877-E-F; 879-E]
1.8 In the instant case, it is clear that “enforcement” in
Section 36 is to treat the award as if it were a decree and enforce
it as such under the Code of Civil Procedure, which would only
C mean that such decree has to be executed in the manner indicated.
Also, a stray sentence in a judgment in a particular context cannot be
torn out of such context and applied in a situation where it has been
argued that enforcement and execution are one and the same, at
least for the purpose of the 1996 Act. [Para 48] [880-B-C]
D 1.9 Since the Amendment Act is only prospective in
application, no anomalies can possibly arise. The choosing of
Section 21 as being the date on which the Amendment Act would
apply to arbitral proceedings that have been commenced could
equally be stated to give rise to various anomalies. One such
E anomaly could be that the arbitration agreement itself may have
been entered into years earlier, and disputes between the parties
could have arisen many years after the said arbitration agreement.
The argument on behalf of the appellants is that parties are entitled
to proceed on the basis of the law as it exists on the date on
which they entered into an agreement to refer disputes to
F arbitration. If this were to be the case, the starting point of the
application of the Amendment Act being only when a notice to
arbitrate has been received by the respondent, which could be
many years after the arbitration agreement has been entered into,
would itself give rise to the anomaly that the amended law would
G apply even to arbitration proceedings years afterwards as and
when a dispute arises and a notice to arbitrate has been issued
under Section 21. In such a case, the parties, having entered into
an arbitration agreement years earlier, could well turn around
and say that they never bargained for the change in law that has
taken place many years after, and which change would apply to
H them, since the notice, referred to in Section 21, has been issued
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 835
CRICKET PVT. LTD. AND ETC.

after the Amendment Act has come into force. Cut off dates, by A
their very nature, are bound to lead to certain anomalies, but
that does not mean that the process of interpretation must be so
twisted as to negate both the plain language as well as the object
of the amending statute. On this ground also, it cannot be seen
how an emotive argument could be converted into a legal one, so
B
as to interpret Section 26 in a manner that would be contrary to
both its plain language and object. [Para 55] [885-C-H; 886-A]
1.10 The Government will be well-advised in keeping the
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 C
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, “…have resulted in delay of disposal of arbitration D
proceedings and increase in interference of courts in arbitration
matters, which tend to defeat the object of the Act”, and will now
not be applicable to Section 34 petitions filed after 23rd October,
2015, but will be applicable to Section 34 petitions filed in cases
where arbitration proceedings have themselves commenced only
after 23rd October, 2015. This would mean that in all matters which E
are in the pipeline, despite the fact that Section 34 proceedings
have been initiated only after 23rd October, 2015, yet, the old law
would continue to apply resulting in delay of disposal of arbitration
proceedings by increased interference of courts, which ultimately
defeats the object of the 1996 Act. The 246th Law Commission F
Report has itself bifurcated proceedings into two parts, so that
the Amendment Act can apply to Court proceedings commenced
on or after 23rd October, 2015. 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.[Para 57] [888-D- G
G; 889-A]
1.11 The Counsel for BCCI in SLP(C) No. 8374-75 of 2017
and 8376-78 of 2017 submitted that the impugned judgment, when
it dealt with the majority award in favour of respondent went
behind the award in ordering execution of a portion of the award H
836 SUPREME COURT REPORTS [2018] 2 S.C.R.

A in favour of respondent, when the majority award specifically
ordered the 2nd and 3 rd defendants to pay to the joint venture
company, a sum of Rs.6,77,24,56,570/-. It is only thereafter that
the tribunal awarded the said amount. It is thus the submission
that it is the decree holder alone who can execute such decree in
its favour, and that in the instant case it is WWIL who is the
B
decree holder and that, therefore, respondent’s Chamber
Summons, to execute this portion of the award, is contrary to the
CPC as well as a number of judgments construing the Code. On
the other hand, the submission of the other side is that the 2nd
and 3rd defendants in the arbitration proceedings, are in control
C and management of WWIL, and have wrongfully excluded
respondent from such control and management. WWIL, therefore,
will never put this decree into execution. This being so, the
interest of justice requires that the High Court judgment should
not be interfered as there is no person that would be in a position
to enforce the award apart from the respondent. [Paras 58-60]
D
889-B-C; 890-C, E-G]
1.12 Even though the High Court may not be strictly correct
in its appreciation of the law, yet it has attempted to do justice on
the facts of the case. It is not appropriate, in the interest of justice,
to interfere with the impugned judgment on this count. [Para 61]
E [890-H; 891-D]
Milkfood Ltd. v. GMC Ice Cream Pvt. Ltd. (2004) 7 SCC
288 : [2004] 3 SCR 854; Thyssen Stahlunion v. Steel
Authority of India (1999) 9 SCC 334 : [1999] 3 Suppl.
SCR 461; N.S. Nayak & Sons v. State of Goa (2003) 6
F SCC 56 : [2003] 1 Suppl. SCR 69 – distinguished.
Garikapati Veeraya v. N. Subbiah Choudhry [1957] SCR
488; National Aluminium Co. Ltd. v. Pressteel &
Fabrications (P) Ltd. (2004) 1 SCC 540; ONGC v. Saw
Pipes Ltd (2003) 5 SCC 705 : [2003] 3 SCR 691; ONGC
G Ltd. v. Western Geco International Ltd. (2014) 9 SCC
263 : [2014] 12 SCR 1; Satish Kumar v. Surinder Kumar
[1969] 2 SCR 244; Bhagat Ram Sharma v. Union of
India (1988) (Supp) SCC 30 : [1988] SCR 1034;
Hitendra Vishnu Thakur v. State of Maharashtra (1994)
4 SCC 602 : [1994] 1 Suppl. SCR 360; Transport and
H
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 837
CRICKET PVT. LTD. AND ETC.

Dock Workers’ Union & others v. New Dholera Steamship A
Ltd., Bombay and others, (1967) 1 LLJ 434; Kalawati
Devi Harlalka v. CIT (1967) 3 SCR 833; State of Punjab
v. Mohar Singh, [1955] 1 SCR 893; T.S. Baliah v. T.S.
Rengachari [1969] 3 SCR 65; Lalji Raja and Sons v.
Hansraj Nathuram, (1971) 1 SCC 721 : [1971] 3 SCR
B
815; Narhari Shivram Shet Narvekar v. Pannalal
Umediram (1976) 3 SCC 203: [1976] 3 SCR 149; Union
of India v. A.L. Rallia Ram [1964] 3 SCR 164; NBCC
Ltd. v. J.G. Engineering (P) Ltd., (2010) 2 SCC 385 :
[2010] 1 SCR 109; Snehadeep Structures (P) Ltd. v.
Maharashtra Small-Scale Industries Development Corpn. C
Ltd., (2010) 3 SCC 34 : [2010] 1 SCR 76; State of
Bombay v. Vishnu Ramchandra (1961) 2 SCR 26;
Workmen v. Firestone Tyre & Rubber Co. of India (P)
Ltd. (1973) 1 SCC 813 : [1973] 3 SCR 587; Hameed
Joharan v. Abdul Salam, (2001) 7 SCC 573: [2001] 1
D
Suppl. SCR 469; Regional Manager & Anr. v. Pawan
Kumar Dubey [1976] 3 SCR 540; Akkayanaicker v.
A.A.A. Kotchadainaidu and Anr. (2004) 12 SCC 469:
[2004] 4 Suppl. SCR 638; R. Rajagopal Reddy v. Padmini
Chandrasekharan (1995) 2 SCC 630 : [1995] 1 SCR
715; Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. E
(2001) 6 SCC 356 : [2001] 3 SCR 479; Sedco Forex
International Drill. Inc. v. CIT (2005) 12 SCC 717 :
[2005] 5 Suppl. SCR 302; Bank of Baroda v. Anita
Nandrajog (2009) 9 SCC 462; ONGC v. Western Geco
International Ltd. (2014) 9 SCC 263 : [2014] 12 SCR1;
F
HRD Corporation (Marcus Oil and Chemical Division)
v. Gail (India) Limited (Formerly Gas Authority of India
Ltd.) 2017 SCC Online 1024 – referred to.
Minister of Public Works of the Government of the State
of Kuwait v. Sir Frederick Snow and Partners (1984) 2
WLR 340; L’Office Cherifien Des Phosphates and G
another v. Yamashita-Shinnihon Steamship Co. Ltd.
(1994) 1 AC 486 – referred to.
Case Law Reference
[1999] 3 Suppl. SCR 461 distinguished Para 7
H
838 SUPREME COURT REPORTS [2018] 2 S.C.R.

A [2003] 1 Suppl. SCR 69 distinguished Para 7
[2004] 3 SCR 854 distinguished Para 7
[1957] SCR 488 referred to Para 7
(2004) 1 SCC 540 referred to Para 8
B [2003] 3 SCR 691 referred to Para 12
[2014] 12 SCR 1 referred to Para 12
[1969] 2 SCR 244 referred to Para 13
[1988] SCR 1034 referred to Para 17
C [1994] 1 Suppl. SCR 360 referred to Para 25
(1967) 1 LLJ 434 referred to Para 27
[1967] 3 SCR 833 referred to Para 27
[1955] 1 SCR 893 referred to Para 28
D [1969] 3 SCR 65 referred to Para 28
[1999] 3 Suppl. SCR 461 referred to. Para 38
[2003] 1 Suppl. SCR 69 referred to Para 38
[2004] 3 SCR 854 referred to Para 38
E [1971] 3 SCR 815 referred to Para 42
[1976] 3 SCR 149 referred to Para 42
[1964] 3 SCR 164 referred to Para 43
[2010] 1 SCR 109 referred to Para 43
F [2010] 1 SCR 76 referred to Para 43
[1961] 2 SCR 26 referred to Para 44
[1973] 3 SCR 587 referred to Para 44
[2001] 1 Suppl. SCR 469 referred to Para 48
G [1976] 3 SCR 540 referred to Para 48
[2004] 4 Suppl. SCR 638 referred to Para 51
[1995] 1 SCR 715 referred to Para 54
[2001] 3 SCR 479 referred to Para 54
H [2005] 5 Suppl. SCR 302 referred to Para 54
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 839
CRICKET PVT. LTD. AND ETC.

(2009) 9 SCC 462 referred to Para 54 A
[2014] 12 SCR 1 referred to Para 54
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2879-
2880 of 2018
From the Judgment and Order dated 14.06.2016 in Chamber B
Summons No. 1532 of 2015 in Execution Application (L) No. 2482 of
2015 in Arbitral Award dated 22.06.2015 and Chamber Summons No.
1530 of 2015 in Execution Application (L) No. 2481 of 2015 in Arbitral
Award dated 22.06.2015 of the High Court of Judicature at Bombay.
WITH C
C.A. NOS. 2881, 2882, 2883-2884, 2885-2886, 2887-2889, 2890-
2891 and 2892 of 2018.
Tushar Mehta, ASG, C.A. Sundaram, K.V. Viswanathan, P.
Chidambaram, Kapil Sibal, Dr. Abhishek Manu Singhvi, Arun Varma,
Ms. Vibha Dutta Makhija, Neeraj Kishan Kaul, Sajan Poovayya, Sr. D
Advs., Ms. Gauri Rasgotra, Indranil Deshmukh, Aditya Mehta, George
Varghese, Vineet Unnikrishnan, Ms. Nikitha Shenoy, Arjun Sreenivas,
Ms. Purnima Krishna, Mrs. Bihu Sharma, Abhinav Mukerji, Siddhant
Buxy, Ms. Rohini Musa, Avhishek Gupta, Zafar Inayat, Apoorv Tripathi,
Kartik Yadav, Ms. Neha Sarna, Ms. Olga Lumepereira, Arjun Sreenivas,
E
Ms. Sumita Sharma, M/s. Cyril Amarchand Mangaldas, Ravi Prakash,
Ms. Bani Dikshit, Ms. Iti Agarwal (For M/s. D.S.K. Legal), Jehangir
Jejeebhoy, Vivek A. Vashi, Ms. Kanika Sharma Goenka, Hrushi
Narvekar, Shaheda Madraswala, Utkarsh Srivastava, Mohd. Nizam
Pasha, Ms. Aastha Dhawan, Ashish Joshi, Ali R. Osmani, Chirag M.
Shroff, Mahesh Agarwal, Vivek Jain, Rishabh Parikh, Ms. Sumita Sharma, F
E. C. Agrawala, Bharat Sangal, Ms. Sanaya Dadacharji, Ms. Vidushi
Garg, Ms. Anindita Deka, Ms. Isha Gupta, Mitul Shelat, Mahesh Agarwal,
Ms. Aastha Mehta, Rajesh Kumar, Rohit Bhat, Rajat Nair, M. K. Maroria,
Nakul Dewan, Pradhuman Gohil, Mrs. Taruna Singh Gohil, Ashish Kabra,
Ms. Neelu Mohan, Himanshu Choubey, Zain Maqbool, Ms. Abhishikta
G
Mallick, Brijesh Kumar, Anirudh Krishnan, Balaji Srinivasan, Keerthikiran
Murali, Ms. Sella Visalakshi, Ms. Goda Raghavan, Ms. Vaishnavi
Subrahmanyam, Hitesh Singhvi, Ms. Srishti Govil, Mayank Kshirsagar,
Ms. Pratiksha Mishra, Abhishek Bharti, Sanjay Bansal, G. K. Bansal,
D.N. Ray, Lokesh K. Choudhary, Ms. Disha Ray, Dilip Kumar Nayak,
Mrs. Sumita Ray, Rajendra Barot, P. Rohan A. Rajadhyaksha, Ms. Tanvi H
840 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Dattani, Samar Kachwaha, Deepak Joshi, Ms. Liz Mathew, Priyadarshi
Banerjee, Pratibhanu S. Kharola, Ranjeeta Rohtagi, Prateek Kumar,
Ms. Anushka Sharda, Suksham Chauhan, Sanjeev K. Kapoor (For M/s.
Khaitan & Co.), Braj Kishore Mishra, Mrs. Shally Bhasin, Ms. Neha
Sangwan, Advs. for the appearing parties.
B The Judgment of the Court was delivered by
R. F. NARIMAN, J. 1. Leave granted.
2. The present batch of appeals raises an important question as to
the construction of Section 26 of the Arbitration and Conciliation
(Amendment) Act, 2015 (hereinafter referred to as the “Amendment
C Act”), which reads as follows:
“Section 26. Act not to apply to pending arbitral
proceedings.
Nothing contained in this Act shall apply to the arbitral
proceedings commenced, in accordance with the provisions of
D section 21 of the principal Act, before the commencement of
this Act unless the parties otherwise agree but this Act shall
apply in relation to arbitral proceedings commenced on or after
the date of commencement of this Act.”
3. The questions raised in these appeals require the mentioning of
E only a few important dates. In four of these appeals, namely, Board of
Control for Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors.
(SLP(C) No. 19545-19546 of 2016), Arup Deb & Ors. v. Global Asia
Venture Company (SLP(C) No. 20224 of 2016), M/s Maharashtra
Airports Development Company Ltd. v. M/s PBA Infrastructure
F Ltd. (SLP(C) No.5021 of 2017) and UB Cotton Pvt. Ltd. v. Jayshri
Ginning and Spinning Pvt. Ltd. (SLP(C) No.33690 of 2017), Section
34 applications under the Arbitration and Conciliation Act, 1996
(hereinafter referred to as the “1996 Act”) were all filed prior to the
coming into force of the Amendment Act w.e.f. 23rd October, 2015. In
the other four appeals, the Section 34 applications were filed after the
G Amendment Act came into force. The question with which we are
confronted is as to whether Section 36, which was substituted by the
Amendment Act, would apply in its amended form or in its original form
to the appeals in question.
4. The relevant facts of the first appeal namely, Board of Control
H for Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors. (SLP(C)
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 841
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

