Accrued rights under pre-amendment arbitration law preserved; Section 34 challenge continued to stay award enforcement automatically.

Where arbitral proceedings had commenced before the 2015 amendment and the award was made before 23.10.2015, the amended Sections 34 and 36 did not apply to later Section 34 petitions because retrospective application would affect accrued rights under the unamended regime. The court held that such challenges remain governed by the pre-amendment law, avoiding an artificial split between arbitral and court proceedings. Under the unamended Sections 34 and 36, filing and pendency of a Section 34 petition continued to suspend enforcement of the award until disposal, so a separate stay application was not required.

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Issues: (i) Whether the amendments introduced by the Arbitration and Conciliation (Amendment) Act, 2015 to Sections 34 and 36 apply to petitions under Section 34 filed in respect of arbitral proceedings commenced before 23.10.2015 but where the award was made before that date and the Section 34 petitions were filed thereafter. (ii) Whether, in such cases, filing of a Section 34 petition continues to operate as an automatic stay of enforcement of the award under the unamended law.

Issue (i): Whether the amendments introduced by the Arbitration and Conciliation (Amendment) Act, 2015 to Sections 34 and 36 apply to petitions under Section 34 filed in respect of arbitral proceedings commenced before 23.10.2015 but where the award was made before that date and the Section 34 petitions were filed thereafter.

Analysis: Section 26 of the Amendment Act bifurcates cases by the date on which arbitral proceedings commenced. A narrow reading of the phrase "to the arbitral proceedings" would leave out situations where the arbitration had commenced and the award had already been made before 23.10.2015, though the court challenge was pending or contemplated later. The amended provisions affecting enforceability of awards were held to impinge upon accrued rights arising from proceedings commenced under the unamended regime. The interpretive approach adopted also avoided an anomalous split between court proceedings and arbitral proceedings under related provisions such as Sections 9 and 17.

Conclusion: The amended provisions did not apply to the present petitions under Section 34; the petitions were governed by the unamended law.

Issue (ii): Whether, in such cases, filing of a Section 34 petition continues to operate as an automatic stay of enforcement of the award under the unamended law.

Analysis: Under the unamended Section 36, once a Section 34 challenge was filed, the award was not enforceable until the challenge was refused or otherwise ceased to operate. The amendment substituted that regime with one requiring a separate stay application, but that change could not affect proceedings governed by the earlier law because the right to have the award dealt with under the old enforcement regime was an accrued right. The filing and pendency of the Section 34 petitions therefore preserved the earlier consequence.

Conclusion: Filing of the Section 34 petitions operated as an automatic stay of enforcement of the award under the unamended Sections 34 and 36.

Final Conclusion: The condition requiring deposit of Rs. 2.70 crores was set aside, and the Section 34 petitions were to proceed under the unamended arbitration regime with automatic stay of enforcement until their disposal.

Ratio Decidendi: Where arbitral proceedings commenced before the commencement of the 2015 amendment and the amendment would affect accrued rights regarding enforceability of the award, the amended provisions do not apply retrospectively; the unamended enforcement regime continues to govern the pending challenge.

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