Vesuvius India Limited vs Lindsay International Private Limited

Soumen Sen, J

The Court : This is an application for recalling of the order dated 9th August, 2019 by which an arbitrator was appointed in an application filed under Section 11 of the Arbitration and Conciliation Act, 1996.

The basis of the present application appears to be a gazette notification of the Arbitration and Conciliation (Amendment) Act, 2019 by which, amongst others, Section 11(6A) was omitted.

The learned Counsel appearing on behalf of the petitioner submits that the order was passed on 9th August, 2019 when the said Act was published in the Gazette of India and, accordingly, it was incumbent upon the Court to consider the said omission.

Mr. Anindya Kumar Mitra, learned Senior Counsel appearing for the respondent opposing the application, has drawn my attention to Section 13 of the Arbitration and Conciliation (Amendment) Act, 2019 and submits that the amendment would not affect the appointment already made in view of Section 87(b) of the new Act. The said Section reads as follows:

After section 86 of the principal Act, the following section shall be inserted and shall be deemed to have been inserted with effect from the 23rd October, 2015, namely-

"87. Unless the parties otherwise agree, the amendments made to this Act by the Arbitration and Conciliation (Amendment) Act, 2015 shall-

(a) not apply to-

(i) arbitral proceedings commenced before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015;

(ii) Court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015;

(b) apply only to arbitral proceedings commenced on or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and to court proceedings arising out of or in relation to such arbitral proceedings."

Mr. Mitra submits that in view of the fact that in the instant case, the arbitration proceedings has commenced on 21st March, 2017, when Vesuvius India Limited issued the notice under Section 21 of the Arbitration and Conciliation Act, 1996, Section 11 as amended by the Amendment Act of 2019 Act would not apply. Mr. Mitra has also submitted that the application for appointment of arbitrator was made on 20th June, 2017, i.e. prior to coming into force of the present Act. It is thus submitted that the amendment to Section 11(6A) would not apply in the instant case.

In view of the admitted position that the arbitration proceedings had commenced after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and that court proceedings have also started after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015, the provisions of Arbitration and Conciliation (Amendment) Act, 2019, inter alia, for appointment of an arbitrator, shall not apply. Section 11(6A) of the 1996 Act is a substantive right and any amendment to such provision can only be prospective unless the statute makes it retrospective. Whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act, will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject, the provisions of the new Act would undoubtedly be looked at, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them (See BCCI v. Kochi Cricket Pvt Ltd reported at (2018) 6 SCC 287, para 43).

Section 13 of the Arbitration and Conciliation (Amendment) Act, 2019 inserted a new Section 87 after Section 86 of the principal Act. Section 87 is the repeal and savings clause. Further, section 15 of the Amendment Act, 2019 causes omission of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 with effect from 23rd October, 2015. Section 87(b) saves the arbitration proceedings commenced on or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and Court proceedings arising out of or in relation to such arbitral proceedings. The provisions of the Arbitration and Conciliation (Amendment) Act, 2015 shall apply in relation to arbitral proceedings which have commenced before the coming into effect of the new Amendment Act of 2019. The new Amendment Act of 2019 would be applicable in relation to arbitral proceedings which commenced on or after the new Amendment Act comes into force. The Amendment Act, as applicable to Court proceedings that arose in relation to arbitral proceedings, cannot be said to apply to mere forms of procedure but also includes substantive law applicable to such court proceedings post the Amendment Act, 2019. Commencement in Section 87(b) is as it is understood in Section 21 of the 1996 Act. Once the arbitral proceedings have commenced, it cannot be said that the right accrued under the 2015 Act are now to be governed by the amendments introduced by the Amendment Act of 2019. It was certainly an accrued right saved under the newly inserted Section 87(b) by the Amendment Act of 2019 read with Section 15 of the Amendment Act, 2019.

On such consideration this application fails. However, there shall be no order as to costs.

Since no affidavit-in-opposition is called for, the allegations made in the petition are deemed to have been denied.