Arbitration Act: Notice Date Determines Applicability|

The court clarified that the Arbitration & Conciliation (Amendment) Act, 2015 applies based on the date of notice invoking arbitration, not the filing date of the petition. It held that Section 34(5) is procedural and directory, allowing post-petition notice issuance. Non-compliance with Section 34(5) and 34(6) does not invalidate the petition, emphasizing expediency without penal consequences. The court safeguarded the right to challenge arbitral awards under Section 34, ensuring procedural rules do not impede substantive rights, directing cases on notice requirements for admission.

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Issues Involved:
1. Applicability of the Arbitration & Conciliation (Amendment) Act, 2015 to arbitral proceedings commenced prior to its enactment.
2. Whether the requirement of prior notice under section 34(5) of the Amendment Act is mandatory or directory.
3. Consequences of non-compliance with section 34(5) and 34(6) of the Amendment Act.

Detailed Analysis:

Issue 1: Applicability of the Amendment Act
The court examined whether the provisions of the Arbitration & Conciliation (Amendment) Act, 2015 apply to arbitral proceedings commenced before its enactment (23rd October 2015). The court concluded that:
- If the notice invoking arbitration was issued before 23rd October 2015, the pre-amendment provisions of the Arbitration & Conciliation Act, 1996 would apply.
- If the notice was issued after 23rd October 2015, the amended provisions would apply.
- The date of filing the arbitration petition under section 34 is irrelevant for determining the applicability of the amended provisions.

Issue 2: Mandatory or Directory Nature of Section 34(5)
The court deliberated whether the requirement of issuing a prior notice under section 34(5) before filing an arbitration petition is mandatory. The court held that:
- Section 34(5) is procedural and not substantive.
- The provision is directory, not mandatory, as no specific consequences are provided for non-compliance.
- The court can direct the petitioner to issue the notice after filing the petition but before the hearing.

Issue 3: Consequences of Non-Compliance
The court considered the consequences of not complying with sections 34(5) and 34(6). It was concluded that:
- No specific consequences are outlined in the Amendment Act for non-compliance with these sections.
- The procedural requirements aim to expedite the process and avoid delays but do not penalize non-compliance by invalidating the petition.
- The court retains the discretion to ensure compliance with procedural requirements without dismissing the petition outright.

Conclusion:
- The court emphasized that the vested right to challenge an arbitral award under section 34 cannot be taken away by procedural amendments.
- The court directed that all arbitration petitions where the issue of the mandatory or directory nature of section 34(5) and 34(6) arises should be placed on board for admission.

The judgment provides clarity on the applicability of the Amendment Act and the procedural requirements under section 34, ensuring that substantive rights are not unduly affected by procedural technicalities.

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