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TMI Blog1999 (10) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... all apply in relation to arbitral proceedings which commenced before this Act came 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; and (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 under this Act." 3. In the case of Thyssen Stahlunion GMBH (Civil Appeal No. 6036 of 1998) the contract for sale and purchase of prime cold rolled mild steel sheets in coils contains arbitration agreement. Relevant clauses are as under : "Clause 12: Legal Interpretation 12.1This contract shall be governed and construed in accordance with the laws of India for the time being in force. 12.2To interpret all commercial terms and abbreviations used herein which have not been otherwise defined, the rules of "INCOTERMS 1990" shall be applied. Clause 13: Settlement of Disputes All disputes of differences whatsoever between the parties hereto arising out of or relating to the construction, meaning or operation or effect of this contract or the breac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-1994. Clareheaven Ltd. agreed to sell to Western Shipbreaking Corporation a ship 'M.V. Kaldera'. Clause (19) of the memorandum of agreement contained arbitration clause which is as under : "If any dispute should arise in connection with the interpretation in fulfilment of this contract, same shall be decided by arbitration in the city of London, U.K. with English law to apply and shall be referred to a single arbitrator to be appointed by the parties hereto. If the parties cannot agree on the appointment of the single arbitrator, the dispute shall be settled by three arbitrators, each party appointing one arbitrator the third being appointed by London Maritime Arbitration (sic) Association in London. If one party fails to appoint an arbitrator either or by way of substitution for two weeks after the other party having appointed his arbitrator, has sent the party making default notice by mail, cable or telex to make the appointment, London Maritime Arbitration (sic) Association shall after application from the party having appointed his arbitrator also appoint on behalf of the party making default. The Award rendered by the arbitrators shall be final binding upon the parties an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of the new Act before the new Act comes into force or they have necessarily to agree only after the new Act comes into force. 12. The Division Bench of the High Court by the impugned judgment dated 16-7-1998 held that clause 25 of the agreement does not admit of interpretation that this case is governed by Act of 1996. 13. Arguments have been addressed in considerable detail for and against the application of the new Act or the old Act in the cases of Thyssen and Rani Construction and the Foreign Awards Act in the case of Western Shipbreaking Corporation. We would, however, refer to these arguments in brief in so far we consider these to be relevant to decide the issues before us. The Submissions 14. Mr. F.S. Nariman who appeared for Thyssen, made the following submissions : 1.Termination of arbitral proceedings by the final arbitration award and the enforcement of the award are two separate proceedings. Under section 321 arbitral proceedings shall terminate by the final award or by an order of the arbitral Tribunal under sub-section (2) as provided therein. Thus, after the arbitral proceedings are terminated and final award made, reference has to be made to the new Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rules made thereunder as amended from time to time. Award was made on 27-6-1995. ONGC Ltd. filed a petition in the Bombay High Court praying that the respondent be directed under section 14 of the old Act to file the award in that court. It was contended by ONGC that the award was invalid, unenforceable and liable to be set aside under the provisions of the Arbitration Act, 1940. This petition of the ONGC was allowed by the High Court. It was noticed that during the course of preliminary hearing in the Queens Bench Division, Commercial Court, in London, Potter, J. had observed that one of the aspects of the case for consideration was : "(4) The curial law, i.e., the law governing the arbitration proceedings themselves, the manner in which the reference is to be conducted. It governs the procedural powers and duties of the arbitrators, questions of evidence and the determination of the proper law of the contract." Decision of the Bombay High Court was challenged in this Court. This Court said that the central issue in the appeal was as to what was the area of operation of the curial law and went on to observe as under : "The conclusion that we reach is that the curial law oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rights accrue when proceedings for enforcement of the award are taken and not before that . Right to take advantage of an enactment is not a vested right. One cannot have mere abstract right but only accrued right. Until award is made no party has an accrued right. Till the award is made nobody knows his rights. In this connection reference may be made to a decision of the Privy Council in Abbott v. Minister for Lands [1895 AC 425], which was followed by this Court in Hungerford Investment Trust Ltd. v. Haridas Mundhra [1972] (3) SCR 690. Reference may also be made to another decision of this Court in D.C. Bhatia v. Union of India [1995] (1) SCC 104. 