Nos. 19545-19546 of 2016), are as follows. A notice dated 18th January, A
2012 was sent by Respondent No.1 invoking arbitration under a franchise
agreement dated 12th March, 2011. A Sole Arbitrator was appointed,
who delivered two arbitral awards dated 22nd June, 2015 against the
Appellant and in favour of the Respondents. On 16th September, 2015,
the Appellants filed an application under Section 34 of the 1996 Act in
B
the Bombay High Court challenging the aforesaid arbitral awards. On
26th November, 2015, the Respondents filed two execution applications
in the High Court for payment of the amounts awarded under the two
awards, pending enforcement of such awards. These were resisted by
two Chamber Summons filed by the Appellants dated 3rd December,
2015, praying for dismissal of the aforesaid execution applications stating C
that the old Section 36 would be applicable, and that, therefore, there
would be an automatic stay of the awards until the Section 34 proceedings
had been decided. The Chamber Summons were argued before a
learned Single Judge, who, by the impugned judgment in Special Leave
Petition (Civil) No.19545-19546 of 2016, dismissed the aforesaid Chamber
D
Summons and found that the amended Section 36 would be applicable in
the facts of this case. This is how the appeal from the aforesaid judgment
has come before us.
5. As aforementioned, the skeletal dates necessary to decide
the present appeals in the other cases would only be that so far as two
of the other appeals are concerned, namely, Arup Deb & Ors. v. Global E
Asia Venture Company (SLP(C) No.20224 of 2016) and M/s
Maharashtra Airports Development Company Ltd. v. M/s PBA
Infrastructure Ltd. (SLP(C) No.5021 of 2017), the Section 34
applications were filed on 27th April, 2015, and 25th May, 2015 respectively
and the stay petitions or execution applications in those cases filed under F
Section 36 were dated 16th December, 2015 and 26th October, 2016
respectively. In U.B. Cotton Pvt. Ltd. v. Jayshri Ginning and
Spinning Pvt. Ltd. (SLP(C) No.33690 of 2017), the Section 34
application was filed on 22nd February, 2013 and the execution application
was filed in 2014, which was transferred, by an order dated 12th January,
2017, to the Commercial Court, Rajkot as Execution Petition No. 1 of G
2017. In the other cases, namely, Wind World (India) Ltd. v. Enercon
GMBH through its Director (SLP(C) Nos.8372-8373 of 2017),
Yogesh Mehra v. Enercon GMBH through its Director (SLP(C)
Nos.8376-8378 of 2017), Ajay Mehra v. Enercon GMBH through
its Director (SLP(C) Nos.8374-8375 of 2017), and Anuradha Bhatia H
842 SUPREME COURT REPORTS [2018] 2 S.C.R.

A v. M/s Ardee Infrastructure Pvt. Ltd. (SLP(C) Nos.9599-9600 of
2017), the Section 34 applications were filed after 23rd October, 2015,
viz., on 7th December, 2016 in the first two appeals, on 6th December,
2016 in the third appeal and on 4th January, 2016 in the last appeal.
6. Section 36, which is the bone of contention in the present appeals,
B is set out hereinbelow:
PRE-AMENDED PROVISION
“Section 36. Enforcement.
Where the time for making an application to set aside the arbitral
C award under section 34 has expired, or such application having
been made, it has been refused, the award shall be enforced
under the Code of Civil Procedure, 1908 (5 of 1908) in the same
manner as if it were a decree of the Court.”
AMENDED PROVISION
D “Section 36. Enforcement.
(1) Where the time for making an application to set aside the
arbitral award under section 34 has expired, then, subject to the
provisions of sub-section (2), such award shall be enforced in
accordance with the provisions of the Code of Civil Procedure,
E 1908, in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been
filed in the Court under section 34, the filing of such an application
shall not by itself render that award unenforceable, unless the
Court grants an order of stay of the operation of the said arbitral
F award in accordance with the provisions of sub-section (3), on a
separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of
the operation of the arbitral award, the Court may, subject to
such conditions as it may deem fit, grant stay of the operation of
G such award for reasons to be recorded in writing:
Provided that the Court shall, while considering the application
for grant of stay in the case of an arbitral award for payment of
money, have due regard to the provisions for grant of stay of a
money decree under the provisions of the Code of Civil Procedure,
H 1908 (5 of 1908).”
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 843
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

6. Wide ranging arguments have been made on behalf of the parties A
before us. Shri C.A. Sundaram, learned Senior Advocate, leading the
charge on behalf of the Appellants, has argued that Section 26 of the
Amendment Act consists of two parts. According to him, the second
part, which makes the Amendment Act applicable in relation to arbitral
proceedings commenced on or after the date of commencement of this
B
Act, is the principal part, whereas the first part of Section 26 is in the
nature of a proviso or exception. It is his submission, therefore, that so
far as the first part is concerned, Section 6 of the General Clauses Act,
1897 would be attracted, in which event the vested right to challenge
arbitral awards would continue by virtue of the said Section under the
old Act, which would, therefore, apply to the facts of all these cases. C
For this purpose, he relied upon certain passages in Thyssen
Stahlunion v. Steel Authority of India (1999) 9 SCC 334, N.S. Nayak
& Sons v. State of Goa (2003) 6 SCC 56, and Milkfood Ltd. v GMC
Ice Cream Pvt. Ltd. (2004) 7 SCC 288. Given the fact that the vested
right is preserved, the amendment is only prospective in nature, and for
D
this purpose, he has cited a large number of judgments, starting with the
celebrated judgment in Garikapati Veeraya v. N. Subbiah Choudhry
(1957) SCR 488. He then referred to a chart of the effect of the
amendments made in general by the Amendment Act, in which he divided
the amended sections into three parts, namely, those that are only
procedural, those that are only substantive and those that are procedural E
as well as substantive. In his submission, Section 36 is substantive in
nature, in that, in place of an automatic stay of the award under the old
regime, Order LXI, Rule 5 of the CPC will now be applicable. As a
result of this, instead of an automatic stay, a deposit of the entire amount
or substantial amount of the award would now have to be made in the
F
interim period between the award and the decision in the Section 34
application. He referred to the 246th Law Commission Report as well as
the debates leading to the Amendment Act to buttress his submissions.
He also referred to the report of a High Level Committee headed by
Justice B.N. Srikrishna, delivered on 30th July, 2017, in which, after
referring to the divergent views taken by the High Courts, the Committee G
recommended that the Amendment Act will not apply to arbitral
proceedings as well as Court proceedings which arise out of such arbitral
proceedings, where the arbitral proceedings themselves have commenced
in accordance with Section 21 before the commencement of the
Amendment Act. Concomitantly, according to the High Level Committee,
H
844 SUPREME COURT REPORTS [2018] 2 S.C.R.

A the Amendment Act will only apply to arbitral proceedings commenced
on or after the commencement of the Amendment Act and to Court
proceedings that arise out of or in relation to such arbitral proceedings.
8. Shri K.V. Viswanathan, learned Senior Advocate appearing on
behalf of the BCCI in Civil Appeal arising out of SLP(C) No.19546 of
B 2016, has argued that the expression “arbitral proceedings” in both parts
of Section 26 refers only to proceedings before an arbitrator and is the
same in both parts. Consequently, it is clear that it is only arbitral
proceedings that have commenced after 23rd October, 2015 and Court
proceedings in relation thereto, that will be governed by the Amendment
Act. If the arbitral proceedings have commenced under the old Act,
C then those proceedings as well as all Court proceedings in relation thereto,
would be governed only by the old Act. According to him, Section 6 of
the General Clauses Act would be attracted, insofar as Court proceedings
are concerned, when the first part of Section 26 is applied. According
to him, the second part would not become superfluous on his reading of
D Section 26, as the option given to the parties would be given only on
application of the first part and not the second. According to the learned
senior counsel, the judgment in Thyssen (supra) is determinative of the
present case, inasmuch as an entirely new challenge procedure under
Section 34 is laid down by the amendments made in 2015, somewhat
like the challenge procedure laid down in the original Section 34 of the
E 1996 Act, when contrasted with Section 30 of the Arbitration Act, 1940.
According to the learned senior counsel, party autonomy must be
respected, and this being the position, parties who have entered into
agreements in the expectation that the old regime will apply cannot
suddenly be foisted with a completely different regime under the
F Amendment Act. According to the learned senior counsel, Section 85
of the 1996 Act is similar to Section 26 of the Amendment Act and,
therefore, the judgment in Thyssen (supra) must apply on all fours.
The learned senior counsel also forcefully put to us a number of anomalies
that would arise if the amendment to Section 36 were to be given
retrospective operation. According to him, the right to be governed by
G the broad appellate/supervisory procedure found in sections 34 and 37
of the 1996 Act would be a vested right, resulting in the Amendment Act
not being applicable. Insofar as Section 36 is concerned, the learned
senior counsel made elaborate submissions on the difference between
enforceability and execution, and stated that whereas the former dealt
H with substantive rights, the latter dealt with procedural rights. Equally,
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 845
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

the expression “has been” contained in the amended Section 36(2) is A
purely contextual and equivalent to the expression “is”. For this, he has
cited certain judgments which we will refer to in due course. According
to the learned senior counsel, the decision in National Aluminium Co.
Ltd. v. Pressteel & Fabrications (P) Ltd. (2004) 1 SCC 540, which
exhorted the legislature to amend Section 36, cannot take the matter any
B
further, in that the said decision cannot be read to say that Section 36
should be substituted with retrospective effect.
9. Shri Tushar Mehta, learned Additional Solicitor General
appearing in SLP (C) No.5021 of 2017, supported the arguments of his
predecessor and added that, given a retrospective operation of Section
36, various anomalies would arise, which would lead to hardship and C
inconvenience and that, therefore, we should not impart retrospective
operation to the aforesaid provision.
10. Shri Arvind Datar, learned senior advocate appearing in SLP
(C) No.20224 of 2016, supported Shri Viswanathan in stating that the
amendments made by the Amendment Act were very far reaching and D
changed the basis of challenge to arbitral awards. It would not be fair to
retrospectively change the rules of the game insofar as such awards are
concerned. According to the learned senior counsel, the expression “in
relation to” that was used in Section 85 of the 1996 Act, as expounded in
Thyssen (supra), was because Section 85 repealed three enactments E
together, and not because it sought to refer to Court proceedings. He
reiterated that in the interest of clarity, the report of the High Level
Committee, headed by Justice B.N. Srikrishna referred to by Shri
Sundaram, was the correct position so that it clearly be delineated that
the moment arbitral proceedings commenced before the Amendment
Act, such “proceedings”, which would include all Court proceedings in F
relation thereto, would be governed by the old Act, and only arbitral
proceedings commenced after the Amendment Act came into force,
together with related Court proceedings, would all be governed by the
Amendment Act.
11. Shri Anirudh Krishnan, learned Advocate appearing for the G
intervenor in SLP (C) No.20224 of 2016, referred to Section 85A contained
in the 246th Law Commission Report which, according to him, was given
a go-by and was not followed in Section 26. He referred to the Law
Minister’s speech stating that the amendment must be given prospective
effect and further argued that the reason why the expression “in relation H
846 SUPREME COURT REPORTS [2018] 2 S.C.R.

A to” was used in the second part of Section 26 was because a distinction
was made on whether the seat of the arbitral tribunal was in India or
outside India. According to the learned counsel, since amendments have
been made in Part II of the 1996 Act as well, if a seat based categorization
is seen, the expression “in relation to” would not apply to Court
proceedings simpliciter, but to arbitral tribunals which have their seat
B
outside India. He further argued that Sections 34 and 36 are part of one
scheme and are the “appeal package” insofar as arbitral proceedings
are concerned and must, therefore, go along with the arbitral proceedings.
This being the position, it is clear that the pre-amendment position would
apply in case of arbitrations which commenced before the Amendment
C Act came into force.
12. Leading arguments for the other side, Shri Neeraj Kaul, learned
senior counsel appearing in SLP(C) Nos.19545-19546 of 2016,
emphasized that in the first part of Section 26, there is an absence of the
mention of Court proceedings. According to the learned senior counsel,
D this was of great significance and would, therefore, show that the
Amendment Act would retrospectively apply to Court proceedings, as
distinguished from arbitral proceedings. On a correct construction of
Section 26, according to the learned senior counsel, the second part of
Section 26 takes within its sweep both arbitral proceedings as well as
Court proceedings in relation thereto and would, therefore, apply to arbitral
E proceedings as well as Court proceedings in relation thereto, which have
commenced after the Amendment Act came into force. For this purpose,
he relied heavily on paragraph 23 in Thyssen (supra) and, submitted
that, therefore, on a true construction of Section 26, Section 34
proceedings that have commenced before the Amendment Act came
F into force would be governed by the Amendment Act, and arbitral
proceedings which commenced after the Amendment Act, together with
Section 34 applications made in relation thereto, would then be governed
under the second part of Section 26 of the Amendment Act. According
to the learned senior counsel, no vested right exists inasmuch as Section
34 proceedings are not appellate proceedings. In any case, Section 26
G evinces a contrary intention and would take away any such right assuming
a vested right is involved. He countered the arguments of Shri
Viswanathan, in particular, by stating that the original intent of the 1996
Act was to minimise Court intervention and to restrict the grounds of
challenge of arbitral awards, and inasmuch as the decisions of this Court
H in ONGC v. Saw Pipes Ltd (2003) 5 SCC 705 and ONGC Ltd.
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 847
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

v. Western Geco International Ltd. (2014) 9 SCC 263 had gone A
contrary to the original intention of the 1996 Act, all that the Amendment
Act did was to bring the 1996 Act back, in accordance with its original
intent, by nullifying the aforesaid judgments. He added that the ground
of patent illegality that had been added by the Amendment Act also
differs from the said ground as understood in the earlier case law, and
B
has been added only qua domestic and not international commercial
arbitrations. Learned senior counsel then argued that given the fact that
court proceedings in this country take an inordinately long time, the whole
object of the amendment to Section 36 would be stultified, if Section 36
is only to apply to court proceedings that result from arbitral proceedings,
which have commenced on and after the commencement of the C
Amendment Act. That this could never be the case is clear from a
judgment of the House of Lords, reported as Minister of Public Works
of the Government of the State of Kuwait v. Sir Frederick Snow
and Partners, (1984) 2 WLR 340, which is strongly relied upon.
Learned senior counsel also stated that there is no distinction between
D
execution and enforcement, and “enforcement” under Section 36, is
nothing but execution of an award, as if it were a decree under the Code
of Civil Procedure, 1908. He further argued that it is well settled that
execution proceedings are procedural in nature and would be retrospective
and, therefore, the substituted Section 36 would apply even in cases
where the Section 34 application is made before the commencement of E
the Amendment Act. Another argument was that the expression “has
been” contained in Section 36(2), as amended, would, in any case, refer
to Section 34 proceedings that have already been filed, even pre-
amendment, and for this purpose, he referred to certain judgments.
13. Shri P. Chidambaram, learned senior counsel appearing for F
the Respondents in SLP (C) Nos.8372-8373 of 2017, emphasised the
word “but” that appears in Section 26, which not only segregates the
first part of Section 36 from the second part, but also makes it clear that
the two parts apply to two different situations. The first part, according
to learned senior counsel, would apply to the arbitral proceedings
themselves i.e. from the Section 21 stage up to the Section 32 stage of G
the 1996 Act, whereas the second part would include all proceedings
that begin from the Section 21 stage and all court proceedings in relation
thereto. According to Shri Chidambaram, Section 36, in its original form,
is only a clog on the right of the decree holder. He argued that there is no
corresponding vested right in the judgment debtor to indefinitely delay H
848 SUPREME COURT REPORTS [2018] 2 S.C.R.

