Dr Mohan R Bolla Law Lecture Commencement of arbitration proceedings.
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The document discusses the interpretation of Section 85 of the Arbitration and Conciliation Act, 1996, which contains the repeal and saving provisions of previous arbitration acts. It notes that Section 85(2) is a transitional provision that must take into account the terms of any arbitration clause and the conduct of the parties. The commencement of arbitration proceedings may depend on the facts of each case and context. The date arbitration proceedings commence is important for determining which arbitration act applies.
![Arun Kumar, J.,
Delhi Transport Corporation Ltd. v.
Rose Advertising [(2003) 6 SCC 36].
the parties had entered into an agreement on 15.1.1993 regarding display of
advertisements on the body of DTC buses. DTC is the Delhi Transport Corporation
which runs the public road transport for commuters in the city and outskirts of
Delhi. The agreement was for a period of 3 years commencing from 15.1.1993
upto 14.1.1996. The agreement contained an arbitration clause. Dispute and
differences arose between the parties.
A request was made by the contractor on 9.1.1995 for appointment of arbitrator to
settle the disputes that had arisen between the parties. This was followed by
another letter dated 26th November, 1995 containing similar request. On 16th
January, 1996 the contractor filed in Court a petition under Section 20 of the old
Arbitration Act. The notice of the petition was issued to the opposite party i.e. the
appellant herein.
The counsel appearing for the appellant made a statement in Court on 19th July, 1996
that an arbitrator had already been appointed on 4th July, 1996 as per the terms
of the agreement. The petition thus became infructuous. The arbitrator conducted
the arbitration proceedings and ultimately made an award on 6th October, 1998.
To enforce the award the appellant filed an application under the 1996 Act which
was registered as an Execution Application.](https://image.slidesharecdn.com/commencementofarbitrationproceedings-170520010742/85/Dr-Mohan-R-Bolla-Law-Lecture-Commencement-of-arbitration-proceedings-2-320.jpg)
![Arun Kumar, J.,
Delhi Transport Corporation Ltd. v.
Rose Advertising [(2003) 6 SCC 36].
The appellant DTC contested the said application on grounds including
maintainability of the execution petition. The question of
maintainability was raised on the basis that the 1996 Act was not
applicable to the proceedings and therefore execution application
did not lie. The contention of the appellant before the High Court
was that the proceedings had commenced under the old Act and
the said Act would continue to govern the proceedings. The learned
Single Judge upheld the objection regarding maintainability of the
application. It was held that the Arbitration Act 1940 continued to
apply.
This was based on the view that the arbitration proceedings
commenced on the date when request for appointment of
arbitrator was made and that was prior to the coming into force of
the 1996 Act. Once the arbitration proceedings commenced,
Section 85 of the 1996 Act read with Section 21 would lead to the
conclusion that the old Act would continue to apply.](https://image.slidesharecdn.com/commencementofarbitrationproceedings-170520010742/85/Dr-Mohan-R-Bolla-Law-Lecture-Commencement-of-arbitration-proceedings-3-320.jpg)
![D.P. Wadhwa, J., Thyssen Stahlunion GMBH vs.
Steel Authority of India Ltd.
[ AIR 1999 SC 3923 ]
questions relating to the construction and
interpretation of Section 85 of the Arbitration
and Conciliation Act, 1996 which contains
repeal and saving provision of the three Acts,
namely, the Arbitration (Protocol and
Convention) Act, 1937, the Arbitration Act,
1940 the Foreign Awards (Recognition and
Enforcement) Act, 1961](https://image.slidesharecdn.com/commencementofarbitrationproceedings-170520010742/85/Dr-Mohan-R-Bolla-Law-Lecture-Commencement-of-arbitration-proceedings-4-320.jpg)
![D.P. Wadhwa, J., Thyssen Stahlunion GMBH vs.
Steel Authority of India Ltd.
[ AIR 1999 SC 3923 ]
Section 85 of the new Act we reproduce at the outset :
"55. 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 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;
(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."](https://image.slidesharecdn.com/commencementofarbitrationproceedings-170520010742/85/Dr-Mohan-R-Bolla-Law-Lecture-Commencement-of-arbitration-proceedings-5-320.jpg)
![Section 37 Appealable orders
• The Act as applicable to the present case, provides for a remedy of appeal
in terms of Section 37 of the Act. The same reads thus:-
• “37. Appealable orders. – (1) An appeal shall lie from the following orders
(and from no others) to the Court authorized by law to hear appeals from
original decrees of the Court passing the order, namely:- [(a) Refusing to
refer the parties to arbitration under section 8;
• (b) granting or refusing to grant any measure under section 9;
• (c) setting aside or refusing to set aside an arbitral award under section
• 34.] (2) An appeal shall also lie to a Court from an order of the arbitral
tribunal-
• (a) accepting the plea referred to in sub-section (2) or sub-section (3) of
section 16; or
• (b) granting or refusing to grant an interim measure under section 17. (3)
No second appeal shall lie from an order passed in appeal under this
section, but nothing in this section shall affect or take away any right to
appeal to the Supreme Court.”](https://image.slidesharecdn.com/commencementofarbitrationproceedings-170520010742/85/Dr-Mohan-R-Bolla-Law-Lecture-Commencement-of-arbitration-proceedings-10-320.jpg)
Dr Mohan R Bolla Law Lecture Commencement of arbitration proceedings.