16. In Abbott's case (supra) the Court said that "the mere right, existing at the date of a repealing statute, to take advantage of provisions of the statute repealed is not a 'right accrued' within the meaning of the usual saving clause." The appellant had contended that under the repealed enactment he had a right to make the additional conditional purchase, and this was a 'accrued right' at the time the Crown Lands Act of 1884 was passed and that notwithstanding the repeal it remained unaffected by such repeal. The 1884 Act had re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 3(c) will also apply to the premises which had already been let out at the monthly rent in excess of Rs. 3,500, when the amendment made in 1988 came into force". One of the contentions raised by the tenants was that they had acquired vested rights which could not be disturbed unless the amending Act contained specific provisions to that effect. They said that under the existing law tenants had acquired valuable property rights and they could neither be evicted nor the rent could be enhanced and that even a suit could not be brought against a tenant on the expiry of the lease. This Court repealed the contention and said : "52. We are unable to uphold this contention for a number of reasons. Prior to the enactment of the Rent Control Act by the various State Legislatures, the legal relationship between the landlord and tenant was governed by the provisions of the Transfer of Property Act. Delhi Rent Control Act provided protection to the tenants from drastic enhancement of rent by the landlord as well as eviction, except on certain specific grounds. The legislature by the amendment Act No. 57 of 1988 has partially repealed the Delhi Rent Control Act. This is a case of express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act, 1940, it is altogether lifeless from the point of view of its enforceability. Life is infused into the award in the sense of its becoming enforceable only after it is made rule of the court upon the judgment and decree and in terms of the award being passed. 9.Claim of the respondents that they had acquired vested right to challenge the award under the old Act in view of section 6 of the General Clauses Act is also incorrect. In this connection reference be made to section 100 of the Code of Civil Procedure, which was amended by section 37 of the Code of Civil Procedure (Amendment) Act, 1976. Now, by section 100 provisions of second appeal were made more stringent. But then the right which a party had acquired before the amendment came into operation was saved specifically by clause (m)7 of section 97 of the Code of Civil Procedure (Amendment) Act, 1976. 19. Mr. S.G. Desai, the learned counsel appearing for Rani Constructions, supported Mr. Nariman in his submissions. He also said that the expression 'in relation to' appearing in section 85(2)(a) refers to different stages of arbitration proceedings under the old Act and does not cover the proceedings after the award is g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation to impose a tax on lands and buildings which the Corporation did under the exercise of that power. The State Legislature enacted a law called the Madhya Pradesh Nagriya Sthavar Sampati Kar Adhiniyam, 1964 which provided for the levy of tax on lands and buildings in the urban areas in the State of Madhya Pradesh. Sub-section (3) of section 4 of the Madhya Pradesh Corporation Act provided that the tax levied and payable under that Act shall be in addition to any other tax for the time being payable under any other enactment for the time being in force in respect of the land or the building or portion thereof. Act of 1964 was challenged and one of the grounds of challenge was that the State Legislature having delegated its power to impose tax on lands and buildings in favour of the Municipal Corporation and Municipalities under the Municipal Corporation Act, 1956 and the M.P. Municipalities Act, 1961 and the local authorities having imposed a tax on lands and buildings, the State Legislature had no power to levy tax on lands and buildings. The Court said that the expression 'any other enactment for the time being in force' did not mean an enactment which was already in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the effect of an expiration of a temporary Act, it would be unsafe to lay down any inflexible rule. It certainly requires very clear and unmistakable language in a subsequent Act of the Legislature to revive or re-create an expired right. If, however, the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired. In order to see whether the rights and liabilities under the repealed Ordinance have been put to an end by the Act, 'the line of enquiry would be not whether', in the words of Mukherjea, J. In State of Punjab v. Mohar Singh [1955] 1 SCR 893, 'the new Act expressly keeps alive old rights and liabilities under the repealed Ordinance but whether it manifests an intention to destroy them'. Another line of approach may be to see as to how far the new Act is retrospective in operation. 13. It is settled both on principle and authority, that the mere right existing under the repealed Ordinance, to take advantage of the provisions of the repealed Ordinance, is not a right accrued. Sub-section (2) of section 31 of the Act was not intended to preserve ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s considering the provisions of section 38 of the English Interpretation Act, 1889, which provides : 'Where this Act or any Act passed after the commencement of this Act repeals any other enactment, then, unless the contrary intention appears the repeal shall not... affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed'. Bankes, LJ said :- "In my opinion the tenant had acquired a right under section 11 of the Act of 1908. This is not like the case which was cited to us (Abbot v. Minister for Lands [1895] AC 425) in argument where the tenant's right depended upon some act of his own. Here it depends upon the act of the landlord - namely, the giving of a notice to quit in view of a sale - in which event the section itself confers a right to compensation subject to the tenant complying with the conditions therein specified, and so far as it was possible to comply with them down to the time when the section was repealed he did in fact comply with them. For these reasons I think the question must be answered in the affirmative......" Scrutton, LJ said :- "The conditions imposed by section 11 were conditions, not of the acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j Nathuram 1971 (1) SCC 721 and of the House of Lords decision in the case of Kuwait Minister of Public Works v. Sir Frederick Snow and Partners [1984 (1) All. ER 733]. 