Transitional arbitration law: pre-1996 reference proceedings remain governed by the 1940 Act, including connected court steps.

For transitional purposes, arbitral proceedings commence when the request for reference is received, and if that commencement predates the Arbitration and Conciliation Act, 1996, the repealed Arbitration Act, 1940 continues to govern all proceedings relating to that arbitration. The expression "in relation to arbitral proceedings" was treated broadly to include court proceedings connected with the arbitral process, not only steps before the arbitrator. The 1996 Act therefore did not govern the application for removal and substitution of the arbitrator, and the challenge based on lack of jurisdiction under the new Act failed.

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Issues: Whether the application for removal and substitution of the arbitrator was governed by the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996, and whether the High Court lacked jurisdiction because the new Act had come into force.

Analysis: The reference to arbitration and appointment of the first arbitrator had taken place in 1994, before the commencement of the 1996 Act. Section 21 of the 1996 Act treats arbitral proceedings as commencing on receipt of the request for reference, and section 85(2)(a) preserves the operation of the repealed 1940 Act for proceedings commenced before the new Act came into force. The expression "in relation to arbitral proceedings" was held to cover not merely proceedings before the arbitrator but also proceedings in court taken under the 1940 Act in connection with the arbitral process. The rule regarding entry on reference under the First Schedule was treated as serving a different purpose and did not control the meaning of commencement for transitional purposes.

Conclusion: The proceedings were governed by the Arbitration Act, 1940, and the challenge based on the 1996 Act failed.

Final Conclusion: The appeals were rejected and the order appointing a substitute arbitrator was allowed to stand, with directions for the arbitral award to be made within the stipulated time.

Ratio Decidendi: For transitional purposes, arbitral proceedings commence when the request for reference is received, and where such commencement predates the 1996 Act, the repealed 1940 Act continues to govern all proceedings relating to that arbitration.

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