A proceedings and for this purpose, he cited several judgments. According
to the learned senior counsel, Section 36 proceedings are entirely
independent of Section 34 proceedings and the moment Section 36 speaks
of an award being enforceable under the Code of Civil Procedure as if
it were a decree, enforceability only means execution and nothing else.
He then referred to Satish Kumar v. Surinder Kumar, (1969) 2 SCR
B
244 to show that an award is not mere waste paper when it is delivered
and before it becomes a decree, as it decides the rights of the parties
and, therefore, being final and binding on parties, is a judgment delivered
between parties, which may become executable on certain conditions
being met, but which do not detract from the fact that the award itself
C has “vitality”.
14. Shri Kapil Sibal, learned senior counsel appearing on behalf of
the Respondents in SLP (C) Nos.8374-8375 of 2017, has argued before
us that the Statement of Objects and Reasons for the Amendment Act,
in particular paragraph 4 thereof, would make it clear that the Amendment
D Act was necessitated because of India’s poor performance in contract
enforcement among the nations in the world. For this reason, according
to the learned senior counsel, it is clear that Section 26 needs to be
interpreted in such a manner as would further the object of the
Amendment Act and that this being so, it is clear that Section 26 must be
read as being a provision which is not a savings provision at all, but a
E provision which destroys all rights, if any, that vested in the Appellants in
the 1996 Act as unamended. For this purpose, he cited certain judgments
which will be referred to in the course of our judgment.
15. Dr. A.M. Singhvi, learned senior counsel appearing on behalf
of the Respondents in SLP (C) Nos.8376-8378 of 2017, has stated that
F the correct construction of Section 26 would be the intermediate between
the extremes that have been canvassed before us by learned counsel
appearing on behalf of the Appellants. According to him, it is important
to emphasise that the first part applies only to arbitral proceedings before
an arbitral tribunal and the second part would apply only to court
G proceedings in relation thereto. This becomes clear from two things;
one, the expression “to” appearing in the first part as contrasted with the
expression “in relation to” appearing in the second part; and, two, the
presence of Section 21 of the 1996 Act in the first part and its absence
in the second part of Section 26. According to him, this would be the
correct interpretation of Section 26, which would result in no anomalies,
H
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 849
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

as it is clear that the date of commencement of an arbitral proceeding A
would be fixed with reference to Section 21 and the date of
commencement of a court proceeding would be fixed with reference to
the date on which the court proceeding is filed, and it is only arbitral
proceedings and court proceedings which are filed after the
commencement of the Amendment Act that would be so covered.
B
16. Shri Nakul Dewan, learned Advocate appearing on behalf of
the Respondent in SLP (C) No.20224 of 2016 has argued that the first
part of Section 26 speaks of “the arbitral proceedings” commenced in
accordance with the provisions of Section 21. The second part of Section
26 omits the word “the” as well as Section 21, making it clear that it is
the arbitral proceedings before the Arbitrator alone that is referred to in C
the first part of Section 26, as opposed to Court proceedings referred to
in the second part of Section 26, where the expression “in relation to
arbitral proceedings” does not contain the word “the”. According to
him, such interpretation is not contrary to the doctrine of party autonomy,
which is never conferred on any party without limits, there being non- D
derogable provisions in the 1996 Act from which parties, even by
agreement, cannot derogate. According to the learned counsel, each
and every Court proceeding under the 1996 Act is a separate and distinct
proceeding and it is the date of such proceeding alone which is relevant
for the purpose of determining whether the Amendment Act applies.
According to the learned counsel, there is no vested right to resist the E
execution of an award merely because an application for setting aside
the award is pending under Section 34 of the 1996 Act. Even on the
assumption that there is such a vested right, it is taken away, given the
clear legislative intent of Section 26 of the Amendment Act. Lastly, he
argued that on facts, clause 22.2(5) of the agreement between the parties F
automatically brought in all amendments to the 1996 Act and that,
therefore, Section 36 in its amended form would necessarily apply to the
facts in this case.
17. Having heard extensive and wide ranging arguments on the
reach of Section 26 of the Amendment Act, it will be important to first G
bear in mind the principles of interpretation of such a provision. That an
Amendment Act does include within it provisions that may be repealed
either wholly or partially and that the provisions of Section 6 of the General
Clauses Act would generally apply to such Amendment Acts is beyond
any doubt – See Bhagat Ram Sharma v. Union of India, 1988 (Supp)
H
850 SUPREME COURT REPORTS [2018] 2 S.C.R.

A SCC 30 at 40-41. That such a provision is akin to a repeal and savings
clause would be clear when it is read with Section 27 of the Amendment
Act and Section 85 of the 1996 Act, which are set out hereinbelow:
“Section 27. Repeal and savings.
(1) The Arbitration and Conciliation (Amendment) Ordinance,
B 2015, is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action
taken under the principal Act, as amended by the said Ordinance,
shall be deemed to have been done or taken under the
corresponding provisions of the principal Act, as amended by
C this Act.
xxx xxx xxx
Section 85. Repeal and savings.—
(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of
1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign
D Awards (Recognition and Enforcement) Act, 1961 (45 of 1961)
are hereby repealed.
(2) Notwithstanding such repeal,—
(a) the provisions of the said enactments shall apply in relation to
arbitral proceedings which commenced before this Act came
E into force unless otherwise agreed by the parties but this Act
shall apply in relation to arbitral proceedings which commenced
on or after this Act comes into force;
(b) all rules made and notifications published, under the said
enactments shall, to the extent to which they are not repugnant
to this Act, be deemed respectively to have been made or issued
F
under this Act.”
18. At this point, it is instructive to refer to the 246 th Law
Commission Report which led to the Amendment Act. This Report,
which was handed over to the Government in August, 2014, had this to
state on why it was proposing to replace Section 36 of the 1996 Act:
G
“AUTOMATIC STAY OF ENFORCEMENT OF THE
AWARD UPON ADMISSION OF CHALLENGE
43. Section 36 of the Act makes it clear that an arbitral award
becomes enforceable as a decree only after the time for filing a
petition under section 34 has expired or after the section 34 petition
H
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 851
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

has been dismissed. In other words, the pendency of a section A
34 petition renders an arbitral award unenforceable. The
Supreme Court, in National Aluminum Co. Ltd. v. Pressteel &
Fabrications, (2004) 1 SCC 540 held that by virtue of section 36,
it was impermissible to pass an Order directing the losing party
to deposit any part of the award into Court. While this decision
B
was in relation to the powers of the Supreme Court to pass such
an order under section 42, the Bombay High Court in Afcons
Infrastructure Limited v. The Board of Trustees, Port of Mumbai
2014 (1) Arb LR 512 (Bom) applied the same principle to the
powers of a Court under section 9 of the Act as well. Admission
of a section 34 petition, therefore, virtually paralyzes the process C
for the winning party/award creditor.
44. The Supreme Court, in National Aluminium, has criticized
the present situation in the following words:
“However, we do notice that this automatic suspension of the
execution of the award, the moment an application challenging D
the said award is filed under section 34 of the Act leaving no
discretion in the court to put the parties on terms, in our opinion,
defeats the very objective of the alternate dispute resolution
system to which arbitration belongs. We do find that there is a
recommendation made by the concerned Ministry to the E
Parliament to amend section 34 with a proposal to empower the
civil court to pass suitable interim orders in such cases. In view
of the urgency of such amendment, we sincerely hope that
necessary steps would be taken by the authorities concerned at
the earliest to bring about the required change in law.”
F
45. In order to rectify this mischief, certain amendments have
been suggested by the Commission to section 36 of the Act,
which provide that the award will not become unenforceable
merely upon the making of an application under section 34.
So far as the transitory provision, so described by the Report, is concerned, G
the Report stated:
“76. The Commission has proposed to insert the new section 85-
A to the Act, to clarify the scope of operation of each of the
amendments with respect to pending arbitrations/proceedings.
As a general rule, the amendments will operate prospectively,
H
852 SUPREME COURT REPORTS [2018] 2 S.C.R.

A except in certain cases as set out in section 85-A or otherwise
set out in the amendment itself.”
The Report then went on to amend Section 36 as follows:
“Amendment of Section 36
19. In section 36, (i) add numbering as sub-section (1) before
B
the words “Where the time” and after the words “Section 34
has expired,” delete the words “or such application having been
made, it has been refused” and add the words “then subject to
the provision of sub-section (2) hereof,”
(ii) insert sub-section “(2) Where an application to set aside the
C arbitral award has been filed in the Court under section 34, the
filing of such an application shall not by itself render the award
unenforceable, unless upon a separate application made for that
purpose, the Court grants stay of the operation of the award in
accordance with the provisions of sub-section (3) hereof;”
D (iii) insert sub-section “(3) Upon filing of the separate application
under subsection (2) for stay of the operation of the award, the
court may, subject to such conditions as it may deem fit, grant
stay of the operation of the award for reasons to be recorded in
writing.”
(iv) insert proviso “Provided that the Court shall while considering
E
the grant of stay, in the case of an award for money shall have
due regard to the provisions for grant of stay of money decrees
under the Code of Civil Procedure, 1908.”
[NOTE: This amendment is to ensure that the mere filing of an
application under section 34 does not operate as an automatic
F stay on the enforcement of the award. The Supreme Court in
National Aluminium Co. Ltd. v. Pressteel & Fabrications (P)
Ltd. and Anr, (2004) 1 SCC 540, recommends that such an
amendment is the need of the hour.]”1
1
As a matter of fact, the amended Section 36 only brings back Article 36(2) of the
UNCITRAL Model Law, which is based on Article 6 of the New York Convention, and
G
which reads as under:
“36(2). If an application for setting aside or suspension of an award has
been made to a court referred to in paragraph (1)(a)(v) of this article, the
court where recognition or enforcement is sought may, if it considers it
proper, adjourn its decision and may also, on the application of the
party claiming recognition or enforcement of the award, order the other
H party to provide appropriate security.”
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The transitory provision Section 85A was then set out as follows: A
“Insertion of Section 85A
A new section Section 85A on transitory provisions has been
incorporated.
Transitory provisions.— (1) Unless otherwise provided in the B
Arbitration and Conciliation (Amending) Act, 2014, the provisions
of the instant Act (as amended) shall be prospective in operation
and shall apply only to fresh arbitrations and fresh applications,
except in the following situations –
(a) the provisions of section 6-A shall apply to all pending C
proceedings and arbitrations. Explanation: It is clarified that where
the issue of costs has already been decided by the court/tribunal,
the same shall not be opened to that extent.
(b) the provisions of section 16 sub-section (7) shall apply to all
pending proceedings and arbitrations, except where the issue D
has been decided by the court/tribunal.
(c) the provisions of second proviso to section 24 shall apply to
all pending arbitrations.
(2) For the purposes of the instant section,—
(a) “fresh arbitrations” mean arbitrations where there has been E
no request for appointment of arbitral tribunal; or application for
appointment of arbitral tribunal; or appointment of the arbitral
tribunal, prior to the date of enforcement of the Arbitration and
Conciliation (Amending) Act, 2014.
(b) “fresh applications” mean applications to a court or arbitral F
tribunal made subsequent to the date of enforcement of the
Arbitration and Conciliation (Amending) Act, 2014.
[NOTE: This amendment is to clarify the scope of operation of
each of the proposed amendments with respect to pending
arbitrations/proceedings.]” G

19. The debates in Parliament in this context were referred to by
counsel on both sides. Shri T. Satpathy (Dhenkanal) stated:
“You have brought in an amendment to Section 25 (a) saying
that this Act will not be retrospective. When the Bill for judges’
H
854 SUPREME COURT REPORTS [2018] 2 S.C.R.

A pension and salary could be retrospective, why can you not amend
it with retrospective effect so that ONGC-RIL case could be
brought under this Act and let it be adjudicated as early as possible
within 18 months and let the people of this country get some
justice some time. Let us be fair to them.”
B To similar effect is the speech of Shri APJ Reddy, which reads as under:
“It is unclear whether the amended provisions shall apply to
pending arbitration proceedings. The Law Commission of India,
in its 246th Report, which recommended amendments to the
Arbitration & Conciliation Act, 1996, had proposed to insert a
C new Section 85-A to the Act, which would clarify the scope of
operation to each amendment with respect to pending arbitration
proceedings. However, this specific recommendation has not been
incorporated into the Ordinance. One of the reasons for bringing
about this ordinance is to instill a sense of confidence in foreign
investors in our judicial process, with regard to certainty of
D implementation in practice and ease of doing business. Therefore,
it is strongly urged to incorporate Section 85A as proposed by
the 246th Report of the Law Commission of India, where it clearly
states the scope of operation of the amended provisions.”
The Law Minister in response to the aforesaid speeches stated:
E
“Nobody has objected to this Bill but some of our friends have
observed certain things. They have said that the Bill is the need
of the hour and that a good Bill has been brought. A few
suggestions have been given by them. One of the suggestions
was that it should have retrospective effect. If the parties agree,
F then there will be no problem. Otherwise, it will only have
prospective effect.”
20. Finally, Section 26 in its present form was tabled as Section
25A at the fag end of the debates, and added to the Bill. A couple of
things may be noticed on a comparison of Section 85A, as proposed by
G the Law Commission, and Section 26 as ultimately enacted. First and
foremost, Section 85A states that the amendments shall be prospective
in operation and then bifurcates proceedings into two parts – (i) fresh
arbitrations, and (ii) fresh applications. Fresh arbitrations are defined as
various proceedings before an arbitral tribunal that is constituted, whereas
fresh applications mean applications to a Court or Tribunal, made
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subsequent to the date of enforcement of the Amendment Act. Three A
exceptions are provided by Section 85A, to which the Amendment Act
will apply retrospectively. The first deals with provisions relating to
costs, the second deals with the new provision contained in Section 16(7)
(which has not been adopted by the Amendment Act) and the third deals
with the second proviso to Section 24, which deals, inter alia, with oral
B
hearings and arguments on a day-to-day basis and the non-grant of
adjournments, unless sufficient cause is made out.
21. What can be seen from the above is that Section 26 has, while
retaining the bifurcation of proceedings into arbitration and Court
proceedings, departed somewhat from Section 85A as proposed by the
Law Commission. C

22. That a provision such as Section 26 has to be construed literally
first, and then purposively and pragmatically, so as to keep the object of
the provision also in mind, has been laid down in Thyssen (supra) in
paragraph 26 as follows:
D
“26. Present-day courts tend to adopt a purposive approach while
interpreting the statute which repeals the old law and for that
purpose to take into account the objects and reasons which led
to the enacting of the new Act. We have seen above that this
approach was adopted by this Court in M.M.T.C. Ltd.
case [(1996) 6 SCC 716]. Provisions of both the Acts, old and E
new, are very different and it has been so observed in Sundaram
Finance Ltd. case [(1999) 2 SCC 479]. In that case, this Court
also said that provisions of the new Act have to be interpreted
and construed independently and that in fact reference to the old
Act may actually lead to misconstruction of the provisions of the F
new Act. The Court said that it will be more relevant, while
construing the provisions of the new Act, to refer to the
UNCITRAL Model Law rather than the old Act. In the case
of Kuwait Minister of Public Works v. Sir Frederick Snow
and Partners [(1984) 1 All ER 733 (HL)] the award was given
before Kuwait became a party to the New York Convention G
recognised by an Order in Council in England. The House of
Lords held that though a foreign award could be enforced in
England under the (U.K.) Arbitration Act, 1975 as when the
proceedings for enforcement of the award were initiated in
England Kuwait had become a party to the Convention. It H
856 SUPREME COURT REPORTS [2018] 2 S.C.R.