23. In Lalji Raja & Sons' case (supra) this Court relying on the decision of the House of Lords in Abbott's case (supra) said that "the mere right, 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." Further relying on another decision in Hamilton Gell's case (supra) the Court said 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'. 24. In Kuwait Minister of Public Works' case (supra) there was a contract between the parties entered into sometime in 1958 relating to the construction of an international airport in Kuwait. Parties to the contract were the Government of the State of Kuwait and an English firm of civil engineering consultants (English firm). Disputes having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion clear such as 'which is and was at the date of the award a party to the New York Convention'. The court repelling the argument of the English firm observed as under : "The first answer is that the presumption against interpreting a statute as having retrospective effect is based on the assumption that, if retrospective effect were to be given to it, the result would be to deprive persons of accrued rights or defences. In the present case I am not persuaded that to give the 1975 Act retrospective effect in the sense which has been discussed would deprive anybody either of an accrued right or of an accrued defence. On the footing that awards made in a foreign state before that state became a party to the convention are not convention awards for the purposes of the 1975 Act, and cannot therefore be enforced under it, the result is simply that a person wishing to enforce such an award in the United Kingdom would be obliged to bring an action on it at common law, the right to do this being expressly preserved by section 6 of the 1975 Act. It cannot therefore be said that, if the construction of the 1975 Act which I prefer is correct, the result is to make an award, which could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, appearing for the SAIL (in CA No. 6036/98) made his submissions which we record in brief : 1.There cannot be two segments : (1) uptil the award, and (2) after the award. While under section 17 of the old Act an award has to be made into a decree, under section 36 of the new Act it is already stamped with the decree. The dispute is, thus, between the enforcement of the award and the corrective process. Question is under which law, the corrective process should take place? Section 85 of the new Act deals with transitional provisions. When an award is made under the old Act, for its enforcement provisions of the old Act have to be looked into. This is what section 85(2)(a) saves. 2.Procedure for the appointment of arbitrator and holding of arbitration proceedings and the making of award is different in the old Act and in the new Act. Under the old Act, arbitrator is not required to give reasons unless the agreement between the parties so envisages. Under the new Act, however, arbitrator has to give reasons. This one illustration is advanced to show that when arbitration proceedings have started before coming into force of the new Act, then, under the new Act, the award may not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to include all assets, rights, leaseholds, powers, authorities and privileges and all property, movable and immovable, including lands, buildings, workshops, stores... investments and bookdebts pertaining to the textile undertakings and all rights and interest in or arising out of such property as are, immediately before the appointed day, in the ownership, possession, power or control of the company in relation to all six undertakings. The expression 'pertaining to', 'in relation to' and 'arising out of', used in the deeming provision, are used in the expansive sense, as per decisions of courts, meanings found in standard dictionaries, and the principles of broad and liberal interpretation in consonance with articles 39(b) and (c) of the Constitution. 49. The words 'arising out of' have been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur undertaking. We are of the opinion that the words 'pertaining to' and 'in relation to' have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method followed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cause Courts Act is comprehensive in nature and takes in its sweep all types of suits and proceedings which are concerned with the recovery of possession of suit property from the licensee and, therefore, suits for permanent injunction restraining the defendant from effecting forcible recovery of such possessions from the licensee-plaintiff would squarely be covered by the wide sweep of the said phrase." 