- 2. Arun Kumar, J., Delhi Transport Corporation Ltd. v. Rose Advertising [(2003) 6 SCC 36]. the parties had entered into an agreement on 15.1.1993 regarding display of advertisements on the body of DTC buses. DTC is the Delhi Transport Corporation which runs the public road transport for commuters in the city and outskirts of Delhi. The agreement was for a period of 3 years commencing from 15.1.1993 upto 14.1.1996. The agreement contained an arbitration clause. Dispute and differences arose between the parties. A request was made by the contractor on 9.1.1995 for appointment of arbitrator to settle the disputes that had arisen between the parties. This was followed by another letter dated 26th November, 1995 containing similar request. On 16th January, 1996 the contractor filed in Court a petition under Section 20 of the old Arbitration Act. The notice of the petition was issued to the opposite party i.e. the appellant herein. The counsel appearing for the appellant made a statement in Court on 19th July, 1996 that an arbitrator had already been appointed on 4th July, 1996 as per the terms of the agreement. The petition thus became infructuous. The arbitrator conducted the arbitration proceedings and ultimately made an award on 6th October, 1998. To enforce the award the appellant filed an application under the 1996 Act which was registered as an Execution Application.
- 3. Arun Kumar, J., Delhi Transport Corporation Ltd. v. Rose Advertising [(2003) 6 SCC 36]. The appellant DTC contested the said application on grounds including maintainability of the execution petition. The question of maintainability was raised on the basis that the 1996 Act was not applicable to the proceedings and therefore execution application did not lie. The contention of the appellant before the High Court was that the proceedings had commenced under the old Act and the said Act would continue to govern the proceedings. The learned Single Judge upheld the objection regarding maintainability of the application. It was held that the Arbitration Act 1940 continued to apply. This was based on the view that the arbitration proceedings commenced on the date when request for appointment of arbitrator was made and that was prior to the coming into force of the 1996 Act. Once the arbitration proceedings commenced, Section 85 of the 1996 Act read with Section 21 would lead to the conclusion that the old Act would continue to apply.
- 4. D.P. Wadhwa, J., Thyssen Stahlunion GMBH vs. Steel Authority of India Ltd. [ AIR 1999 SC 3923 ] questions relating to the construction and interpretation of Section 85 of the Arbitration and Conciliation Act, 1996 which contains repeal and saving provision of the three Acts, namely, the Arbitration (Protocol and Convention) Act, 1937, the Arbitration Act, 1940 the Foreign Awards (Recognition and Enforcement) Act, 1961
- 5. D.P. Wadhwa, J., Thyssen Stahlunion GMBH vs. Steel Authority of India Ltd. [ AIR 1999 SC 3923 ] Section 85 of the new Act we reproduce at the outset : "55. 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 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; (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."
- 6. This Court found on facts that the arbitration clause, which is identical to the clause in the present case, showed that the parties had agreed to be governed by the law in force at the relevant time and such arbitration clauses were recognised under the new Act. This Court further found from the conduct of the arbitration proceedings and the participation of the parties therein that the parties had agreed to proceed under the 1996 Act and, accordingly, this Court upheld the judgment of the division bench of the High Court. In my view the said judgment applies to the present case. The point to be noted is that while construing section 85(2) of the 1996 Act, which is a transitional provision, the terms of the arbitration clause and the conduct of the parties were taken into account. Therefore, interpretation of section 85(2)(a) cannot be confined to section 21 of the 1996 Act. However, in cases where the new Act is applicable one has to go by section 21 and in which case arbitration proceedings will commence from the date when request is received by the respondent for referring the dispute to arbitration, unless the parties have agree to the contrary.