A negatived the contention that on the date the award was given
Kuwait was not a party to the New York Convention.”
(at pages 370-371)
Similarly, in Milkfood Limited (supra) at 315, this Court, while construing
Section 85 of the 1996 Act, had this to say:
B
“70. Section 85 of the 1996 Act repeals the 1940 Act. Sub-section
(2) of Section 85 provides for a non obstante clause. Clause (a)
of the said sub-section provides for saving clause stating that the
provisions of the said enactments shall apply in relation to arbitral
proceedings which commenced before the said Act came into
C force. Thus, those arbitral proceedings which were commenced
before coming into force of the 1996 Act are saved and the
provisions of the 1996 Act would apply in relation to arbitral
proceedings which commenced on or after the said Act came
into force. Even for the said limited purpose, it is necessary to
D find out as to what is meant by commencement of arbitral
proceedings for the purpose of the 1996 Act wherefor also
necessity of reference to Section 21 would arise. The court is to
interpret the repeal and savings clauses in such a manner so as
to give a pragmatic and purposive meaning thereto. It is one
thing to say that commencement of arbitration proceedings is
E dependent upon the facts of each case as that would be subject
to the agreement between the parties. It is also another thing to
say that the expression “commencement of arbitration
proceedings” must be understood having regard to the context
in which the same is used; but it would be a totally different thing
F to say that the arbitration proceedings commence only for the
purpose of limitation upon issuance of a notice and for no other
purpose. The statute does not say so. Even the case-laws do not
suggest the same. On the contrary, the decisions of this Court
operating in the field beginning from Shetty’s
Constructions [(1998) 5 SCC 599] are ad idem to the effect
G that Section 21 must be taken recourse to for the purpose of
interpretation of Section 85(2)(a) of the Act. There is no reason,
even if two views are possible, to make a departure from the
decisions of this Court as referred to hereinbefore.”
23. All learned counsel have agreed, and this Court has found, on
H a reading of Section 26, that the provision is indeed in two parts. The
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first part refers to the Amendment Act not applying to certain proceedings, A
whereas the second part affirmatively applies the Amendment Act to
certain proceedings. The question is what exactly is contained in both
parts. The two parts are separated by the word ‘but’, which also shows
that the two parts are separate and distinct. However, Shri Viswanathan
has argued that the expression “but” means only that there is an emphatic
B
repetition of the first part of Section 26 in the second part of the said
Section. For this, he relied upon the Concise Oxford Dictionary on Current
English, which states:
“introducing emphatic repetition; definitely (wanted to see nobody,
but nobody)”.
C
Quite obviously, the context of the word “but” in Section 26 cannot bear
the aforesaid meaning, but serves only to separate the two distinct parts
of Section 26.
24. What will be noticed, so far as the first part is concerned,
which states, “Nothing contained in this Act shall apply to the arbitral D
proceedings commenced, in accordance with the provisions of section
21 of the principal Act, before the commencement of this Act unless the
parties otherwise agree…” is that: (1) “the arbitral proceedings” and
their commencement is mentioned in the context of Section 21 of the
principal Act; (2) the expression used is “to” and not “in relation to”; and
(3) parties may otherwise agree. So far as the second part of Section 26 E
is concerned, namely, the part which reads, “…but this Act shall apply in
relation to arbitral proceedings commenced on or after the date of
commencement of this Act” makes it clear that the expression “in relation
to” is used; and the expression “the” arbitral proceedings and “in
accordance with the provisions of Section 21 of the principal Act” is F
conspicuous by its absence.
25. That the expression “the arbitral proceedings” refers to
proceedings before an arbitral tribunal is clear from the heading of Chapter
V of the 1996 Act, which reads as follows:
“Conduct of Arbitral Proceedings” G
The entire chapter consists of Sections 18 to 27 dealing with the conduct
of arbitral proceedings before an arbitral tribunal. What is also important
to notice is that these proceedings alone are referred to, the expression
“to” as contrasted with the expression “in relation to” making this clear.
Also, the reference to Section 21 of the 1996 Act, which appears in H
858 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Chapter V, and which speaks of the arbitral proceedings commencing
on the date on which a request for a dispute to be referred to arbitration
is received by the respondent, would also make it clear that it is these
proceedings, and no others, that form the subject matter of the first part
of Section 26. Also, since the conduct of arbitral proceedings is largely
procedural in nature, parties may “otherwise agree” and apply the
B
Amendment Act to arbitral proceedings that have commenced before
the Amendment Act came into force.2
In stark contrast to the first part of Section 26 is the second part, where
the Amendment Act is made applicable “in relation to” arbitral proceedings
which commenced on or after the date of commencement of the
C Amendment Act. What is conspicuous by its absence in the second part
is any reference to Section 21 of the 1996 Act. Whereas the first part
refers only to arbitral proceedings before an arbitral tribunal, the second
part refers to Court proceedings “in relation to” arbitral proceedings,
and it is the commencement of these Court proceedings that is referred
D to in the second part of Section 26, as the words “in relation to the
arbitral proceedings” in the second part are not controlled by the
application of Section 21 of the 1996 Act. Section 26, therefore, bifurcates
proceedings, as has been stated above, with a great degree of clarity,
into two sets of proceedings – arbitral proceedings themselves, and Court
proceedings in relation thereto. The reason why the first part of Section 26
E
2
Section 29A of the Amendment Act provides for time limits within which an arbitral
award is to be made. In Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4
SCC 602 at 633, this Court stated:
“(iii) Every litigant has a vested right in substantive law but no such
right exists in procedural law.
(iv) A procedural statute should not generally speaking be applied
F retrospectively where the result would be to create new disabilities or
obligations or to impose new duties in respect of transactions already
accomplished.
(v) A statute which not only changes the procedure but also creates new
rights and liabilities shall be construed to be prospective in operation,
unless otherwise provided, either expressly or by necessary
implication.”
G It is, inter alia, because timelines for the making of an arbitral award have been laid
down for the first time in Section 29A of the Amendment Act that parties were given
the option to adopt such timelines which, though procedural in nature, create new
obligations in respect of a proceeding already begun under the unamended Act. This is,
of course, only one example of why parties may otherwise agree and apply the new
procedure laid down by the Amendment Act to arbitral proceedings that have commenced
before it came into force.
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is couched in negative form is only to state that the Amendment Act will A
apply even to arbitral proceedings commenced before the amendment if
parties otherwise agree. If the first part of Section 26 were couched in
positive language (like the second part), it would have been necessary to
add a proviso stating that the Amendment Act would apply even to arbitral
proceedings commenced before the amendment if the parties agree. In
B
either case, the intention of the legislature remains the same, the negative
form conveying exactly what could have been stated positively, with the
necessary proviso. Obviously, “arbitral proceedings” having been
subsumed in the first part cannot re-appear in the second part, and the
expression “in relation to arbitral proceedings” would, therefore, apply
only to Court proceedings which relate to the arbitral proceedings. The C
scheme of Section 26 is thus clear: that the Amendment Act is prospective
in nature, and will apply to those arbitral proceedings that are commenced,
as understood by Section 21 of the principal Act, on or after the
Amendment Act, and to Court proceedings which have commenced on
or after the Amendment Act came into force.
D
26. We now consider some of the submissions of learned counsel
for the parties as to what ought to be the true construction of Section 26.
According to Shri Sundaram, the second part of Section 26 should be
taken to be the principal part, with the first part being read as an exception
to the principal part. This is so that Section 6 of the General Clauses Act
then gets attracted to the first part, the idea being to save accrued rights. E
Section 6 applies unless a contrary intention appears in the enactment in
question. The plain language of Section 26 would make it clear that a
contrary intention does so appear, Section 26 being a special provision
having to be applied on its own terms.
27. Thus, in Transport and Dock Workers’ Union & others F
v. New Dholera Steamship Ltd., Bombay and others, (1967) 1 LLJ
434, a Five Judge Bench of this Court held:
“6. It was contended before us that as an appeal is a continuation
of the original proceeding the repeal should not affect the
enforcement of the provisions of the Ordinance in this case. G
Reliance is placed upon Section 6 of the General Clauses Act,
1897 wherein is indicated the effect of repeal of an enactment
by another. It is contended that as the Payment of Bonus
Ordinance has been repealed by Section 40(1), the consequences
envisaged in Section 6 of the General Clauses Act must follow H
860 SUPREME COURT REPORTS [2018] 2 S.C.R.

A and the present matter must be disposed of in accordance with
the Ordinance as if the Act had not been passed. It is submitted
that there was a right and a corresponding obligation to pay bonus
under Section 10 of the Ordinance and that right and obligation
cannot be obliterated because of the repeal of the Ordinance.
This argument is not acceptable because of the provisions of the
B
second sub-section of Section 40. That sub-section reads as
follows:
“40. Repeal and saving.
(1)***
C (2) Notwithstanding such repeal, anything done or any action
taken under the said Ordinance shall be deemed to have been
done or taken under this Act as if this Act had commenced on
the 29th May, 1965.”
Section 6 of the General Clauses Act applies ordinarily but it
D does not apply if a different intention appears in the repealing
Act. Here a different intention is made to appear expressly and
the special saving incorporated in the repealing Act protects only
anything done or any action taken under the Ordinance which is
deemed to have been done or taken under this Act as if the Act
E had commenced on 29th May, 1965. Nothing had been done
under the Ordinance and no action was taken which needs
protection; nor was anything pending under the Ordinance which
could be continued as if the Act had not been passed. There was
thus nothing which was to be saved after the repeal of the
Ordinance and this question which might have arisen under the
F Ordinance now ceases to exist.”
In Kalawati Devi Harlalka v. CIT (1967) 3 SCR 833, a repeal and
savings provision contained in Section 297 of the Income Tax Act, 1961
was held to evidence an intention to the contrary under Section 6 of the
General Clauses Act as follows:
G
“14. The learned counsel for the appellant submits that Parliament
had Section 6 of the General Clauses Act in view, and therefore
no express provision was made dealing with appeals and
revisions, etc. In our view, Section 6 of the General Clauses Act
would not apply because Section 297(2) evidences an intention
H to the contrary. In Union of India v. Madan Gopal Kabra [25
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ITR 5] while interpreting Section 13 of the Finance Act, 1950, A
already extracted above, this Court observed at p. 68:
“Nor can Section 6 of the General Clauses Act, 1897, serve to
keep alive the liability to pay tax on the income of the year
1949-50 assuming it to have accrued under the repealed State
law, for a “different intention” clearly appears in Sections 2 B
and 13 of the Finance Act read together as indicated above.”
It is true that whether a different intention appears or not must
depend on the language and content of Section 297(2). It seems
to us, however, that by providing for so many matters mentioned
above, some in accord with what would have been the result C
under Section 6 of the General Clauses Act and some contrary
to what would been the result under Section 6, Parliament has
clearly evidenced an intention to the contrary.”
28. Shri Sundaram’s submission is also not in consonance with the
law laid down in some of our judgments. The approach to statutes, which D
amend a statute by way of repeal, was put most felicitously by B.K.
Mukherjea, J. in State of Punjab v. Mohar Singh, 1955 1 SCR 893 at
899-900, thus:
“In our opinion the approach of the High Court to the question is
not quite correct. Whenever there is a repeal of an enactment, E
the consequences laid down in Section 6 of the General Clauses
Act will follow unless, as the section itself says, a different intention
appears. In the case of a simple repeal there is scarcely any
room for expression of a contrary opinion. But when the repeal
is followed by fresh legislation on the same subject we would
undoubtedly have to look to the provisions of the new Act, but F
only for the purpose of determining whether they indicate a
different intention. The line of enquiry would be, not whether the
new Act expressly keeps alive old rights and liabilities but whether
it manifests an intention to destroy them. We cannot therefore
subscribe to the broad proposition that Section 6 of the General G
Clauses Act is ruled out when there is repeal of an enactment
followed by a fresh legislation. Section 6 would be applicable in
such cases also unless the new legislation manifests an intention
incompatible with or contrary to the provisions of the section.
Such incompatibility would have to be ascertained from a
consideration of all the relevant provisions of the new law and H
862 SUPREME COURT REPORTS [2018] 2 S.C.R.