30. From Dhanrajamal Govindram's case (supra) we quote the following passage : "We may dispose of here a supplementary argument that the dispute till now is about the legal existence of the agreement including the arbitration clause, and that this is not a dispute arising out of, or in relation to a cotton transaction. Reference was made to certain observations in Heyman v. Darwins Ltd. [1942] AC 356. In our opinion, the words of the Bye-law 'arising out of or in relation to contracts' are sufficiently wide to comprehend matters, which can legitimately arise under section 20. The argument is that, when a party questions the very existence of a contract, no dispute can be said to arise out of it. We think that this is not correct, and even if it were, the further words 'in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Clauses Act, 1897. The right to carry forward losses which had accrued under the repealed Indian Income-tax Act of 1922 is not saved expressly by section 297 of the Income-tax Act, 1961. But, it is not necessary to save a right expressly in order to keep it alive after the repeal of the old Act of 1922. Section 6(c) saves accrued rights unless they are taken away by the repealing statute. We do not find any such taking away of the rights by section 297 either expressly or by implication." (p. 524) In Bansidhar's case (supra) this Court referred to the observations made in Shah Sadiq & Sons' case (supra) and said a saving provision in a repealing statute is not necessarily exhaustive of the rights and obligations so saved or the rights that survive the repeal. The Court said that for the purpose of clauses (c) and (e ) of section 6 of the Rajasthan General Clauses Act, 1955 which provided, respectively, that the repeal of an enactment shall not, unless a different intention appears, 'affect any right, privilege, obligation or liability, acquired, accrued or incurred under any enactment so repealed' or 'affect any investigation, legal proceeding or remedy in respect of any such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itration Award after the cut off date is not a condition precedent for applicability of saving clause under section 85(2)(a). It does not use the words 'Arbitral Award passed before' in place of 'Arbitral Proceedings which commenced before'. Thus what is saved is applicability of all the provisions of the old Acts where the Arbitral proceedings have commenced before the cut off date and it is further clarified in second portion of the saving clause viz., section 85(2)(a) that the new Act will apply where the Arbitral proceedings have commenced after the cut off date. 33. Mr. A.K. Ganguli, the senior advocate, appeared for Himachal Pradesh State Electricity Board (CA 61 of 1999). He supported the impugned judgment of the High Court. He drew distinction between the various provisions of the old Act and the new Act and said that the enforcement of the award under the new Act would not be compatible with the arbitration proceedings held under the old Act resulting in the award. Any restricted interpretation to the expression 'arbitral proceedings' appearing in section 85(2)(a) would lead to several anomalies. One such instance was that under the old Act arbitrator would not be require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal 1997 (1) SCC 650 this Court was examining the provisions of section 217(1) and (2)(a)( b) and (4) of the Motor Vehicles Act, 1988, which contained repeal and saving provisions of the Motor Vehicles Act, 1939. The Court examined various judgments of this Court and Treatises on the rules of interpretation and said : "22. Whenever an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. The effect thereof is to obliterate the Act completely from the record of Parliament as if it had never been passed; it never existed except for the purpose of those actions which were commenced, prosecuted and concluded while it was an existing law. Legal fiction is one which is not an actual reality and which the law recognises and the court accepts as a reality. Therefore, in case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances." 35. On the question on the righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e immediately before 1-12-1956. This Court said that there was no justification for the argument put forward on behalf of the appellants. The Court proceeded to repeal this argument as under : "The result of the Adaptation of Laws Order, 1956 so far as the Act was concerned, was that the provisions of that Act were no longer applicable or in force in Bellary district. To put it differently, the Act was repealed so far as the area of Bellary district was concerned. Repeal of an Act means revocation or abrogation of the Act and, in our opinion, section 6 of the General Clauses Act applies even in the case of a partial repeal or repeal of part of an Act. Section 6 of the General Clauses Act states : "Effect of repeal. - Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- ****** (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or ****** " Section 3(19) of the General Clauses Act defines an 'enactment' as including 'a Regulation and also as including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w meaning of the phrase 'in relation to arbitral proceedings' is to be accepted, it is likely to create great deal of confusion with regard to the matters where award is made under the old Act. Provisions for the conduct of arbitral proceedings are vastly different in both the old and the New Acts. Challenge of award can be with reference to the conduct of arbitral proceedings. An interpretation which leads to unjust and inconvenient results cannot be accepted. 7.A foreign award given after the commencement of the new Act can be enforced only under the new Act. There is no vested right to have the foreign award enforced under the Foreign Awards Act [Foreign Awards (Recognition and Enforcement) Act, 1961]. 