TMI Blog1999 (10) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - CIVIL APPEAL NO. 6036 OF 1998 - - - Dated:- 7-10-1999 - D.P. WADHWA AND M.B. SHAH, JJ. JUDGMENT The Facts Wadhwa, J. - These three appeals raise three different questions relating to the construction and interpretation of section 85 of the Arbitration and Conciliation Act, 1996 ( the new Act ) which contains repeal and saving provision of the three Acts, namely, the Arbitration (Protocol and Convention) Act, 1937, the Arbitration Act, 1940 ( the old Act ) the Foreign Awards (Recognition and Enforcement) Act, 1961 (the Foreign Awards Act ). 2. This section 85 we reproduce at the outset : "85. Repeal and Saving - (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.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 cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an application under section 151 of the Code of Civil Procedure for stay of the proceedings. On the following day Thyssen filed an application in the High Court for execution of the award under the new Act (Execution Petition No. 47 of 1998). The ground taken was that the arbitration proceedings had been terminated with the making of the award on 24-9-1997 and, therefore, the new Act was applicable for enforcement of the award. The respondent, Steel Authority of India Ltd. (SAIL) opposed the maintainability of the execution petition. SAIL also filed objections to the award on various grounds under the old Act. The question which arose for consideration is : Whether the award would be governed by the new Act for its enforcement or whether provisions of the old Act would apply ? 5. A learned single Judge of the Delhi High Court by judgment dated 21-9-1998 held that proceedings would be governed by the old Act. Thyssen Stahlunion GMBH feeling aggrieved filed this appeal (Civil Appeal 6036 of 1998). 6. In the case of Western Shipbreaking Corporation (Civil Appeal No. 4928 of 1997) under memorandum of agreement dated 4-11-1994. Clareheaven Ltd. agreed to sell to Western S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll apply to all arbitration proceedings under this clause." 10. Disputes having arisen, these were referred to the sole arbitrator on 4-12-1993. The arbitrator gave his award on 23-2-1996 after the new Act had come into force. On account of difference of opinion in two judgments of the Himachal Pradesh High Court, both rendered by single Judges, as to whether it is old or new Act will apply, a learned single Judge of the High Court referred the following question to a larger Bench : "Whether the agreement referred to in section 85(2)( a ) of the Act of 1996 for the purpose of applicability of the said Act to the pending arbitral proceedings which had already commenced under the Act of 1940 is one necessarily to be entered into after the commencement of the Act of 1996 or any clause to that effect in an agreement already entered into between the parties before the enforcement of the Act of 1996 would sufficient for that purpose." 11. Reference question does not appear to have been happily worded. What it means is that when clause ( a ) of section 85(2) uses the expression unless otherwise agreed by the parties can the parties agree for the applicability of the new Act befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any time after the making of the arbitral award but before its enforcement. During the course of discussion this Court referred to the statement of objects and reasons which led to the promulgation of the new Act and said : "The 1996 Act (new Act) is very different from the Arbitration Act, 1940 (old Act). The provisions of this Act have, therefore, to be interpreted and construed independently and in fact reference to the 1940 Act may actually lead to misconstruction. In other words, the provisions of the 1996 Act (new Act) have to be interpreted being uninfluenced by the principles underlying the 1940 Act (old Act). In order to get help in construing these provisions, it is more relevant to refer to the UNCITRAL Model Law rather than the 1940 Act." 4.Law governing arbitration proceedings can be different than that governing the award. In this connection reference may be made to a decision of this Court in Sumitomo Heavy Industries Ltd. v. ONGC Ltd. [1998] (1) SCC 305. 15. In Sumitomo Heavy Industries Ltd s case ( supra ) under the arbitration agreement between the parties proceedings were to be held at London in accordance with the provisions of International Chamb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be enforced, and the need to challenge it arises if it is being enforced. The enforcement process is subsequent to and independent of the proceedings before the arbitrator. It is not governed by the curial or procedural law that governed the procedure that the arbitrator followed in the conduct of the arbitration." 5.Section 85 of the new Act provides for a limited repeal. This section be contrasted with section 48 of the old Act, which is as under : "48. Saving for pending references - The provisions of this Act shall not apply to any reference pending at the 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 conti-nue to apply." This departure from the language used in section 48 is deliberate and has to be given effect to while considering the scope of section 85 . 