A the mere absence of a saving clause is by itself not material. It is
in the light of these principles that we now proceed to examine
the facts of the present case.”
(Emphasis Supplied)
This statement of the law has subsequently been followed in Transport
B and Dock Workers Union & Ors. v. New Dholera Steamships
Ltd., Bombay and Ors. (supra) at paragraph 6 and T.S. Baliah v.
T.S. Rengachari, 1969 3 SCR 65 at 71-72.
29. Equally, the suggested interpretation of Shri Viswanathan would
not only do violence to the plain language of Section 26, but would also
C ignore the words “in relation to” in the second part of Section 26, as well
as ignore the fact that Section 21 of the 1996 Act, though mentioned in
the first part, is conspicuous by its absence in the second part. According
to Shri Viswanathan, the expression “arbitral proceedings commenced”
is the same in both parts and, therefore, the commencement of arbitral
proceedings under Section 21 is the only thing to be looked at in both
D
parts. Thus, according to the learned senior counsel, if arbitral proceedings
have commenced prior to coming into force of the Amendment Act, the
said proceedings, together with all proceedings in Court in relation thereto,
would attract only the provisions of the unamended 1996 Act. Similarly,
when arbitral proceedings have commenced under Section 21 after the
E coming into force of the Amendment Act, those proceedings, including
all courts proceedings in relation thereto, would be governed by the
Amendment Act. This is not the scheme of Section 26 at all, as has been
pointed out above. Further, this argument is more or less the conclusion
reached by the report of the High Level Committee, headed by Justice
B.N. Srikrishna, to amend the 1996 Act.3 It can be seen from the report
F
of the High Level Committee that an amendment would be required to
3
Shri Tushar Mehta, learned ASG, referred to a press release from the Government of
India, dated March 7th, 2018, after arguments have been concluded, in a written
submission made to us. According to him, the press release refers to a new Section 87
in a proposed amendment to be made to the 1996 Act. The press release states that the
Union Cabinet, chaired by the Prime Minister, has approved the Arbitration and
G Conciliation (Amendment) Bill, 2018 in which a new Section 87 is proposed to be
inserted as follows:
“A new section 87 is proposed to be inserted to clarify that unless parties
agree otherwise the Amendment Act 2015 shall not apply to (a) Arbitral
proceedings which have commenced before the commencement of the
Amendment Act of 2015 (b) Court proceedings arising out of or in relation to
such arbitral proceedings irrespective of whether such court proceedings are
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Section 26 to incorporate its findings. Section 87 of the proposed A
Arbitration and Conciliation (Amendment) Bill, 2018 cannot be looked
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.”
The Srikrishna Committee had recommended the following: B
“The Committee feels that permitting the 2015 Amendment Act to apply to
pending court proceedings related to arbitrations commenced prior to 23
October 2015 would result in uncertainty and prejudice to parties, as they
may have to be heard again. It may also not be advisable to make the 2015
Amendment Act applicable to fresh court proceedings in relation to such
arbitrations, as it may result in an inconsistent position. Therefore, it is felt
that it may be desirable to limit the applicability of the 2015 Amendment Act C
to arbitrations commenced on or after 23 October 2015 and related court
proceedings.
Recommendations
1. Section 26 of the 2015 Amendment Act may be amended to provide that:
a. unless parties agree otherwise, the 2015 Amendment Act shall not apply
to: (a) arbitral proceedings commenced, in accordance with section 21 of the D
ACA, before the commencement of the 2015 Amendment Act; and (b) court
proceedings arising out of or in relation to such arbitral proceedings irrespective
of whether such court proceedings are commenced prior to or after the
commencement of the 2015 Amendment Act; and
b. the 2015 Amendment Act shall apply only to arbitral proceedings
commenced on or after the commencement of the 2015 Amendment Act and
to court proceedings arising out of or in relation to such arbitral proceedings. E
2. The amended Section 26 shall have retrospective effect from the date of
commencement of the 2015 Amendment Act.”
The High Level Committee recommended this after referring to divergent views taken
by various High Courts. This included the interpretation given by the Calcutta High
Court in Electrosteel Castings Limited v. Reacon Engineers (India) Pvt. Ltd. (A.P.
No. 1710 of 2015 decided on 14.01.2016) and Tufan Chatterjee v. Rangan Dhar,
(FMAT No. 47 of 2016 decided on 02.03.2016), the Madhya Pradesh High Court in F
Pragat Akshay Urja Limited Company v. State of M.P and Ors., (Arbitration Case
Nos. 48, 53 and 54/2014, decided on 30.06.2016), the Madras High Court in New
Tirupur Area Development v. Hindustan Construction Co. Limited, (Application
No. 7674 of 2015 in O.P. No. 931 of 2015) and the Bombay High Court in Rendezvous
Sports World v. BCCI (Chamber Summons No. 1530 of 2015 in Execution Application
(L) No. 2481 of 2015, Chamber Summons No. 1532 of 2015 in Execution Application
(L) No. 2482 and Chamber Summons No. 66 of 2016 in Execution Application (L) No. G
2748 of 2015 decided on 08.08.2016).
In addition to this, the following decisions by various High Courts also deal with the
applicability of the Amendment Act:
i. Calcutta High Court: Nitya Ranjan Jena v. Tata Capital Financial Services
Ltd., GA No. 145/206 with AP No. 15/2016, West Bengal Power Development
Corporation Ltd. v. Dongfang Electric Corporation, 2017 SCCOnline Cal
H
864 SUPREME COURT REPORTS [2018] 2 S.C.R.

A at, at this stage, for the interpretation of Section 26 of the Amendment
Act for two reasons: (i) Section 87, as ultimately enacted, may not be in
the form that is referred to in the press release; and (ii) a proposed Bill,
introducing a new and different provision of law can hardly be the basis
for interpretation of a provision of law as it now stands. Obviously,
B 9388, Saraf Agencies v. Federal Agencies for State Property Management,
AIR 2017 Cal. 65, Reliance Capital Ltd. v. Chandana Creations, 2016 SCC
Cal. 9558 and Braithwaite Burn & Jessop Construction Company Ltd. v.
Indo Wagon Engineering Ltd., AIR 2017 (NOC 923) 314.
ii. Bombay High Court: M/s. Maharashtra Airport Development Company
Ltd. v. M/s. PBA Infrastructure Ltd., 2017 SCCOnline Bom (7840), Enercon
GmbH v. Yogesh Mehra, 2017 SCC Bom 1744 and Global Aviation Services
C Pvt. Ltd. v. Airport Authority of India, Commercial Arbitration Petition No.
434/2017,
iii. Madras High Court: Jumbo Bags Ltd. v. New India Assurance Company
Limited, 2016 (3) CTC 769.
iv. Delhi High Court: ICI Soma JV v. Simplex Infrastructures Ltd., 2016 SCC
Online Del 5315, Tantia-CCIL (JV) v. Union of India, ARB. P. 615/2016,
D Raffles Design International India Pvt. Ltd. v. Educomp Professional
Education Ltd. and Ors., OMP (I) (COMM.) 23/2015, Orissa Concrete
and Allied Industries Ltd. v. Union of India and Ors., Arb. P. No. 174 of
2016, Takamol Industries Pvt. Ltd. v. Kundan Rice Mills Ltd., EX. P. 422/
2014 & EA No. 739/2016, Apex Encon Projects Pvt. Ltd. v. Union of India &
Anr., 2017 SCC Online Del. 9779 and Ratna Infrastructure Projects Pvt.
Ltd. v. Meja Urja Nigam Pvt. Ltd., 2017 SCC Online Del 7808.
E v. Patna High Court: SPS v. Bihar Rajya Pul Nirman Nigam Ltd., Request
Case No. 14 of 2016 and Kumar and Kumar Associates v. Union of India,
2017 1 PLJR 649.
vi. Gujarat High Court: OCI Corp. v. Kandla Export Corporation & Ors., 2017
GLH (1) 383, Abhinav Knowledge Services Pvt. Ltd. v. Babasaheb
Amdebdkar Open University, AIR 2017 (NOC 1012) 344 and Pallav
Vimalbhai Shah v. Kalpesh Sumatibhai Shah, O/IAAP/15/2017.
F vii. Kerala High Court: Shamsudeen v. Shreeram Transport Finance Ltd., ILR
2017 Vol. 1, Ker. 370 and Jacob Mathew v. PTC Builders, 2017 (5) KHC 583.
viii. Tripura High Court: Subhash Podder v. State of Tripura, 2016 SCC Tri. 500.
ix. Chhatisgarh High Court: Orissa Concrete and Allied Industries Limited v.
Union of India and Ors., Arbitration Application No. 34/2014.
x. Rajasthan High Court: Dwarka Traders Pvt. Ltd. v. Union of India, S.B.,
Arbitration Application No. 95/2013 and Mayur Associates, Engineers and
G Contractors v. Gurmeet Singh & Ors., S.B. Arbitration Application No. 74/
2013.
xi. Himachal Pradesh High Court: RSWM v. The Himachal Pradesh State
Supplies Co. Ltd., Arb Case No. 104/2016 and P.K. Construction Co. &
Ors. v. Shimla Municipal Co. & Ors., Civil Writ Petition No. 2322/2016.
xii. Punjab & Haryana High Court: Alpine Minmetals India Pvt. Ltd. v. Noble
Resources Ltd., LPA No. 917/2017.
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therefore, Shri Viswanathan’s approach leads to an amendment of Section A
26, as recommended by the Srikrishna Committee, and not interpretation
thereof. For all these reasons, his argument must, therefore, be rejected.
Shri Datar’s argument is more or less the same as Shri Viswanathan’s,
and suffers from the same infirmity as Shri Viswanathan’s interpretation.
Shri A. Krishnan, in bringing in the concept of “seat”, is again doing
B
complete violence to the language of Section 26, as “place of arbitration”
is a well-known concept contained in Section 20 of the 1996 Act, which
finds no mention whatsoever in Section 26 of the Amendment Act. For
these reasons, his interpretation cannot also be accepted.
30. Shri Neeraj Kishan Kaul, learned senior counsel appearing on
behalf of Respondents in SLP(C) Nos.19545-19546 of 2016, has argued C
that the first part of Section 26 does not apply to Court proceedings at
all, thereby indicating that the Amendment Act must be given retrospective
effect insofar as Court proceedings in relation to arbitral proceedings
are concerned. For this purpose, he relied on Minister of Public Works
of the Government of the State of Kuwait (supra). D
31. In that case, the question that arose was as to the correct
construction of Section 7(1) of the U.K. Arbitration Act, 1975. The said
section was given retrospective effect in applying the New York
Convention to arbitration agreements that were entered into before the
convention was made applicable, for the reason that nobody had an E
accrued right/defence which was taken away. All defences available in
a common law action on the award would be available and continued to
be available. Hence, it was held that the award could always have been
enforced by one form of procedure and that it subsequently became
enforceable by an alternative form. This judgment can have no application
to the present case, inasmuch as the Amendment Act, as applicable to F
Court proceedings that arose in relation to arbitral proceedings, cannot
be said to apply to mere forms of procedure, but also includes substantive
law applicable to such Court proceedings post the Amendment Act. Also,
it is wholly fallacious to say that since the first part of Section 26 does
not refer to Court proceedings in relation to arbitral proceedings, the G
Amendment Act is retrospective insofar as such proceedings are
concerned. The second part of Section 26 would then have to be
completely ignored, which, as has been seen hereinabove, applies to
Court proceedings in relation to arbitral proceedings only prospectively,
i.e. if such Court proceedings are commenced after the Amendment
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866 SUPREME COURT REPORTS [2018] 2 S.C.R.

A Act comes into force. For these reasons, such an interpretation of Section
26 is unacceptable.
32. Shri Chidambaram, appearing on behalf of some of the
Respondents, has argued that the interpretation accepted by this Court
supra is the correct interpretation. He has also argued that, alternatively,
B the expression “in relation to arbitral proceedings” in the second part of
Section 26 would also include within it arbitral proceedings before the
arbitral tribunal, as otherwise Section 26 would not apply the Amendment
Act to such arbitral proceedings. We are afraid that this alternative
interpretation does not appeal to us, for the simple reason that when the
first part of Section 26 makes it clear that arbitral proceedings commenced
C before the Amendment Act would not be governed by the Amendment
Act, it is clear that arbitral proceedings that have commenced after the
Amendment Act comes into force would be so governed by it, as has
been held by us above. The negative form of the language of the first
part only becomes necessary to indicate that parties may otherwise agree
D to apply the Amendment Act to arbitral proceedings commenced even
before the Amendment Act comes into force. The absence of any
reference to Section 21 of the 1996 Act in the second part of Section 26
of the Amendment Act is also a good reason as to why arbitral proceedings
before an arbitral tribunal are not contemplated in the second part.
E 33. Shri Sibal has argued that Section 26 is not a savings clause at
all and cannot be construed as such. According to the learned senior
counsel, Section 26 manifests a clear intention to destroy all rights, vested
or otherwise, which have accrued under the unamended 1996 Act. We
are unable to accept these submissions as it is clear that the intendment
of Section 26 is to apply the Amendment Act prospectively to arbitral
F proceedings and to court proceedings in relation thereto. This approach
again does not commend itself to us.
34. Dr. Singhvi has, however, argued that the approach indicated
by us above could be termed as an “intermediate approach”, i.e. it is an
approach which does not go to either of the extreme approaches of Shri
G Sundaram, Shri Viswanathan and Shri Datar or that of Shri Sibal. Further,
according to the learned senior counsel, this approach has the merit of
both clarity, as well as no anomalies arising as a result, as it is clear that
the Amendment Act is to be applied only prospectively with effect from
the date of its commencement, and only to arbitral proceedings and to
H court proceedings in relation thereto, which have commenced on or after
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the commencement of the Amendment Act. We think this is the correct A
approach as has already been indicated by us above.
35. The judgment in Thyssen (supra), was strongly relied upon
by counsel on both sides. It is, therefore, important to deal with this
judgment in a little detail. In Thyssen (supra), Section 85 of the 1996
Act came up for consideration. What is clear is that Section 85(2)(a) B
had the expression “in relation to arbitral proceedings” in both parts of
sub-section (2)(a). When speaking of the repealed enactments, it stated
that they will apply “in relation to” arbitral proceedings which commenced
before the 1996 Act came into force, but that otherwise the 1996 Act
shall apply “in relation to” arbitral proceedings, which commenced on or
after the 1996 Act came into force. C

36. The judgment in Thyssen (supra) construed Section 85 as
follows:
“23. Section 85(2)(a) of the new Act is in two limbs: (1) provisions
of the old Act shall apply in relation to arbitral proceedings which D
commenced before the new Act came into force unless otherwise
agreed by the parties, and (2) the new Act shall apply in relation
to arbitral proceedings which commenced on or after the new
Act came into force. The first limb can further be bifurcated
into two: (a) provisions of the old Act shall apply in relation to
arbitral proceedings commenced before the new Act came into E
force, and (b) the old Act will not apply in such cases where the
parties agree that it will not apply in relation to arbitral proceedings
which commenced before the new Act came into force. The
expression “in relation to” is of the widest import as held by
various decisions of this Court in Doypack Systems (P) F
Ltd. [(1988) 2 SCC 299], Mansukhlal Dhanraj Jain [(1995) 2
SCC 665], Dhanrajamal Gobindram [AIR 1961 SC 1285 :
(1961) 3 SCR 1020] and Navin Chemicals Mfg. [(1993) 4 SCC
320] This expression “in relation to” has to be given full effect
to, particularly when read in conjunction with the words “the
provisions” of the old Act. That would mean that the old Act will G
apply to the whole gambit of arbitration culminating in the
enforcement of the award. If it was not so, only the word “to”
could have sufficed and when the legislature has used the
expression “in relation to”, a proper meaning has to be given.
This expression does not admit of restrictive meaning. The first H
868 SUPREME COURT REPORTS [2018] 2 S.C.R.