- 7. This Court found on facts that the arbitration clause, which is identical to the clause in the present case, showed that the parties had agreed to be governed by the law in force at the relevant time and such arbitration clauses were recognised under the new Act. This Court further found from the conduct of the arbitration proceedings and the participation of the parties therein that the parties had agreed to proceed under the 1996 Act and, accordingly, this Court upheld the judgment of the division bench of the High Court. In my view the said judgment applies to the present case. The point to be noted is that while construing section 85(2) of the 1996 Act, which is a transitional provision, the terms of the arbitration clause and the conduct of the parties were taken into account. Therefore, interpretation of section 85(2)(a) cannot be confined to section 21 of the 1996 Act. However, in cases where the new Act is applicable one has to go by section 21 and in which case arbitration proceedings will commence from the date when request is received by the respondent for referring the dispute to arbitration, unless the parties have agree to the contrary.
- 8. before the English Arbitration Act 1996, the expression "commencement of arbitration proceedings" depended upon the facts of each case. There was no single conclusive test to determine 'commencement". In a case, where it was necessary to consider whether one party had taken sufficient steps for setting arbitration in motion, the court has to consider the date of setting up of arbitral tribunal. In the matter involving the scope of reference the test of the state of dispute was relevant. Therefore, the expression "commencement of arbitration proceedings' had different meanings in various contexts. The learned authors have further observed that although notice to concur is an essential step, arbitration proceedings cannot be said to have commenced in practical sense till tribunal charged with authority stood duly constituted. It is for this reason that English Arbitration Act 1996 now provides under section 14 that commencement will take place from the date when notice to concur is served.
- 9. This view is supported by the judgment of the division bench of the Supreme Court in Delhi Transport Corporation Ltd. (supra), the parties had entered into an agreement on 15.1.1993 for display of advertisement on DTC buses in Delhi. The agreement was for a period of three years commencing from 15.1.1993. The agreement contained an arbitration clause. Disputes arose between the parties. A request was made by the contractor on 9.1.1995 for appointment of arbitrator to settle the disputes. This was followed by another letter dated 26.11.1995 containing a similar request. On 16.1.1996, he filed a petition under section 20 of the 1940 Act.
- 10. Section 37 Appealable orders • The Act as applicable to the present case, provides for a remedy of appeal in terms of Section 37 of the Act. The same reads thus:- • “37. Appealable orders. – (1) An appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely:- [(a) Refusing to refer the parties to arbitration under section 8; • (b) granting or refusing to grant any measure under section 9; • (c) setting aside or refusing to set aside an arbitral award under section • 34.] (2) An appeal shall also lie to a Court from an order of the arbitral tribunal- • (a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or • (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.”
- 11. A.M. Khanwilkar J., Union Of India vs M/S. Simplex Infrastructures Ltd on 13 April, 2017 • On a bare reading of S.36 of the AC Act 1996, it is noticed that remedy of appeal has been provided only against an order of setting aside or refusing to set aside an arbitral award under Section 34(1) (c). No appeal is provided against an order passed by the Court of competent jurisdiction condoning the delay in filing the petition under Section 34 of the Act as such. • The Division Bench in the impugned Judgment, therefore, rightly noted that remedy of appeal against the impugned order of the learned Single Judge was not otherwise available under Section 37 of the Act.
- 12. Fuerst Day Lawson Limited • The Supreme Court in Fuerst Day Lawson Limited the Judgment of the learned Single Judge dated 27th April, 2016, was passed on an application purported to be under S. 34(3) of the Act, for condoning delay in filing of the petition for setting aside the arbitral award. Hence, the remedy of Letters Patent Appeal against that decision is unavailable. The question as to whether the learned Single Judge had rightly exercised the discretion or otherwise, could be assailed by the Respondent before this Court by way of special leave petition. But, certainly not by way of a Letters Patent Appeal under clause 15. For, even if the learned Single Judge may have committed manifest error or wrongly decided the application for condonation of delay, that judgment is ascribable to exercise of jurisdiction under Section 34(3) of the Act. In other words, whether the prayer for condonation of delay can be accepted or whether the application deserves to be rejected, is a matter well within the jurisdiction of that court.
- 13. Fuerst Day Lawson Limited • The Supreme Court in Fuerst Day Lawson Limited the Judgment of the learned Single Judge dated 27th April, 2016, was passed on an application purported to be under S. 34(3) of the Act, for condoning delay in filing of the petition for setting aside the arbitral award. Hence, the remedy of Letters Patent Appeal against that decision is unavailable. The question as to whether the learned Single Judge had rightly exercised the discretion or otherwise, could be assailed by the Respondent before this Court by way of special leave petition. But, certainly not by way of a Letters Patent Appeal under clause 15. For, even if the learned Single Judge may have committed manifest error or wrongly decided the application for condonation of delay, that judgment is ascribable to exercise of jurisdiction under Section 34(3) of the Act. In other words, whether the prayer for condonation of delay can be accepted or whether the application deserves to be rejected, is a matter well within the jurisdiction of that court.