Enforcement of an Arbitration award in India is a big task, since the Courts in India does not understand the urgency of a party, which started a proceeding a few years back and after spending huge money and time, not getting the amount due as per the award within a reasonable time. In addition to the problem of the overly burdened Courts, as per the unamended Arbitration & Conciliation Act, 1996, if any party challenges an arbitration award under Section 34 of the act, there was an automatic stay on the enforcement proceedings initiated by the successful party, till the disposal of the challenge by the appropriate court.

Arbitration awards can be challenged by the losing party in a District court and most of the District court judges are not aware of the settled law and hence they keep the challenge pending for years. The award holder did not have any possibility of even securing the award amount. Even though the Amendment Act, 2015 has brought in a great relief to the arbitration community by removing the automatic stay situation but the Act being prospective in nature it came into force only with effect from 23rd October 2015. Because of the above there was situation that the benefit of the amended provision could not be availed by the parties whose arbitration started before the above said date but now there is a changed situation.

In a recent judgment dated 14th June 2016 disposing three cases between BCI and Rendezvous Sports World, BCI and Kochi Cricket Private Limited and Global Asia venture Company Vs Arup Deb & others, the High Court of Bombay in a well-reasoned judgement held that the amended Arbitration & Conciliation Act, 1996 which came into effect on 23rd October 2015 is applicable in the enforcement proceedings of arbitral awards even for the arbitrations started before the above said cutoff date. The above said judgement has literally taken away the automatic stay situation in India, by holding that the amended Section 36 of the Act is in curative nature as per the observations made by the Supreme Court of India in NALCO case and hence applicable to all pending cases. In the NALCO case reported in (2004) 1 SCC 540, Supreme Court of India held as follows:

“However, we do notice that this automatic suspension of the execution of the award, the moment an application challenging the said award is filed under section 34 of the Act, leaving no discretion in the court to put parties on terms, in our opinion defeats the very objective of ADR system to which arbitration belongs. We do find that there is a recommendation made by the concerned Ministry to the Parliament to amend Section 34 with a proposal to empower Civil court to pass suitable interim orders in such cases. We sincerely hope that necessary action would be taken by the authorities concerned at the earliest to bring about the required change in law.”

The Board of Control for Cricket in India (BCCI) lost two arbitration proceedings filed by M/S Rendezvous Sports World (RSW) and Kochi Cricket Pvt. Ltd (KCPL) and the final awards dated 22.06.2015 were pronounced by the arbitrator. Since the point in the third matter is also same, we are not separately explaining the third matter. On 16th September 2015, BCCI challenged both the above said arbitration awards by filing applications under Section 34 of the act. In the meantime, i.e., on 23rd October 2015, the Ordinance 2015 amending the Arbitration & Conciliation Act, 1996 was promulgated by the President of India. Later both the houses of Parliament of India passed the said amendment act and the amended provisions came into effect from 23rd October 2015. The successful parties to the arbitration proceedings filed execution applications seeking to enforce the above said two awards simultaneously when the challenge proceedings were pending before the court. BCCI filed chamber summonses in the High Court of Bombay seeking dismissal of the above said applications for execution of arbitral award because the same are misconceived and not maintainable, since Arbitration & Conciliation (Amendment) Act, came into force only from October 2015 and the said amendment is prospective in nature.

The main contention of BCCI was that the above said amending act of 2015 is prospective in nature and can be applied to the arbitration proceedings or related cases, only if the arbitration had been initiated on or before 23rd October 2015. But the parties which filed the enforcement application contented that the amendment is retrospective in nature and since the 2015 amendment which took away the automatic stay situation is a curative provision and hence it comes into force for all the post arbitration proceedings with immediate effect. The High Court even though held that the amending Act and its provisions are prospective in nature but the amended Section 36 being curative in nature, is applicable to all pending proceedings.