A limb of Section 85(2)(a) is not a limited saving clause. It saves
not only the proceedings pending at the time of commencement
of the new Act but also the provisions of the old Act for
enforcement of the award under that Act.”
(at page 369)
B [Emphasis Supplied]
The judgment then goes on to refer to Section 48 of the Arbitration Act,
1940, which is set out therein as follows:
“48. Saving for pending references.—The provisions of this
Act shall not apply to any reference pending at the
C commencement of this Act, to which the law in force immediately
before the commencement of this Act shall notwithstanding any
repeal effected by this Act continue to apply.”
(at page 349)

D Paragraph 33 goes on to state the difference between Section 85(2)(a)
of the 1996 Act and the earlier Section 48 of the 1940 Act, as follows:
“33. Because of the view of Section 85(2)(a) of the new Act which we
have taken, it is not necessary for us to consider difference in the repealing
provisions as contained in Section 48 of the old Act and Section 85 of the
new Act. We may, however, note that under Section 48 of the old Act
E
the concept is of “reference” while under the new Act it is
“commencement”. Section 2(e) of the old Act defines “reference”. Then
under Section 48 the word used is “to” and under Section 85(2)(a) the
expression is “in relation to”. It, therefore, also appears that it is not
quite relevant to consider the provision of Section 48 of the old Act to
F interpret Section 85(2)(a).”
(at page 375)
[Emphasis Supplied]
Paragraph 25 specifically states that Section 6 of the General Clauses
G Act will not apply, inasmuch as a different intention does appear from
the plain language of Section 85(2)(a). Ultimately, after stating seven
conclusions in paragraph 22, this Court went on to state that enforcement
of an award under the 1940 Act would be an accrued right for the reason
that the challenge procedure under Section 30 of the 1940 Act was
wider and completely different from the challenge procedure under
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Section 34 of the 1996 Act, and that to avoid confusion and hardship, it A
would be important to refer to the expression “in relation to” as meaning
the entire gamut of arbitral proceedings, beginning with commencement
and ending with enforcement of an award.
37. The judgment in Thyssen (supra) dealt with a differently
worded provision, and emphasized the difference in language between B
the expression “to” and the expression “in relation to”. In reference to
the Acts which were repealed under Section 85, proceedings which
commenced before the 1996 Act were to be governed by the repealed
Acts. These proceedings would be the entire gamut of proceedings, i.e.
from the stage of commencement of arbitral proceedings until the
challenge proceedings against the arbitral award had been exhausted. C
Similar was the position with respect to the applicability of the 1996 Act,
which would again apply to the entire gamut of arbitral proceedings,
beginning with commencement and ending with enforcement of the
arbitral award. It is clear, therefore, that Section 85(2)(a) has two major
differences in language with Section 26: one, that the expression “in D
relation to” does not appear in the first part of Section 26 and only the
expression “to” appears; and, second, that “commencement” in the first
part of Section 26 is as is understood by Section 21 of the 1996 Act. The
second part of Section 85(2)(a) is couched in language similar to the
second part of Section 26 with this difference, that Section 21 contained
in the first part of Section 26 is conspicuous by its absence in the second E
part.
38. The judgment in Thyssen (supra) was followed in N.S. Nayak
(supra). After setting out paragraph 32 of the judgment in Thyssen
(supra) and paragraphs 22 and 23 of the aforesaid judgment, this Court
concluded: F

“13. As stated in paragraph 22, Conclusion 1 without any
reservation provides that the provisions of the old Act shall apply
in relation to the arbitral proceedings which have commenced
before coming into force of the new Act. Conclusion 2, in our
view, is required to be read in context with Conclusion 1, that is G
to say, the phrase “in relation to arbitral proceedings” cannot be
given a narrow meaning to mean only pendency of the
proceedings before the arbitrator. It would cover not only
proceedings pending before the arbitrator but would also cover
the proceedings before the court and any proceedings which are H
870 SUPREME COURT REPORTS [2018] 2 S.C.R.

A required to be taken under the old Act for the award becoming a
decree under Section 17 thereof and also appeal arising
thereunder. Hence, Conclusions 1 and 2 are to be read together
which unambiguously reiterate that once the arbitral proceedings
have started under the old Act, the old Act would apply for the
award becoming a decree and also for appeal arising thereunder.
B
14. Conclusion 3 only reiterates what is provided in various
sections of the Arbitration Act, which gives option to the parties
to opt for the procedure as per their agreement during the arbitral
proceedings before the arbitrator. The phrase “unless otherwise
agreed by the parties” used in various sections, namely, 17, 21,
C 23(3), 24(1), 25, 26, 29, 31, 85(2)(a) etc. indicates that it is open
to the parties to agree otherwise. During the arbitral proceedings,
right is given to the parties to decide their own procedure. So if
there is an agreement between the parties with regard to the
procedure to be followed by the arbitrator, the arbitrator is
D required to follow the said procedure. Reason being, the arbitrator
is appointed on the basis of the contract between the parties and
is required to act as per the contract. However, this would not
mean that in appeal parties can contend that the appellate
procedure should be as per their agreement. The appellate
procedure would be governed as per the statutory provisions
E and parties have no right to change the same. It is also settled
law that the right to file an appeal is accrued right that cannot be
taken away unless there is specific provision to the contrary.
There is no such provision in the new Act. In the present cases,
the appeals were pending before the High Court under the
F provisions of the old Act and, therefore, appeals are required to
be decided on the basis of the statutory provisions under the said
Act. Hence, there is no substance in the submission made by the
learned counsel for the appellant.”
(at pages 63-64)
G The majority judgment in Milkfood Limited (supra), after referring to
the judgments in Thyssen (supra) and N.S. Nayak (supra), concluded
that, on the facts of that case, the 1940 Act will apply and not the 1996
Act. These judgments are distinguishable for the same reasons, as they
only follow and apply Thyssen (supra).
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39. From a reading of Section 26 as interpreted by us, it thus A
becomes clear 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. But, what is to
happen to Section 34 petitions that have been filed before the
B
commencement of the Amendment Act, which were governed by Section
36 of the old Act? Would Section 36, as substituted, apply to such petitions?
To answer this question, we have necessarily to decide on what is meant
by “enforcement” in Section 36. On the one hand, it has been argued
that “enforcement” is nothing but “execution”, and on the other hand, it
has been argued that “enforcement” and “execution” are different C
concepts, “enforcement” being substantive and “execution” being
procedural in nature.
40. At this stage, it is necessary to set out the scheme of the 1996
Act. An arbitral proceeding commences under Section 21, unless
otherwise agreed by parties, when a dispute arises between the parties D
for which a request for the dispute to be referred to arbitration is received
by the respondent. The arbitral proceedings terminate under Section
32(1) by the delivery of a final arbitral award or by the circumstances
mentioned in Section 32(2). The mandate of the arbitral tribunal
terminates with the termination of arbitral proceedings, save and except
for correction and interpretation of the award within the bounds of Section E
33, or the making of an additional arbitral award as to claims presented
in the proceedings, but omitted from the award. Once this is over, in
cases where an arbitral award is delivered, such award shall be final
and binding on the parties and persons claiming under them, under Section
35 of the 1996 Act. Under Section 36, both pre and post amendment, F
such award shall be “enforced” in accordance with the provisions of the
Code of Civil Procedure, 1908, in the same manner as if it were a decree
of the Court. It is clear that the scheme of the 1996 Act is materially
different from the scheme of the 1940 Act. Under Section 17 of the
1940 Act, once an award was delivered, the Court had to pronounce
judgment in accordance with the award, following which a decree would G
be drawn up, which would then be executable under the Code of Civil
Procedure. Under Section 36 of the 1996 Act, the Court does not have
to deliver judgment in terms of the award, which is then followed by a
decree, which is the formal expression of the adjudication between the
parties. Under Section 36 of the 1996 Act, the award is deemed to be a H
872 SUPREME COURT REPORTS [2018] 2 S.C.R.

A decree and shall be enforced under the Code of Civil Procedure as
such.
41. This brings us to the manner of enforcement of a decree under
the Code of Civil Procedure. A decree is enforced under the Code of
Civil Procedure only through the execution process – see Order XXI of
B the Code of Civil Procedure. Also, Section 36(3), as amended, refers to
the provisions of the Code of Civil Procedure for grant of stay of a
money decree. This, in turn, has reference to Order LXI, Rule 5 of the
Code of Civil Procedure, which appears under the Chapter heading,
“Stay of Proceedings and of Execution”. This being so, it is clear that
Section 36 refers to the execution of an award as if it were a decree,
C attracting the provisions of Order XXI and Order LXI, Rule 5 of the
Code of Civil Procedure and would, therefore, be a provision dealing
with the execution of arbitral awards. This being the case, we need to
refer to some judgments in order to determine whether execution
proceedings and proceedings akin thereto give rise to vested rights, and
D whether they are substantive in nature.
42. In Lalji Raja and Sons v. Hansraj Nathuram, (1971) 1 SCC
721 at 728, this Court was concerned with a judgment debtor’s right to
resist execution of a decree. Section 20(1)(b) of the Code of Civil
Procedure (Amendment) Act, 1951 was extended to Madhya Bharat
E and other areas, as a result of which the judgment debtor’s right to resist
execution of a decree was protected. In this context, this Court held that
the Amendment Act of 1951 made decrees, which could have been
executed only by courts in British India, executable in the whole of India.
Stating that the change made was one relating to procedure only, this
Court held:
F
“15. This provision undoubtedly protects the rights acquired and
privileges accrued under the law repealed by the Amending Act.
Therefore the question for decision is whether the non-
executability of the decree in the Morena Court under the law in
force in Madhya Bharat before the extension of “the Code” can
G be said to be a right accrued under the repealed law. We do not
think that even by straining the language of the provision it can
be said that the non-executability of a decree within a particular
territory can be considered as a privilege. Therefore the only
question that we have to consider is whether it can be considered
H as a “right accrued” within the meaning of Section 20(1)(b) of
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the Code of Civil Procedure (Amendment) Act, 1950. In the A
first place, in order to get the benefit of that provision, the non-
executability of the decree must be a right and secondly it must
be a right that had accrued from the provisions of the repealed
law. It is contended on behalf of the judgment-debtors that when
the decree was passed, they had a right to resist the execution
B
of the decree in Madhya Bharat in view of the provisions of the
Indian Code of Civil Procedure (as adapted) which was in force
in the Madhya Bharat at that time and the same is a vested right.
It was further urged on their behalf that that right was preserved
by Section 20(1)(b) of the Code of Civil Procedure (Amendment)
Act, 1950. It is difficult to consider the non-executability of the C
decree in Madhya Bharat as a vested right of the judgment-
debtors. The non-executability in question pertains to the
jurisdiction of certain courts and not to the rights of the judgment-
debtors. Further the relevant provisions of the Civil Procedure
Code in force in Madhya Bharat did not confer the right claimed
D
by the judgment-debtors. All that has happened in view of the
extension of “the Code” to the whole of India in 1951 is that the
decrees which could have been executed only by courts in British
India are now made executable in the whole of India. The change
made is one relating to procedure and jurisdiction. Even before
“the Code” was extended to Madhya Bharat the decree in E
question could have been executed either against the person of
the judgment-debtors if they had happened to come to British
India or against any of their properties situated in British India.
The execution of the decree within the State of Madhya Bharat
was not permissible because the arm of “the Code” did not reach
F
Madhya Bharat. It was the invalidity of the order transferring
the decree to the Morena Court that stood in the way of the
decree-holders in executing their decree in that court on the earlier
occasion and not because of any vested rights of the judgment-
debtors. Even if the judgment-debtors had not objected to the
execution of the decree, the same could not have been executed G
by the court at Morena on the previous occasion as that court
was not properly seized of the execution proceedings. By the
extension of “the Code” to Madhya Bharat, want of jurisdiction
on the part of the Morena Court was remedied and that court is
now made competent to execute the decree.
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874 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 16. That a provision to preserve the right accrued under a repealed
Act “was not intended to preserve the abstract rights conferred
by the repealed Act.... It only applies to specific rights given to
an individual upon happening of one or the other of the events
specified in statute” — See Lord Atkin’s observations
in Hamilton Gell v. White. [(1922) 2 KB 422]. The mere right,
B
existing at the date of repealing statute, to take advantage of
provisions of the statute repealed is not a “right accrued” within
the meaning of the usual saving clause — See Abbot v. Minister
for Lands [(1895) AC 425] and G. Ogden Industries Pvt.
Ltd. v. Lucas. [(1969) 1 All ER 121]”
C In Narhari Shivram Shet Narvekar v. Pannalal Umediram (1976) 3
SCC 203 at 207, this Court, following Lalji Raja (supra), held as follows:
“8. Learned counsel appearing for the appellant however
submitted that since the Code of Civil Procedure was not
applicable to Goa the decree became inexecutable and this being
D a vested right could not be taken away by the application of the
Code of Civil Procedure to Goa during the pendency of the appeal
before the Additional Judicial Commissioner. It seems to us that
the right of the judgment debtor to pay up the decree passed
against him cannot be said to be a vested right, nor can the
E question of executability of the decree be regarded as a
substantive vested right of the judgment debtor. A fortiori the
execution proceedings being purely a matter of procedure it is
well settled that any change in law which is made during the
pendency of the cause would be deemed to be retroactive in
operation and the appellate court is bound to take notice of the
F change in law.”
Since it is clear that 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
G Amendment Act.
43. The matter can also be looked at from a slightly different
angle. Section 36, prior to the Amendment Act, is only a clog on the right
of the decree holder, who cannot execute the award in his favour, unless
the conditions of this section are met. This does not mean that there is a
H corresponding right in the judgment debtor to stay the execution of such
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an award. Learned counsel on behalf of the Appellants have, however, A
argued that a substantive change has been made in the award, which
became an executable decree only after the Section 34 proceedings
were over, but which is now made executable as if it was a decree with
immediate effect, and that this change would, therefore, take away a
vested right or accrued privilege in favour of the Respondents. It has
B
been argued, relying upon a number of judgments, that since Section 36
is a part of the enforcement process of awards, there is a vested right or
at least a privilege accrued in favour of the Appellants in the unamended
1996 Act applying insofar as arbitral proceedings and court proceedings
in relation thereto have commenced, prior to the commencement of the
Amendment Act. The very judgment strongly relied upon by senior counsel C
for the appellants, namely Garikapati Veeraya (supra), itself states in
proposition (v) at page 515, that the vested right of appeal can be taken
away only by a subsequent enactment, if it so provides specifically or by
necessary intendment and not otherwise. We have already held that
Section 26 does specifically provide that the court proceedings in relation
D
to arbitral proceedings, being independent from arbitral proceedings,
would not be viewed as a continuation of arbitral proceedings, but would
be viewed separately. This being the case, it is unnecessary to refer to
judgments such as Union of India v. A.L. Rallia Ram, (1964) 3 SCR
164 and NBCC Ltd. v. J.G. Engineering (P) Ltd., (2010) 2 SCC 385,
which state that a Section 34 proceeding is a supervisory and not an E
appellate proceeding. Snehadeep Structures (P) Ltd. v. Maharashtra
Small-Scale Industries Development Corpn. Ltd., (2010) 3 SCC
34 at 47-49, which was cited for the purpose of stating that a Section 34
proceeding could be regard as an “appeal” within the meaning of Section
7 of the Interest on Delayed Payments To Small Scale and Ancillary
F
Industrial Undertakings Act, 1993, is obviously distinguishable on the
ground that it pertains to the said expression appearing in a beneficial
enactment, whose object would be defeated if the word “appeal” did not
include a Section 34 application. This is made clear by the aforesaid
judgment itself as follows:
“36. On a perusal of the plethora of decisions aforementioned, G
we are of the view that “appeal” is a term that carries a wide
range of connotations with it and that appellate jurisdiction can
be exercised in a variety of forms. It is not necessary that the
exercise of appellate jurisdiction will always involve re-agitation
of entire matrix of facts and law. We have already seen H
876 SUPREME COURT REPORTS [2018] 2 S.C.R.

