Arbitration stay regime: pre-amendment law applied to the award, so no security was required and delay was condoned.

Section 26 of the 2015 Amendment Act kept the pre-amendment Arbitration and Conciliation Act, 1996 regime applicable to arbitral proceedings commenced before the amendment, unless the parties agreed otherwise. As the award arose from such proceedings, the amended security requirement for stay did not apply, and the award debtor could not be compelled to furnish security under the post-amendment framework. The delay in filing the set-aside application was also condoned because it was filed within the further limitation period and sufficient cause was shown. The application to set aside the award was therefore admitted and was to proceed on the merits under the pre-amendment regime.

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Issues: (i) Whether the amended regime requiring security for stay of an arbitral award applied to arbitration proceedings commenced before the Arbitration and Conciliation (Amendment) Act, 2015 came into force. (ii) Whether the delay in filing the application to set aside the award should be condoned.

Issue (i): Whether the amended regime requiring security for stay of an arbitral award applied to arbitration proceedings commenced before the Arbitration and Conciliation (Amendment) Act, 2015 came into force.

Analysis: The repeal and savings provision in Section 26 of the Amendment Act made the amended provisions inapplicable to arbitral proceedings commenced before the commencement of the Amendment Act, unless the parties agreed otherwise. The award in question arose from proceedings commenced before the amendment, so the pre-amendment Section 36 of the Arbitration and Conciliation Act, 1996 governed the matter. Under the unamended law, enforcement was stayed upon the filing of a setting aside application within limitation, and the Code of Civil Procedure did not supply any basis for directing the award debtor to furnish security in such circumstances.

Conclusion: The amended security requirement did not apply, and the petitioner could not be compelled to furnish security.

Issue (ii): Whether the delay in filing the application to set aside the award should be condoned.

Analysis: The application was filed after expiry of the initial period but within the further period available under the governing limitation framework, and sufficient cause was shown for the delay.

Conclusion: The delay was condoned.

Final Conclusion: The application to set aside the award was admitted under the pre-amendment arbitration regime, without any requirement of security, and the matter was directed to proceed on the merits.

Ratio Decidendi: Section 26 of the 2015 Amendment Act prevents the amended enforcement-and-stay regime from applying to arbitral proceedings commenced before its commencement, so the pre-amendment law governs such proceedings and does not authorise a security condition for stay upon filing a set-aside application.

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