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Issues: Whether the Arbitration and Conciliation Act, 1996 overrides the Sick Industrial Companies (Special Provisions) Act, 1985 in relation to an arbitral award concerning a sick industrial company; and whether the Board for Industrial and Financial Reconstruction could suspend or control the operation of such an award during pending proceedings under the special statute.
Analysis: The 1996 Act is a complete code on arbitration, but its non obstante clause in Section 5 is confined to the field of judicial intervention contemplated by that Act. The special statute for sick industrial companies creates a distinct regime aimed at revival and rehabilitation, and Sections 22(1) and 22(3) operate in different spheres. Section 22(1) automatically suspends certain proceedings when the statutory conditions exist, while Section 22(3) empowers the Board to pass a specific order suspending the operation of contracts, settlements, awards and allied obligations for implementation of the scheme. An arbitral award, though enforceable as a decree under Section 36 of the 1996 Act, remains capable of being dealt with under the special statute until it is actually enforced, and the Board is a judicial authority for the purpose of Section 5. The proper approach is to harmonise both enactments and give effect to the protective policy of the special statute, subject to statutory limits and judicial discipline.
Conclusion: The special statute was held applicable, and the contention that the arbitration law completely excluded the Board's jurisdiction was rejected. An arbitral award could be kept in abeyance in the statutory context of sick-company proceedings, subject to the limits of the special enactment.
Final Conclusion: The appeal was not entertained on merits at that stage because the dispute had become academic after the sale of the shares and deposit of the proceeds, but the Court clarified the governing principles for future cases involving the interaction between arbitration enforcement and sick-industrial-company proceedings.
Ratio Decidendi: Where a special revival statute and the Arbitration and Conciliation Act, 1996 operate simultaneously, the non obstante clause in Section 5 of the Arbitration and Conciliation Act, 1996 does not override the statutory powers conferred on the Board under the sick-company legislation, and an arbitral award may be subjected to the specific suspension machinery provided by that special law.
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