A in Abhayankar [(1969) 2 SCC 74] that even an order passed
by virtue of limited power of revision under Section 115 of the
Code is treated as an exercise of appellate jurisdiction, though
under that provision, the Court cannot go into the questions of
facts. Given the weight of authorities in favour of giving such a
wide meaning to the term “appeal”, we are constrained to
B
disagree with the contention of the learned counsel for the
respondent Corporation that appeal shall mean only a challenge
to a decree or order where the entire matrix of law and fact can
be re-agitated with respect to the impugned order/decree. There
is no quarrel that Section 34 envisages only limited grounds of
C challenge to an award; however, we see no reason why that
alone should take out an application under Section 34 outside the
ambit of an appeal especially when even a power of revision is
treated as an exercise of appellate jurisdiction by this Court and
the Privy Council.
D xxx xxx xxx
40. It may be noted that Section 6(1) empowers the buyer to
obtain the due payment by way of any proceedings. Thus the
proceedings that the buyer can resort to, no doubt, includes
arbitration as well. It is pertinent to note that as opposed to Section
E 6(2), Section 6(1) does not state that in case the parties choose
to resort to arbitration, the proceedings in pursuance thereof will
be governed by the Arbitration Act. Hence, the right context in
which the meaning of the term “appeal” should be interpreted is
the Interest Act itself. The meaning of this term under the
Arbitration Act or the Code of Civil Procedure would have been
F relevant if the Interest Act had made a reference to them. For
this very reason, we also do not find it relevant that the Arbitration
Act deals with applications and appeals in two different chapters.
We are concerned with the meaning of the term “appeal” in the
Interest Act, and not in the Arbitration Act.”
G 44. Learned senior counsel appearing on behalf of the Respondents,
has also argued that the expression “has been” in Section 36(2), as
amended, would make it clear that the section itself refers to Section 34
applications which have been filed prior to the commencement of the
Amendment Act and that, therefore, the said section would apply, on its
H plain language, even to Section 34 applications that have been filed prior
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to the commencement of the Amendment Act. For this purpose, the A
judgment in State of Bombay v. Vishnu Ramchandra (1961) 2 SCR
26, was strongly relied upon. In that judgment, it was observed, while
dealing with Section 57 of the Bombay Police Act, 1951, that the
expression “has been punished” is in the present perfect tense and can
mean either “shall have been” or “shall be”. Looking to the scheme of
B
the enactment as a whole, the Court felt that “shall have been” is more
appropriate. This decision was referred to in paragraphs 60 and 61 of
Workmen v. Firestone Tyre & Rubber Co. of India (P) Ltd., (1973)
1 SCC 813 at 838 and the ratio culled out was that such expression may
relate to past or future events, which has to be gathered from the context,
as well as the scheme of the particular legislation. In the context in C
which Section 11A of the Industrial Disputes Act, 1947 was enacted,
this Court held that Section 11A has the effect of altering the law by
abridging the rights of the employer. This being so, the expression “has
been” would refer only to future events and would have no implication
to disputes prior to December 15, 1971. However, in a significant
D
paragraph, this Court held:
“63. It must be stated at this stage that procedural law has always
been held to operate even retrospectively, as no party has a vested
right in procedure.…”
45. Being a procedural provision, it is obvious that the context of E
Section 36 is that the expression “has been” would refer to Section 34
petitions filed before the commencement of the Amendment Act and
would be one pointer to the fact that the said section would indeed apply,
in its substituted form, even to such petitions. The judgment in L’Office
Cherifien Des Phosphates and another v. Yamashita-Shinnihon
Steamship Co. Ltd., (1994) 1 AC 486 is instructive. A new Section F
13A was introduced with effect from 1st January, 1992, by which
Arbitrators were vested with the power of dismissing a claim if there is
no inordinate or an inexcusable delay on the part of the claimant in
pursuing the claim. This Section was enacted because the House of
Lords in a certain decision had suggested that such delays in arbitration G
could not lead to a rejection of the claim by itself. What led to the
enactment of the Section was put by Lord Mustill thus:
“My Lords, the effect of the decision of the House in the Bremer
Vulkan case, coupled with the inability of the courts to furnish
any alternative remedy which might provide a remedy for the H
878 SUPREME COURT REPORTS [2018] 2 S.C.R.

A abuse of stale claims, aroused a chorus of disapproval which
was forceful, sustained and (so far as I am aware) virtually
unanimous. There is no need to elaborate. The criticisms came
from every quarter. Several Commonwealth countries hastily
introduced legislation conferring on the court, or on the arbitrator,
a jurisdiction to dismiss stale claims in arbitration. The history of
B
the matter, and the reasons why the question was not as easy as
it might have appeared, were summarized in an article published
in 1989 by Sir Thomas Bingham (Arbitration International, vol.
5, pp. 333 et seq.), and there is no need to rehearse them here.
Taking account of various apparent difficulties the Departmental
C Advisory Committee on Arbitration hesitated for a time both as
to the principle and as to whether the power to dismiss should be
vested in the court or the arbitrator, but the pressure from all
quarters became irresistible and in 1990 the Courts and Legal
Services Act inserted, through the medium of Section 102, a
new Section 13A in the Arbitration Act, 1950.”
D
(at page 522)
The question which arose in that case was whether delay that had taken
place before the Section came into force could be taken into account by
an arbitrator in order to reject the claim in that case. The House of
E Lords held that given the clamor for change and given the practical
value and nature of the rights involved, it would be permissible to look at
delay caused even before the Section came into force. In his concluding
paragraph, Lord Mustill held:
“In this light, I turn to the language of Section 13A construed, in
F case of doubt, by reference to its legislative background. The
crucial words are: “(a) . . . there has been inordinate and
inexcusable delay . . . “ Even if read in isolation these words
would I believe be sufficient, in the context of Section 13A as a
whole, to demonstrate that the delay encompasses all the delay
which has caused the substantial risk of unfairness. If there were
G any doubt about this the loud and prolonged chorus of complaints
about the disconformity between practices in arbitration and in
the High Court, and the increasing impatience for something to
be done about it, show quite clearly that Section 13A was intended
to bite in full from the outset. If the position were otherwise it
H would follow that, although Parliament has accepted the advice
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of all those who had urged that this objectionable system should A
be brought to an end, and has grasped the nettle and provided a
remedy, it has reconciled itself to the continuation of arbitral
proceedings already irrevocably stamped with a risk of injustice.
I find it impossible to accept that Parliament can have intended
any such thing, and with due respect to those who have suggested
B
otherwise I find the meaning of Section 13A sufficiently clear to
persuade me that in the interests of reform Parliament was willing
to tolerate the very qualified kind of hardship involved in giving
the legislation a partially retrospective effect. Accordingly, I agree
with Beldam L.J. that the arbitrator did have the powers to which
he purported to exercise. I would therefore allow the appeal and C
restore the award of the arbitrator.”
46. In 2004, this Court’s Judgment in National Aluminium
Company (supra) had recommended that Section 36 be substituted, as
it defeats the very objective of the alternative dispute resolution system,
and that the Section should be amended at the earliest to bring about the D
required change in law. It would be clear that looking at the practical
aspect and the nature of rights presently involved, and the sheer unfairness
of the unamended provision, which granted an automatic stay to execution
of an award before the enforcement process of Section 34 was over
(and which stay could last for a number of years) without having to look
at the facts of each case, it is clear that Section 36 as amended should E
apply to Section 34 applications filed before the commencement of the
Amendment Act also for the aforesaid reasons.
47. Both sides locked horns on whether a proceeding under Section
36 could be said to be a proceeding which is independent of a proceeding
under Section 34. In view of what has been held by us above, it is F
unnecessary for us to go into this by-lane of forensic argument.
48. However, Shri Viswanathan strongly relied upon the
observations made in paragraph 32 in Thyssen (supra) and the judgment
in Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573. It is no doubt
true that paragraph 32 in Thyssen (supra) does, at first blush, support G
Shri Viswanathan’s stand. However, this was stated in the context of
the machinery for enforcement under Section 17 of the 1940 Act which,
as we have seen, differs from Section 36 of the 1996 Act, because of
the expression “in relation to arbitral proceedings”, which took in the
entire gamut, starting from the arbitral proceedings before the arbitral H
880 SUPREME COURT REPORTS [2018] 2 S.C.R.

A tribunal and ending up with enforcement of the award. It was also in the
context of the structure of the 1940 Act being completely different from
the structure of the 1996 Act, which repealed the 1940 Act. In the present
case, it is clear that “enforcement” in Section 36 is to treat the award as
if it were a decree and enforce it as such under the Code of Civil
Procedure, which would only mean that such decree has to be executed
B
in the manner indicated. Also, a stray sentence in a judgment in a particular
context cannot be torn out of such context and applied in a situation
where it has been argued that enforcement and execution are one and
the same, at least for the purpose of the 1996 Act. In Regional
Manager & Anr. v. Pawan Kumar Dubey (1976) 3 SCR 540, at 544
C it was held:
“We think that the principles involved in applying Article 311(2)
having been sufficiently explained in Shamsher Singh’s case
(supra) it should no longer be possible to urge that Sughar
Singh’s case (supra) could give rise to some misapprehension
D of the law. Indeed, we do not think that the principles of law
declared and applied so often have really changed. But, the
application of the same law to the differing circumstances and
facts of various cases which have come up to this Court could
create the impression sometimes that there is some conflict
between different decisions of this Court. Even where there
E appears to some conflict, it would, we think, vanish when the
ratio decidendi of each case is correctly understood. It is the
rule deducible from the application of law to the facts and
circumstances of a case which constitutes its ratio decidendi
and not some conclusion based upon facts which may appear to
F be similar. One additional or different fact can make a world of
difference between conclusions in two cases even when the
same principles are applied in each case to similar facts.”
49. For the same reason, it is clear that the judgment in Hameed
Joharan (supra), which stated that execution and enforcement were
G different concepts in law, was in the context of Article 136 of the Limitation
Act, 1963, read with Section 35 of the Indian Stamp Act, 1899, which is
wholly different. The argument in that case was that Article 136 of the
Limitation Act prescribes a period of 12 years for the execution of a
decree or order, after it becomes enforceable. What was argued was
that it would become enforceable only when stamped and Section 35 of
H
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the Stamp Act was referred to for the said purpose. In this context, this A
Court held:
“And it is on this score it has been contended that the partition
decree thus even though already passed cannot be acted upon,
neither becomes enforceable unless drawn up and engrossed on
stamp papers. The period of limitation, it has been contended in B
respect of the partition decree, cannot begin to run till it is
engrossed on requisite stamp paper. There is thus, it has been
contended, a legislative bar under Section 35 of the Indian Stamp
Act for enforceability of partition decree. Mr Mani contended
that enforcement includes the whole process of getting an award
as well as execution since execution otherwise means due C
performance of all formalities, necessary to give validity to a
document. We are, however, unable to record our concurrence
therewith. Prescription of a twelve-year period certain cannot
possibly be obliterated by an enactment wholly unconnected
therewith. Legislative mandate as sanctioned under Article 136 D
cannot be kept in abeyance unless the selfsame legislation makes
a provision therefor. It may also be noticed that by the passing of
a final decree, the rights stand crystallised and it is only thereafter
its enforceability can be had, though not otherwise.”
(at page 593) E
It is for this reason that it was stated that enforceability of a decree
under the Limitation Act cannot be the subject matter of Section 35 of
the Stamp Act. Therefore, Section 35 of the Stamp Act could not be
held to “overrun” the Limitation Act and thus, give a complete go-by to
the legislative intent of Article 136 of the Limitation Act. Here again, F
observations made in a completely different context have to be understood
in that context and cannot be applied to a totally different situation.
50. As a matter of fact, it was noticed that furnishing of stamp
paper was an act entirely within the domain and control of the Appellant
in that case, and any delay in the matter of furnishing the same cannot G
possibly be said to stop limitation, as no one can take advantage of his
own wrong (see paragraph 13). As a matter of fact, the Court held that
unless a distinction was made between execution and enforcement, the
result in that case would lead to an “utter absurdity”. The Court held,
“absurdity cannot be the outcome of an interpretation of a Court order
and wherever there is even a possibility of such absurdity, it would be a H
882 SUPREME COURT REPORTS [2018] 2 S.C.R.

A plain exercise of judicial power to repeal the same rather than encouraging
it” (see paragraph 38).
51. Shri Viswanathan then referred us to this Court’s judgment in
Akkayanaicker v. A.A.A. Kotchadainaidu and Anr. (2004) 12 SCC
469, which, according to him, has followed the judgment in Hameed
B Joharan (supra). This judgment again would have no application for the
simple reason that the narrow point that was decided in that case was
whether the time period for execution of a decree under Section 136 of
the Limitation Act would start when the decree was originally made or
whether a fresh period of limitation would begin after the decree was
amended having been substantially scaled down by a Debt Relief Act.
C This Court held that as the original decree could not be enforced and
only the amended decree could be enforced, 12 years has to be counted
from the date of the amended decree. It is clear that this judgment also
does not carry the matter further.
52. It was also argued that an award by itself had no legal efficacy,
D until it became enforceable, and that, therefore, until it could be enforced
as a decree of the Court, it would continue to remain suspended. Here
again, the judgment in Satish Kumar (supra) is extremely instructive.
The question in that case was as to whether, under the 1940 Act, an
award had any legal efficacy before a judgment followed thereupon and
E it was made into a decree. A Full Bench of the Punjab and Haryana
High Court held that until it is made a rule of the Court, such an award is
waste paper. This Court strongly disagreed and followed its unreported
decision in Uttam Singh Dugal & Co. v. Union of India as follows:
“It seems to us that the main reason given by the two Full Benches
F for their conclusion is contrary to what was held by this Court in
its unreported decision in Uttam Singh Dugal & Co. v. Union
of India [ Civil Appeal No. 162 of 1962—judgment delivered on
11-10-1962] . The facts in this case, shortly stated, were that
Uttam Singh Dugal & Co. filed an application under Section 33
of the Act in the Court of the Subordinate Judge, Hazaribag.
G The Union of India, Respondent 1, called upon Respondent 2,
Col. S.K. Bose, to adjudicate upon the matter in dispute between
Respondent 1 and the appellant Company. The case of Uttam
Singh Dugal & Co.was that this purported reference to
Respondent 2 for adjudication on the matters alleged to be in
H dispute between them and Respondent 1 was not competent
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because by an award passed by Respondent 2 on April 23, 1952 A
all the relevant disputes between them had been decided. The
High Court held inter alia that the first award did not create any
bar against the competence of the second reference. On appeal
this Court after holding that the application under Section 33
was competent observed as follows:
B
“The true legal position in regard to the effect of an award is
not in dispute. It is well settled that as a general rule, all claims
which are the subject-matter of a reference to arbitration merge
in the award which is pronounced in the proceedings before
the arbitrator and that after an award has been pronounced,
the rights and liabilities of the parties in respect of the said C
claims can be determined only on the basis of the said award.
After an award is pronounced, no action can be started on the
original claim which had been the subject-matter of the
reference. As has been observed by Mookerjee, J., in the case
of Bhajahari Saha Banikya v. Behary Lal Basak [33 Cal. D
881 at p. 898] the award is, in fact, a final adjudication of a
Court of the parties own choice, and until impeached upon
sufficient grounds in an appropriate proceeding, an award, which
is on the fact of it regular, is conclusive upon the merits of the
controversy submitted, unless possibly the parties have intended
that the award shall not be final and conclusive … in reality, an E
award possesses all the elements of vitality, even though it has
not been formally enforced, and it may be relied upon in a
litigation between the parties relating to the same subject-
matter”. This conclusion, according to the learned Judge, is
based upon the elementary principle that, as between the parties F
and their privies, an award is entitled to that respect which is
due to the judgment of a court of last resort. Therefore, if the
award which has been pronounced between the parties has in
fact, or can, in law, be deemed to have dealt with the present
dispute, the second reference would be incompetent. This
position also has not been and cannot be seriously disputed.” G

This Court then held on the merits “that the dispute in regard to
overpayments which are sought to be referred to the arbitration
of Respondent 2 by the second reference are not new disputes;
they are disputes in regard to claims which the Chief Engineer
should have made before the arbitration under the first H
884 SUPREME COURT REPORTS [2018] 2 S.C.R.

