Accrued arbitration rights preserve the old appellate regime for proceedings begun before the 1996 Act

Appeals arising from arbitral proceedings commenced before the Arbitration and Conciliation Act, 1996 continued to be governed by the Arbitration Act, 1940. The SC treated Section 85(2)(a) as preserving the repealed Act for proceedings begun under it, unless the parties otherwise agreed, and held that "in relation to arbitral proceedings" extends to court proceedings, enforcement of the award, and related appeals. A clause referring to existing law or statutory re-enactment did not shift the appellate regime to the 1996 Act after commencement under the 1940 Act. The right to enforce the award and the corresponding right to challenge it under the old Act was treated as an accrued right.

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Issues: Whether appeals arising from arbitral proceedings commenced before the Arbitration and Conciliation Act, 1996 came into force are governed by the Arbitration Act, 1940 or by the Arbitration and Conciliation Act, 1996.

Analysis: Section 85(2)(a) of the Arbitration and Conciliation Act, 1996 saves the operation of the repealed Act in relation to arbitral proceedings commenced before the new Act, unless the parties otherwise agree. The expression "in relation to arbitral proceedings" was held to extend beyond proceedings before the arbitrator and to include proceedings before the court, enforcement of the award, and appeals arising therefrom. The arbitration clause permitting the then existing law, or any statutory modification or re-enactment, to apply did not authorize a shift from the old statutory appellate regime to the new one after the proceedings had already commenced under the old Act. The right to have the award enforced, and the corresponding right to challenge it under the old Act, was treated as an accrued right.

Conclusion: Appeals arising from arbitral proceedings that had commenced under the Arbitration Act, 1940 remained governed by the Arbitration Act, 1940, and the contention that the Arbitration and Conciliation Act, 1996 applied to those appeals was rejected.

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