6.Assuming that section 6 of the General Clauses Act applies, the question whether a party gets a right at the time when the arbitration proceedings commenced under the Act and that the award given after coming into force of Act would yet be governed under the Act, can be answered only if any ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish that the language of section 2( b ) was sufficient to reserve to him the right for which he contends, he would have to overcome further difficulties. That enactment only renders "rights accrued" unaffected by the repeal subject to any express provisions of this Act in relation thereto ." 17. This Court in Hungerford Investment Trust Ltd. s case ( supra ) followed decision of the Privy Council in Abbott s case ( supra ) holding that the mere right to take advantage of provisions of an Act is not an accrued right. 18. In D.C. Bhatia s case ( supra ) the question which arose for consideration before this Court related to the interpretation and constitutional validity of section 3( c ) of the Delhi Rent Control Act. The Delhi Rent Control Act was amended with effect from 1-12-1988 when section 3( c ) was introduced which provided that the provisions of that Act will not apply to any property at a monthly rent exceeding Rs. 3,500. This Court while upholding the constitutional validity of the provisions as contained in section 3( c ) of Delhi Rent Control Act observed that "We are unable to uphold the contention that the tenants had acquired a vested right in the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been repealed. But, what has been acquired under the Repealed Act cannot be disturbed. But, if any new or further step is needed to be taken under the Act, that cannot be taken even after the Act is repealed." (p. 122) 7.The expression in relation to appearing in section 85(2)( a ) of the new Act refers to stage of arbitration proceedings under the Act. Reference is made to various provisions of the new Act employing the words arbitral proceedings or arbitral proceedings and award to stress that in the new Act there are different stages in the process of arbitration. Section 42 5 of the new Act uses the expression arising out of that agreement and the arbitral proceedings . There is a difference between the expressions arising out of and that relating to . 8.Section 36 6 of the new Act is a deeming provision which provides for the enforcement of the award as if it is a decree of a civil court under the Civil Procedure Code. This stage comes after application for setting aside of the arbitral award under section 34 has been dealt with. This Court in Oil and Natural Gas Commission v. Western Co. of North America [1987 (1) SCR 1024] while dealing with the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is section." The learned single Judge of the High Court considered the expression Law for the time being in force and said that the natural import of the words for the time being indicate indefinite future state of thing, and in this connection reference was made to Stroud s Judicial Dictionary, (3rd Edition) Vol. IV page 3030 which is as follows : "The phrase for the time being may, according to its context, mean the time present, or denote a single period of time, but its general sense is that of time indefinite, and refers to an indefinite state of facts which will arise in the future, and which may (and probably will) vary from time to time ( Ellison v. Thomas ) (1861) 31 LJ Ch 867 and [1862] 32 LJ Ch 32; Coles v. Pack [1869] LR 5 CP 65. See also Re Gunter s Settlement Trust [1949] Ch 502." High Court said that in their ordinary sense, the words law for the time being in force referred not only to the law in force at the time of the passing of the Defence of India Act but also to any law that may be passed subsequently and which is in force at the time when the question of applicability of such law to arbitrations held under said Section 19 arose. 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in restraint of legal proceedings. Agreement can be entered into even before or after the new Act comes into force. 4.There is no right in procedure. Right to challenge the award is still there in the new Act though now in the restricted form. It cannot be said that any prejudice has been caused to a party when it has to challenge the award under the new Act. The High Court was wrong that the arbitration clause was hit by section 28 of the Contract Act and that the agreement for the application of the new Act has to be entered into only after the coming into force of the new Act. 21. At this stage itself we may also note the submissions made by Mr. Krishnan Venugopal, the counsel appearing for Clareheaven Ltd. (CA 4928 of 1997) in support of the decision of the High Court holding that for enforcement of the foreign award new Act would apply : 1.Section 85(2)( a ) cannot save the operation of the Foreign Awards Act. On true construction of clause ( a ) it will have no application to the Foreign Awards Act, 1961. There is no accrued right in favour of the appellant in CA No. 4928/97 to challenge the foreign award under the Foreign Awards Act, 1961. Reference in this connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. In Hamilton Gell v. White [1922] (2) KB 422 (Court of Appeal) facts are plainly stated in the head note, which we quote : "In September, 1920, the landlord of an agricultural holding, being