This week, we examine the decision of the Bombay High Court in Chetan R. Shah. v. Emkay Fincap Ltd., which interprets the recently introduced section 87 of the Arbitration and Conciliation Act 1996 (Act). The Arbitration and Conciliation (Amendment) Act, 2019 (2019 Amendment Act) introduced section 87 in the Act which inter alia provides that- unless the parties otherwise agree, the Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment Act) shall not apply to (i) arbitral proceedings commenced before the commencement of the 2015 Amendment Act; (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 2015 Amendment Act.In the present case, the arbitration proceedings were commenced prior to the coming into force of the 2015 Amendment Act i.e. 23 October 2015, and the Award (Award) was also made prior to 23 October 2015. In an application seeking stay on the operation of the Award, the question which arose before the Bombay High Court (Court) was – when the arbitration agreement provides that the Act along with statutory modifications shall be applicable, then is section 36 of the Act as amended by the 2015 Amendment Act applicable or is section 36 as it originally stood applicable given that the arbitration proceedings were initiated prior to the commencement of the 2015 Amendment Act?
The Court inter alia concluded that since the parties had agreed to the applicability of the Act along with statutory modifications or re-enactments thereof, the 2015 Amendment Act was applicable and the applicant was not entitled to an automatic stay of the Award. Read the detailed update here.
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