37. Section 85(2)(a) Act is in two limbs : (1) Provisions of the old Act shall apply in relation to arbitral proceedings which commenced before the new Act came into force unless otherwise agreed by the parties, and (2) new Act shall apply in relation to arbitral proceedings which commenced on or after the new Act came into force. First limb can further be bifurcated into two : (a) Provisions of old Act shall apply in relation to arbitral proceedings commenced before the new Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the coming into force of the new Act. Section 10 of the new Act provides that parties are free to determine the number of arbitrators, provided that such number shall not be an even number. Further failing the determination of odd number of arbitrators, the arbitral Tribunal shall consist of a sole arbitrator. This Court upheld the validity of the arbitration agreement dated 14-12-1993 and directed the Chief Justice of the High Court concerned to appoint the third arbitrator under section 11(4)(b) of the new Act in view of the failure of the two appointed arbitrators to appoint the third arbitrator. In this case it may be noticed that the respondent had invoked arbitration clause in the agreement by letter dated 19-1-1996 which was received by the appellant on 31-1-1996. The arbitral proceedings would, therefore, commence under section 21 of the new Act on 31-1-1996 as by that time new Act had come into force. 39. In this view of the matter, section 6 of the General Clauses Act would be inapplicable. It is, therefore, not necessary for us to examine if any right to enforce the award under the old Act accrued to a party when arbitral proceedings had commenced before the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the award given under the old Act is said to be enforced under the new Act. Both the Acts are vastly different to each other. It has been rightly contended that when arbitration proceedings are held under the old Act, the parties and the arbitrator keep in view the provisions of that Act for the enforcement of the award. As noted above, under the old Act, there is no requirement for the arbitrator to give reasons for the award. That is not mandatory under the new Act. Section 27 of the old Act provides that arbitrator or umpire may, if they think fit, make an interim award, unless of course different intention appears from the arbitration agreement. Interim award is also an award and can be enforced in the same way as the final award. It would certainly be a paradoxical situation if for the interim award, though given after the coming into force of the new Act, it would still be the old Act which would apply and for the final award, it would be the new Act. Yet another instance would be when under section 13 of the old Act, the arbitrators or umpire have power to state a special case for the opinion of the Court on any question of law involved in the proceedings. Under sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no reason why the Legislature should not have provided for an appeal against the opinion or against the reference which led to the opinion. The scheme of the Act shows that the Legislature wanted to provide for an appeal only when there is to be a decision by the court binding on the parties, not when it tenders an opinion which is not binding on the arbitrators and which is not to be incorporated in the award. It might be that the arbitrator may choose to act upon the opinion. But that is not for the reason that it is a binding determination or a decision. We have, therefore, no hesitation in holding that the appeals are incompetent." 42. Section 85(2)(a) is the saving clause. It exempts the old Act from complete obliteration so far as pending arbitration proceedings are concerned. That would include saving of whole of the old Act uptill the time of the enforcement of the award. This section 85(2)(a) prevents the accrued right under the old Act from being affected. Saving provision preserves the existing right accrued under the old Act. There is a presumption that Legislature does not intend to limit or take away vested rights unless the language clearly points to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he events specified in statute.' We think the observations of Lord Morris in Director of Public Works' case (supra) are quite apt which have been quoted elsewhere in the judgment. In M.S. Shivanda's case (supra) this Court again said that if the right created by the statute is of an enduring character and has vested in the person, the right cannot be taken away because the statute by which it was created has expired. In Hemilton Gell's case (supra) the Court of Appeal referred to the decision of the House of Lords in Abott's case (supra). In the case before it, the Court said that under the old Act (the Agricultural Holdings Act, 1908) which was repealed by the Agricultural Holdings Act, 1914 necessary event had happened under which the tenant 'acquired a right' which would accrue when he was quitting his holding to receive compensation from the landlord. The event which occurred was the notice by the landlord to quit to the tenant in view of a sale of the holding. While section 11 of the 1908 Act treated this as unreasonable disturbance to the tenant entitling him to compensation, the latter Act, 1914 repealed section 11. The Court held that in spite of the repeal of section 11 te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would apply when it approached the High Court under sections 14 and 17 for making the award rule of the Court. It was only later on that it changed the stand and now took the position that new Act would apply and for that purpose filed an application for execution of the award. By that time limitation to set aside the award under the new Act had elapsed. The Appellant itself led the respondent SAIL in believing that the old Act would apply. SAIL had filed objections to the award under