A reference”. This Court accordingly allowed the appeal and set
aside the order passed by the High Court.
This judgment is binding on us. In our opinion this judgment lays
down that the position under the Act is in no way different from
what it was before the Act came into force, and that an award
B has some legal force and is not a mere waste paper. If the award
in question is not a mere waste paper but has some legal effect
it plainly purports to or affects property within the meaning of
Section 17(1)(b) of the Registration Act.”
(at pages 248-249)
C 53. Justice Hegde, in a separate concurring judgment, specifically
stated that an award creates rights in property, but those rights cannot
be enforced until the award is made a decree of the Court. The Learned
Judge put it very well when he said, “It is one thing to say that a right is
not created, it is an entirely different thing to say that the right created
D cannot be enforced without further steps”. The Amendment Act has
only made an award executable conditionally after it is made, like a
judgment of a Court, the only difference being that a decree would not
have to be formally drawn following the making of such award.
54. Shri Viswanathan then argued, relying upon R. Rajagopal
E Reddy v. Padmini Chandrasekharan (1995) 2 SCC 630, Fuerst Day
Lawson Ltd. v. Jindal Exports Ltd. (2001) 6 SCC 356, Sedco Forex
International Drill. Inc. v. CIT (2005) 12 SCC 717 and Bank of
Baroda v. Anita Nandrajog (2009) 9 SCC 462, that a clarificatory
amendment can only be retrospective, if it does not substantively change
the law, but merely clarifies some doubt which has crept into the law.
F For this purpose, he referred us to the amendments made in Section 34
by the Amendment Act and stated that despite the fact that Explanations
1 and 2 to Section 34(2) stated that “for the avoidance of any doubt, it is
clarified”, this is not language that is conclusive in nature, but it is open
to the Court to go into whether there is, in fact, a substantive change that
G has been made from the earlier position or whether a doubt has merely
been clarified. According to learned senior counsel, since fundamental
changes have been made, doing away with at least two judgments of
this Court, being Saw Pipes Ltd (supra) and Western Geco (supra),
as has been held in paragraph 18 in HRD Corporation (Marcus Oil
and Chemical Division) v. Gail (India) Limited (Formerly Gas
H Authority of India Ltd.) 2017 SCC Online 1024, it is clear that such
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amendments would only be prospective in nature. We do not express A
any opinion on the aforesaid contention since the amendments made to
Section 34 are not directly before us. It is enough to state that Section
26 of the Amendment Act makes it clear that the Amendment Act, as a
whole, is prospective in nature. Thereafter, whether certain provisions
are clarificatory, declaratory or procedural and, therefore, retrospective,
B
is a separate and independent enquiry, which we are not required to
undertake in the facts of the present cases, except to the extent indicated
above, namely, the effect of the substituted Section 36 of the Amendment
Act.
55. Learned counsel for the Appellants have painted a lurid picture
of anomalies that would arise in case the Amendment Act were generally C
to be made retrospective in application. Since we have already held that
the Amendment Act is only prospective in application, no such anomalies
can possibly arise. It may also be noted that the choosing of Section 21
as being the date on which the Amendment Act would apply to arbitral
proceedings that have been commenced could equally be stated to give D
rise to various anomalies. One such anomaly could be that the arbitration
agreement itself may have been entered into years earlier, and disputes
between the parties could have arisen many years after the said arbitration
agreement. The argument on behalf of the Appellants is that parties are
entitled to proceed on the basis of the law as it exists on the date on
which they entered into an agreement to refer disputes to arbitration. If E
this were to be the case, the starting point of the application of the
Amendment Act being only when a notice to arbitrate has been received
by the respondent, which as has been stated above, could be many years
after the arbitration agreement has been entered into, would itself give
rise to the anomaly that the amended law would apply even to arbitration F
proceedings years afterwards as and when a dispute arises and a notice
to arbitrate has been issued under Section 21. In such a case, the parties,
having entered into an arbitration agreement years earlier, could well
turn around and say that they never bargained for the change in law that
has taken place many years after, and which change will apply to them,
since the notice, referred to in Section 21, has been issued after the G
Amendment Act has come into force. Cut off dates, by their very nature,
are bound to lead to certain anomalies, but that does not mean that the
process of interpretation must be so twisted as to negate both the plain
language as well as the object of the amending statute. On this ground
also, we do not see how an emotive argument can be converted into a H
886 SUPREME COURT REPORTS [2018] 2 S.C.R.

A legal one, so as to interpret Section 26 in a manner that would be contrary
to both its plain language and object.
56. However, it is important to remember that the Amendment
Act was enacted for the following reasons, as the Statement of Objects
and Reasons for the Amendment Act states:
B “2. The Act was enacted to provide for speedy disposal of cases
relating to arbitration with least court intervention. With the
passage of time, some difficulties in the applicability of the Act
have been noticed. Interpretation of the provisions of the Act by
courts in some cases have resulted in delay of disposal of
C arbitration proceedings and increase in interference of courts in
arbitration matters, which tend to defeat the object of the Act.
With a view to overcome the difficulties, the matter was referred
to the Law Commission of India, which examined the issue in
detail and submitted its 176th Report. On the basis of the said
report, the Arbitration and Conciliation (Amendment) Bill, 2003
D was introduced in the Rajya Sabha on 22nd December, 2003.
The said Bill was referred to the Department-related
Parliamentary Standing Committee on Personnel, Public
Grievances, Law and Justice for examination and Report. The
said Committee, submitted its Report to the Parliament on 4th
E August, 2005, wherein the Committee recommended that since
many provisions of the said Bill were contentious, the Bill may
be withdrawn and a fresh legislation may be brought after
considering its recommendations. Accordingly, the said Bill was
withdrawn from the Rajya Sabha.

F 3. On a reference made again in pursuance of the above, the
Law Commission examined and submitted its 246th Report on
“Amendments to the Arbitration and Conciliation Act, 1996” in
August, 2014 and recommended various amendments in the Act.
The proposed amendments to the Act would facilitate and
encourage Alternative Dispute Mechanism, especially arbitration,
G for settlement of disputes in a more user-friendly, cost effective
and expeditious disposal of cases since India is committed to
improve its legal framework to obviate in disposal of cases.
4. As India has been ranked at 178 out of 189 nations in the
world in contract enforcement, it is high time that urgent steps
H
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are taken to facilitate quick enforcement of contracts, easy A
recovery of monetary claims and award of just compensation
for damages suffered and reduce the pendency of cases in courts
and hasten the process of dispute resolution through arbitration,
so as to encourage investment and economic activity.
5. As Parliament was not in session and immediate steps were B
required to be taken to make necessary amendments to the
Arbitration and Conciliation Act, 1996 to attract foreign investment
by projecting India as an investor friendly country having a sound
legal framework, the President was pleased to promulgate the
Arbitration and Conciliation (Amendment) Ordinance, 2015.
C
6. It is proposed to introduce the Arbitration and Conciliation
(Amendment) Bill, 2015, to replace the Arbitration and
Conciliation (Amendment) Ordinance, 2015, which inter alia,
provides for the following, namely:—
(i) to amend the definition of “Court” to provide that in the case D
of international commercial arbitrations, the Court should be the
High Court;
(ii) to ensure that an Indian Court can exercise jurisdiction to
grant interim measures, etc., even where the seat of the arbitration
is outside India; E
(iii) an application for appointment of an arbitrator shall be
disposed of by the High Court or Supreme Court, as the case
may be, as expeditiously as possible and an endeavour should be
made to dispose of the matter within a period of sixty days;
(iv) to provide that while considering any application for F
appointment of arbitrator, the High Court or the Supreme Court
shall examine the existence of a prima facie arbitration agreement
and not other issues;
(v) to provide that the arbitral tribunal shall make its award within
a period of twelve months from the date it enters upon the G
reference and that the parties may, however, extend such period
up to six months, beyond which period any extension can only be
granted by the Court, on sufficient cause;
(vi) to provide that a model fee Schedule on the basis of which
High Courts may frame rules for the purpose of determination H
888 SUPREME COURT REPORTS [2018] 2 S.C.R.

A of fees of arbitral tribunal, where a High Court appoints arbitrator
in terms of section 11 of the Act;
(vii) to provide that the parties to dispute may at any stage agree
in writing that their dispute be resolved through fast track
procedure and the award in such cases shall be made within a
B period of six months;
(viii) to provide for neutrality of arbitrators, when a person is
approached in connection with possible appointment as an
arbitrator;
(ix) to provide that application to challenge the award is to be
C disposed of by the Court within one year.
7. The amendments proposed in the Bill will ensure that arbitration
process becomes more user-friendly, cost effective and lead to
expeditious disposal of cases.”
(Emphasis Supplied)
D 57. 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
E 28 and 34 in particular, which, as has been stated by the Statement of
Objects and Reasons, “…have resulted in delay of disposal of arbitration
proceedings and increase in interference of courts in arbitration matters,
which tend to defeat the object of the Act”, and will now not be applicable
to Section 34 petitions filed after 23rd October, 2015, but will be applicable
F to Section 34 petitions filed in cases where arbitration proceedings have
themselves commenced only after 23rd October, 2015. This would mean
that in all matters which are in the pipeline, despite the fact that Section
34 proceedings have been initiated only after 23rd October, 2015, yet, the
old law would continue to apply resulting in delay of disposal of arbitration
proceedings by increased interference of Courts, which ultimately defeats
G the object of the 1996 Act.4 It would be important to remember that the
246th Law Commission Report has itself bifurcated proceedings into
4
These amendments have the effect, as stated in HRD Corporation (Marcus Oil and
Chemical Division) v. Gail (India) Limited (Formerly Gas Authority of India
Ltd.) 2017 SCC Online 1024 (at paragraph 18) of limiting the grounds of challenge to
H awards as follows:
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two parts, so that the Amendment Act can apply to Court proceedings A
commenced on or after 23rd October, 2015. 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.
58. At the fag end of the arguments, Shri Viswanathan, in rejoinder, B
raised another point which arises only in Civil Appeals arising out of
SLP(C) No. 8374-8375 of 2017 and 8376-8378 of 2017. According to
him, the impugned judgment, when it dealt with the majority award in
favour of respondent Enercon GmbH, went behind the award in ordering
execution of a portion of the award in favour of Enercon, when the
majority award, in paragraph 331(3)(b), specifically ordered the 2 nd and C
3rd defendants to pay to WWIL, which is a joint venture company, a sum
of Rs.6,77,24,56,570/-. The majority award of the tribunal had specifically
stated, in paragraph 298, as follows:
“Enercon’s claim is first pleaded as damages payable by the
Mehra directors directly to Enercon. It also pleads an alternative D
claim for such further or other relief as the Tribunal considers
appropriate (paragraph 18 of the application of 13 December
2015 and paragraph 323.4 of its closing written submission dated
13 May 2016, as also its Statement of Claim of 30 September
2014, at paragraph 102(M).) In the Tribunal’s view, given that E
WWIL is only part owned by Enercon (hence Enercon’s
“…In fact, the same Law Commission Report has amended Sections 28 and
34 so as to narrow grounds of challenge available under the Act. The judgment
in ONGC v. Saw Pipes Ltd, (2003) 5 SCC 705, has been expressly done away
with. So has the judgment in ONGC v. Western Geco International Ltd.,
(2014) 9 SCC 263. Both Sections 34 and 48 have been brought back to the F
position of law contained in Renusagar Power Plant Co. Ltd. v. General
Electric Co., (1994) Supp (1) SCC 644, where “public policy” will now
include only two of the three things set out therein, viz., “fundamental policy
of Indian law” and “justice or morality”. The ground relating to “the interest
of India” no longer obtains. “Fundamental policy of Indian law” is now to be
understood as laid down in Renusagar (supra). “Justice or morality” has been
tightened and is now to be understood as meaning only basic notions of justice
G
and morality i.e. such notions as would shock the conscience of the Court as
understood in Associate Builders v. Delhi Development Authority, (2015) 3
SCC 49. Section 28(3) has also been amended to bring it in line with the
judgment of this Court in Associate Builders (supra), making it clear that the
construction of the terms of the contract is primarily for the arbitrator to
decide unless it is found that such a construction is not a possible one.” H
890 SUPREME COURT REPORTS [2018] 2 S.C.R.

A pecuniary disadvantage resulting from the Mehra directors’
wrongdoing is not the same as that of WWIL) and further that
WWIL remains the person most immediately affected by such
wrongdoing, the liability of the Mehra directors is best discharged
by requiring them to deciding upon such relief in favour of WWIL
(as distinct from direct relief in favour of Enercon), the Tribunal
B
sees no material disadvantage to Enercon, and, as for the Mehra
directors, no possible prejudice or other unfairness, whether as a
matter of pleading, the form of relief or otherwise.”
It is only thereafter that the Tribunal awarded the aforesaid amount in
paragraph 331(3)(b) as follows:
C
“(b) Jointly and severally-
(i) to pay to WWIL the sum of INR 6,772,456,570, being the
profit made by Vish Wind on the sale of allotment rights to WWIL
in the years ending 31 March 2011 and 2012 together with interest
thereon at the rate of 3% over European Central Bank rate from
D
those dates until the date of this Award.
(ii) To pay to the Claimants their legal and other costs in the sum
of €3,794,970.”
59. It is thus Shri Viswanathan’s contention that it is the decree
holder alone who can execute such decree in its favour, and that in the
E
present case it is WWIL who is the decree holder, insofar as paragraph
331(3)(b) is concerned and, that, therefore, Enercon’s Chamber
Summons, to execute this portion of the award, is contrary to the Code
of Civil Procedure as well as a number of judgments construing the
Code.
F 60. On the other hand, the submission of the other side is that the
Mehra brothers, who are the 2nd and 3rd defendants in the arbitration
proceedings, are in control and management of WWIL, and have
wrongfully excluded Enercon from such control and management.
WWIL, therefore, will never put this decree into execution. This being
G so, the interest of justice requires that we should not interfere with the
High Court judgment as there is no person that would be in a position to
enforce the award apart from Enercon.
61. We are of the opinion that even though the High Court may
not be strictly correct in its appreciation of the law, yet it has attempted
H to do justice on the facts of the case as follows:
BOARD OF CONTROL FOR CRICKET IN INDIA v. KOCHI 891
CRICKET PVT. LTD. [R. F. NARIMAN, J.]

“These last words are important. If what Mr. Mehta says is A
correct and the decree was in favour of WWIL and not Enercon,
that necessarily posits a rejection of Enercon’s claim for damages
and, therefore, a material disadvantage to Enercon. But this is
not what the Arbitral Tribunal did at all. It accepted Enercon’s
plea. It accepted its argument that the Mehras were guilty of
B
wrongdoing. It accepted that the Mehras were liable to make
good any advantage or benefit they have received. The Arbitral
Tribunal merely changed the vehicle or direction by which that
recompense, restitution or recovery was to be made. The
nomenclature is immaterial. Given the nature of disputes, indeed,
WWIL could never put this decree into execution. It never sought C
this relief. It could not have. This is not in fact, as paragraph 298,
says a relief in favour of WWIL at all although WWIL may
benefit from it. It is a relief and a decree in favour of and only of
Enercon.”
In this view of the matter, we do not think it appropriate, in the interest of D
justice, to interfere with the impugned judgment on this count.
62. In view of the above, the present batch of appeals is dismissed.
A copy of the judgment is to be sent to the Ministry of Law and Justice
and the Learned Attorney General for India in view of what is stated in
paragraphs 56 and 57 supra. E

Nidhi Jain Appeals dismissed.

F

G

H