desirous of selling it, gave his tenant notice to quit. By the Agricultural Holdings Act, 1914, when the tenancy of a holding is determined by a notice to quit given in view of a sale of the holding the notice to quit is treated as an unreasonable disturbance within section 11 of the Agricultural Holdings Act, 1908, and the tenant is entitled to compensation upon the terms and subject to the conditions of that section. One of the conditions of the tenant s right to compensation under that section was that he should within two months after the receipt of the notice to quit give the landlord notice of his intention to claim compensation, and another condition was that he should make his claim for compensation within three months after quitting the holding. The tenant duly gave notice of his intention to claim compensation within the time so limited; but before the tenancy had expired, and therefore before he could satisfy the second condition, section 11 of the Act of 1908 was repealed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenant notice to quit. Under those circumstances the tenant has acquired a right, which would accrue when he has quitted his holding, to receive compensation. A case was cited in support of the landlord s contention : Abbott v. Minister for Lands ([1895] A.C. 425), where the question was whether a man who had purchased certain land was entitled to exercise a right to make additional purchases of adjoining land under the powers conferred by a repealed Act, the repealing Act containing the usual saving clause. The Privy Council held that he was not. They said (1) that the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed to be a right accrued within the meaning of the enactment. I think that bears out the proposition that I have stated above. The result is that the tenant in this case has acquired a right to claim compensation under the Act of 1908 on his quitting his holding, and therefore the second question asked by the arbitrator should be answered in the affirmative." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended by the English firm that the foreign arbitral award could only qualify as a Convention award for the purpose of 1975 Act if the State in which it was made was already a party to the Convention at the date of the award. Accordingly, it was contended that the award was not a convention award and could not be enforced by the State of Kuwait against the English firm. The plea of the English firm was negatived. It was held that the award was maintainable if the State in which the award was made is a party to the convention at the date when proceedings to enforce the award began, even if it was not a party at the date when the award was made. The Court considered in all section 3 of the 1975 Act which provided : An award made in pursuance to an arbitration agreement in the territory of a State, other than the United Kingdom, which is a party to the New York Convention shall, subject to the following provisions of this Act, be enforceable. . . . The Court said that the use of the present tense in the word is in the phrase which is a party to the New York Convention must, as a matter of the ordinary and natural interpretation of the words used, mean that the phrase relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment appearing in section 129C of the Customs Act, 1962. Section 129C of the Customs Act, 1962, in relevant part, is as under : "129-C. Procedure of Appellate Tribunal - (1) The powers and functions of Appellate Tribunal may be exercised and discharged by Benches constituted by the President from amongst the members thereof. (2) Subject to the provisions contained in sub-sections (3) and (4) a Bench shall consist of one judicial member and one technical member. (3) Every appeal against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment shall be heard by a Special Bench constituted by the President for hearing such appeals and such Bench shall consist of not less than two members and shall include at least one judicial member and one technical member." This Court held that the appeal could have been heard and decided by a member of the Tribunal, sitting singly. It said that the phrase relation to is, ordinarily, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no difference between the expression arising out or in relation to or arising out of which are expansive expressions and also rather interchangeable. The expression arising out of has been used in section 42 of the new Act. As to what these expressions mean, reference may be made to decisions of the Supreme Court in Doypack Systems (P.) Ltd. v. Union of India [1988 2 SCC 299], Mansukhlal Dhanraj Jain v. Eknath Vithal Ogale [1995 2 SCC 665] and Dhanrajamal Govindram v. Shamji Kalidas Co. [1961 3 SCR 1020]. 