section 30 after notice for filing of the award was received by it on the application filed by the Thyssen under sections 14 and 17. We have been informed that numerous such matters are pending all over the country where the award in similar circumstances is sought to be enforced or set aside under the provisions of the old Act. We, therefore, cannot adopt a construction which would lead to such anomalous situations where the party seeking to have the award set aside finds himself without any remedy. We are, therefore, of the opinion that it would be the provisions of the old Act that would apply to the enforcement of the award in the case of Civil Appeal No. 6036 of 1998. Any other construction on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot agree to the applicability of the old Act after the new Act has come into force when arbitral proceedings under the old Act have not commenced though the arbitral agreement was under the old Act. Arbitration clause in the contract in the case of Rani Constructions (Civil Appeal No. 61 of 1999) uses the expression 'for the time being in force' meaning thereby that provision of that Act would apply to the arbitration proceedings which will be in force at the relevant time when arbitration proceedings are held. We have been referred to two decisions - one of the Bombay High Court and the other of Madhya Pradesh High Court on the interpretation of the expression 'for the time being in force' and we agree with them that the expression aforementioned not only refers to the law in force at the time the arbitration agreement was entered into but also to any law that may be in force for the conduct of arbitration proceedings, which would also include the enforcement of the award as well. Expression 'unless otherwise agreed' as appearing in section 85(2)(a) of the new Act would clearly apply in the case of Rani Constructions in Civil Appeal No. 61 of 1999. Parties were clear in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the old Act would continue to apply to the pending proceedings by virtue of the said saving clause in section 85, it simultaneously provides that the parties can agree to the contrary. Such a provision leaving it to the discretion of the parties to the proceedings to decide about the procedure to be followed - other in terms of the new Act or the old Act - is certainly in consonance with the scheme of the Act, whereunder most of the provisions of the new Act, the procedure regarding various stages of the arbitration proceedings is made subject to the agreement to the contrary between the parties, thereby giving ample freedom to the parties to decide about the procedure to be followed in such proceedings; being so, it is but natural that the Legislature in its wisdom has left it to the option of the parties in the pending proceedings to choose the procedure for such pending proceedings. The reference 'otherwise agreed by the parties' in section 85(2)(c) of the new Act, therefore, would include an agreement already entered into between the parties even prior to enforcement of the new Act as also the agreement entered into after enforcement of the new Act. Such a conclusion is bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onvention) Act, 1937. The Foreign Awards Act and even the 1937 Act contain provisions only for the enforcement of the foreign award and not for the arbitral proceedings. The Arbitral proceedings and enforcement of the award are two separate stages in the whole process of arbitration. When the Foreign Awards Act does not contain any provision for arbitral proceedings it is difficult to agree to the argument that in spite of that the applicability of the Foreign Awards Act is saved by virtue of section 85(2)(a). As a matter of fact if we examine the provisions of Foreign Awards Act and the new Act there is not much difference for the enforcement of the foreign award, under the Foreign Awards Act when the Court is satisfied that the foreign award is enforceable under that Act the Court shall order the award to be filed and shall proceed to pronounce judgment accordingly and upon the judgment so pronounced a decree shall follow. Sections 7 and 8 of the Foreign Awards Act respectively prescribe the conditions for enforcement of a foreign award and the evidence to be produced by the party applying for its enforcement. Definition of foreign award is same in both the enactments. Sections 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that could be said to have been acquired by a party when arbitral proceedings are held in a place resulting in a foreign award to have that award enforced under the Foreign Awards Act. 56. We, therefore, hold that the award given on 24-9-1997 in the case of Thyssen Stahlunion GMBH v. Steel Authority of India Ltd. (Civil Appeal No. 6036 of 1998) when the arbitral proceedings commenced before the Arbitration and Conciliation Act, 1996 came into force on 25-1-1996, would be enforced under the provisions of Arbitration Act, 1940. We also hold that clause 25 containing the arbitration agreement in the case of M/s. Rani Constructions (P.) Ltd. v. Himachal Pradesh State Electricity Board (Civil Appeal No. 61 of 1999) does admit of interpretation that the case is governed by the provisions of the Arbitration and Conciliation Act, 1996. We further hold that the foreign award given in the case of Western Shipbreaking Corpn. v. Clareheaven Ltd. (Civil Appeal No. 4928 of 1997) would be governed by the provisions of the Arbitration and Conciliation Act, 1996. Thus, we affirm the decisions of the Delhi High Court in Execution Petition No. 47 of 1998 and of the Gujarat High Court in Civil Revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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