12 五月 2023

Arbitration – 2015 amendments not applicable where notice invoking arbitration is issued prior to amendment

The Supreme Court has held that in a case where the notice invoking arbitration is issued prior to the Arbitration and Conciliation (Amendment) Act, 2015 and the application under Section 11 for appointment of an arbitrator is made post Amendment Act, 2015, the provisions of pre-Amendment Act, 2015 shall be applicable and not the Amendment Act, 2015.

In the case Shree Vishnu Constructions v. Engineer in Chief Military Engineering Service [Judgement dated 9 May 2023], the notice invoking arbitration clause was issued on 26 December 2013, i.e., much prior to the Amendment Act, 2015 while the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 was preferred/filed on 27 April 2016, i.e., after the amendment Act came into force.

The Apex Court hence upheld the impugned decision of the High Court and observed that the lower Court had rightly entered into the question of ‘accord’ and ‘satisfaction’ and had rightly dismissed the application under Section 11(6), applying the provisions prevailing prior to the Amendment.

The Appellant before the Supreme Court has contended that in view of the Arbitration and Conciliation (Amendment) Act, 2015 by which Section 11(6A) came to be inserted, while deciding the application for appointment of arbitrator, the Court would have a very limited jurisdiction. According to the Appellant, the Court was to consider only whether there is an existence of the arbitration agreement or not, and the issue with respect to the ‘accord and satisfaction’ has to be left to be decided by the arbitrator / arbitral tribunal.

The Supreme Court in this regard also observed that the decisions of the Court in the cases of Parmar Constructions Company and Pardeep Vinod Construction Company were not per incuriam and/or in conflict with the decision of this Court in the case of BCCI.

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