27. In Doypack Systems (P.) Ltd. s case ( supra ) this Court was considering the expression in relation to . In the context, it will be appropriate to quote paras 48, 49 and 50 of the judgment, which are as under : "48. In view of the language used in the relevant provisions, it appears to us that section 3 has two limbs : ( i ) textile undertakings; and ( ii ) right, title and interest of the company in relation to every such textile undertaking. The expression (textile undertakings) has been defined in section 2( k ) to mean the six textile undertakings of the company specified therein. The definition of the said expression in section 2( k ) is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the term relate is also defined as meaning to bring into association or connection with. It has been clearly mentioned that relating to has been held to be equivalent to or synonymous with as to concerning with and pertaining to . The expressions pertaining to is an expression of expansion and not of contraction." (p. 328) 28. In Mansukhlal Dhanraj Jain s case ( supra ) this Court was considering section 41(1) of the Presidency Small Cause Courts Act, 1882, and the scope of the expression relating to the recovery of possession of any immovable property appearing in that section. Section 41(1) is as under : " 41. (1) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force but subject to the provisions of sub-section (2). The Court of Small Causes shall have jurisdiction to entertain and try all suits and proceedings between a licensor and licensee, or a landlord and tenant, relating to the recovery of possession of any immovable property situated in Greater Bombay, or relating to the recovery of the licence fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Bansidhar v. State of Rajasthan [1989] 2 SCC 557. 31. In Shah Sadiq Sons case ( supra ) this Court was considering section 6 of General Clauses Act, 1897 with reference to the Indian Income-tax Act, 1922 repealed by section 297 of the Income-tax Act, 1961. This is how this Court dealt with the question raised before it : "14. Under the Indian Income-tax Act of 1922, the assessee was entitled to carry forward the losses of the speculation business and set off such losses against profits made from that business in future years. The right of carrying forward and set off accrued to the assessee under the Act of 1922. A right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly or by necessary implication. This is the effect of Section 6 of the General Clauses Act, 1897. 15. In this case the savings provision in the repealing statute is not exhaustive of the rights which are saved or which survive the repeal of the statute under which such rights had accrued. In other words, whatever rights are expressly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port Corpn. [1980] 1 SCC 149, as under : "It may be, therefore, that under some repealed enactment, a right has been given but that, in respect of it, some investigation or legal proceeding is necessary. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should be or should not be given. On a repeal, the former is preserved by the Interpretation Act. The latter is not." [Emphasis supplied] (p. 156) 32. Mr. R.P. Bhatt, the senior advocate appearing for Western Shipbreaking Corporation (CA 4928 of 1997) submitted that it would be the Foreign Awards Act that would apply and not the new Act. Mr. Bhatt supported Mr. Dipankar Gupta in his submissions. All the three Acts are saved by section 85(2)( a ). Arbitral proceedings include enforcement of award otherwise these Acts would become redundant. He said that the arbitration proceedings were governed by the laws in the U.K. under the (UK) Arbitration Act, 1950. Proceedings began on 15-5-1995. Award was given in England on 25-2-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not disputed that provisions of the new Act were vastly different than that of the old Act. He said use of the expression provisions in section 85(2)( a ) would include all provisions of the old Act, insofar as they have a nexus with the arbitral award. Enforcement of the award is integral part of the process in relation to arbitral proceedings . Reference was also made to the meaning of expression in relation to and to various decisions of this Court in that connection. Provisions of section 6 of General Clauses Act were also invoked to contend that provisions of the old Act were saved which included provisions for enforcement of the award under the old Act. Lastly, Mr. Ganguli submitted that the agreement contemplated in the later part of section 85(2)( a ) would be entered into only after the enforcement of the new Act and that is 25-1-1996. Any agreement if entered into before this date would be void and would be hit by section 28 of the Contract Act and as rightly held so by the High Court. Accordingly, Mr. Ganguli said that the clause in the arbitration agreement where the parties agreed that provisions of the old Act or any statutory modification or re-enactment the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a right to purchase the electrical undertaking which had accrued to the Electricity Board was saved by section 6 of the GC Act." 36. In G. Ekambarappa v. Excess Profits Tax Officer [1967] 3 SCR 864. In that case district Bellary, which belonged to Part A State of Madras in British India, was merged in Part B State of Mysore on 1-10-1953. The excess Profits Tax Act, 1940 applied only to British India. It ceased to apply to the Bellary after it became part of the State of Mysore. Then, after States Reorganisation Act, 1956, Mysore also became Part A State. However, by the Adaptation of Laws (No. 3) Order dated 31-12-1956, the Excess Profits Tax Act was to extend "to the whole of India except the territories which immediately before 1-11-1956 were comprised in Part B States". The result of adaptation was that all the provisions of the Excess Profits Tax Act, 1940 stood repealed so far as the district of Bellary was concerned with effect from 21-12-1956. Excess Profits Tax Officer issued a notice under section 15 of the Excess Profits Tax Act to the appellants in 1960 in respect of the period from 30-10-1943 to 30-10-1944. It was contended by them that it was not a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the firm continued to be liable to be proceeded against under that section for the profits which had escaped taxation." The Conclusions : For the reasons to follow, we hold : 1.The provisions of the old Act (Arbitration Act, 1940) shall apply in relation to arbitral proceedings which have commenced before coming into force of the new Act (The Arbitration and Conciliation Act, 1996). 2.The phrase in relation to arbitral proceedings cannot be given a narrow meaning to mean only pendency of the arbitration 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 required to be taken under the old Act for award becoming decree under section 17 9 thereof and also appeal arising thereunder. 3.In cases where arbitral proceedings have commenced before coming into force of the new Act and are pending before the arbitrator, it is open to the parties to agree that new Act be applicable to such arbitral proceedings and they can so agree even before the coming into force of the new Act. 4.The new Act would be applicable in relation to arbitral pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. First 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. 38. The contention that if it is accepted that the expression in relation to arbitral proceedings would include proceedings for the enforcement of the award as well, the second limb of section 85(2)( a ) would become superfluous. We do not think that would be so. The second limb also takes into account the arbitration agreement entered into under the old Act when the arbitral proceedings commenced after the coming into force of the new Act. Reference in this connection be made to a decision of this Court in MMTC Ltd. v. Sterlite Industries (India) Ltd. [1996 6 SCC 716] where this Court held that validity of an arbitration agreement did not depend on the number of arbitrators specified in section 7 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 old Act may actually lead to the misconstruction of the provisions of the 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 (supra) the award was given before Kuwait became party to the New York Convention recognised by Order in Council in England. 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 party to the Convention. It negatived the contention that on the date the award was given Kuwait was not party to the New York Convention. 41. In Pepper v. Hart [1993 (1) All. ER 42] House of Lords for the first time accepted the principle that Judges could refer to the Parliamentary debates in order to ascertain the meaning of an Act of Parliament. Lord Griffiths said (at page 50) : "The days have long passed when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such question for the opinion of the Court. Section 14 of the old Act provides for the award to be signed and filed. Under sub-section (3) of section 14 where the arbitrators or umpire state a special case under clause ( b ) of section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of the award. This Court said : "We do not think that an opinion given under the first part of section 13( b ) should be added to and form part of the award. The reason why the opinion given under the latter part of section 13( b ) should be added to and becomes part of the award is because the arbitrators have stated the award wholly or in part in the form of a special case of such question for the opinion of the court. This view is further strengthened by the circumstance that under section 39(1)( ii ), an appeal is provided only against an order on an award stated in the form of a special case. The reason why an appeal is provided for in such a case is that the opinion of the court has to be added to and form part of the award and it therefore becomes a decision of the court, notwiths ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne this question with reference to the provisions of section 6 of the General Clauses Act if it could be said that when the arbitral proceedings have commenced under the old Act, a party has acquired a right to have the award given thereafter enforced under the old Act. The question that arises for consideration is if a right has accrued to the party or it is merely an inchoate right. The three cases referred to, namely, Abbott s case ( supra ); Hungerfort Investment Trust Ltd. s case ( supra ) and D.C. Bhatia s case ( supra ) show that something more is required for vested right to accrue. Right did exist but then nothing was done to show that any act was done or advantage taken of the enactment under which the right existed till it was repealed. An Act gave the right and the new Act which repealed the old Act took away that right. Mere right to take advantage of the provision of an Act is not a right accrued. 45. In Shah Sadiq Sons s case ( supra ) this court said that right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 7 thereof, exercising the option to purchase the undertaking. It was held that a right to purchase the electrical undertaking, which had accrued to the Electricity Board, was saved by section 6 of the General Clauses Act. In the case of G. Ekambarappa [1967 3 SCR 864] there was repeal of an enactment levying tax. No assessment had been made by the time the Act was repealed and there could, therefore, be no liability. Nevertheless, this Court said that liability to tax arose immediately at the end of the accounting period when the Act was in force though the liability had not been quantified by assessment proceedings. The Court upheld validity of the notice for assessment of proceedings after the repeal of the Act. 46. Principles enunciated in the judgments show as to when a right accrues to a party under the repealed Act. It is not necessary that for the right to accrue that legal proceedings must be pending when the new Act comes into force. To have the award enforced when arbitral proceedings commenced under the old Act under that very Act is certainly an accrued right. Consequences for the parties against whom award is given after arbitral proceedings have been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85. We may, however, note that under section 48 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 interpret section 85(2)( a ). 48. In Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] SCR 987, this Court said that pre-existing right of appeal is not destroyed by the amendment if the amendment is not retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. In this case, law had changed and the appellate authority could exercise jurisdiction only if the appeal was accompanied by the deposit of the assessed tax when before the amendment of the provision it only provided for deposit of admitted tax. The Court said that any requirement for deposit of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties could not have agreed to the application of the new Act till they knew the provisions thereof and that would mean that any such agreement as mentioned in the arbitration clause could be entered into only after the new Act had come into force. When the agreement uses the expressions unless otherwise agreed and law in force it does give option to the parties to agree that new Act would apply to the pending arbitration proceedings. That agreement can be entered into even before the new Act comes into force and it cannot be said that agreement has to be entered into only after coming into force of the new Act. 50. Mr. Desai had referred to a decision of the Bombay High Court (Goa Bench) rendered by single Judge in Reshma Constructions v. State of Goa [1999 (1) MLJ 462]. In that case arbitration clause in the contract provided as under : "Subject as aforesaid, the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause." 51. The Court held that these terms in the clause disclosed that the parties had agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to arbitration. That being so parties can also agree that the provisions of the arbitration law existing at that time would apply to the arbitral proceedings. It is not necessary for the parties to know what law will be in force at the time of the conduct of arbitration proceedings. They can always agree that provisions that are in force at the relevant time would apply. In this view of the matter, if the parties have agreed that at the relevant time provisions of law as existing at that time would apply, there cannot be any objection to that. Thus, construing the clause 25, in Rani Constructions (CA 61/99) new Act will apply. 53. Foreign Awards Act gives the party right to enforce the foreign award under that Act. But before that right is exercised Foreign Awards Act has been repealed. It cannot, therefore, be said that any right had accrued to the party for him to claim to enforce the foreign award under the Foreign Awards Act. After the repeal of the Foreign Awards Act a foreign award can now be enforced under the new Act on the basis of the provisions contained in Part II of the new Act depending whether it is a New York Convention Award or Geneva Convention Award. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decree. Thus if provisions of the Foreign Awards Act and the new Act relating to enforcement of the foreign award are juxtaposed there would appear to be hardly any difference. 55. Again a bare reading of the Foreign Awards Act, and the Arbitration (Protocol and Convention) Act, 1937 would show that these two enactments are concerned only with recognition and enforcement of the foreign awards and do not contain provisions for the conduct of arbitral proceedings which would, of necessity, have taken place in a foreign country. The provisions of section 85(2)( a ) in so far these apply to the Foreign Awards Act and 1937 Act, would appear to be quite superfluous. Literal interpretation would render section 85(2)( a ) unworkable. Section 85(2)( a ) provides for a dividing line dependent on commencement of arbitral proceedings which expression would necessarily refer to section 21 10 of the new Act. This Court has relied on this section as to when arbitral proceedings commence in the case of Shetty s Construction Co. (P.) Ltd. v. Konkan Railway Construction [1998 (5) SCC 599]. Section 2(2) 1 1 read with section 2(7) 12 and section 21 falling in Part-I of the new Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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