M/S BKFC AND CO. v. M/S TRANSPARENT ENERGY SYSTEM PVT. LTD.

2. The Respondent, in its reply raises several objections, and particularly objects to the maintainability of the petition. It is contended that the petition is wholly unnecessary and misconceived; Section 29A is only applicable prospectively to the arbitration proceedings which commenced on or after 23rd October 2015. The constitution of the present arbitral tribunal as well as the commencement of the arbitration proceedings happened well before the SANJEEV NARULA, J. (Oral):

1. The present petition under Section 29A(4) and (5) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as ‘the Act’] seeks an order of extension of the mandate of the Arbitral Tribunal by a period of six months, for passing the arbitral award. 2021:DHC:3044 aforementioned date. The parties have not expressly agreed to the amended provisions.

3. The Petitioner, on the other hand, insists that the present petition is maintainable and the amended Section 29A is applicable. On the strength of the expression - “This submission shall be deemed to be submissions to Arbitration within the meaning of the Indian Arbitration Act 1940 or any statutory modification thereof” - contained in the arbitration clause, it is argued that the parties have agreed to apply the statutory amendments to the Arbitration and Conciliation Act, 1996, and no fresh express agreement is necessary. Reliance is placed upon the judgment of this Court in Ratna Infrastructure Projects Private Limited v. Meja Urja Nigam Private Limited.[1]

5. Subsequent to judgment relied upon by the Petitioner, there is an authoritative decision of the Supreme Court, in S. P. Singla Constructions Private Limited v. State of H.P.,

4. The Court has heard the counsel for the parties. Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015, provides as follows: “26. Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act.” which deals with the proposition in law advanced by the Petitioner.In the said judgment, the Supreme Court also had the occasion to consider the decision in Ratna Infrastructure (supra). The Court, however did not comment on the correctness of the judgment inRatna Infrastructure (supra), yet decided the legal question by holding that the expression - “Subject as aforesaid the provision of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being shall apply to the arbitration proceeding under this clause” - contained in an arbitration clause, is not indicative of an agreement between the parties to apply the provisions of the Amended Act.

6. The factual situation in the present case is somewhat similar to one that arose in the case of S. P. Singla (supra). The relevant portion of the arbitration agreement contained in clause 7.23 of the Tender document relied upon by the Petitioner to contend that there is an agreement, as contemplated under Section 26 of the Amendment Act of 2015, reads as under: “Upon every or any such reference in the cost of and incidental to the reference in the award respectively shall be in the direction of the Arbitration, or Arbitrators or the Umpire who may determine the amount thereof, or direct the same to be texted as between attorneys and client or between attorney and client or such between party and party, and shall direct by whom and to whom and in what manner the same shall be borne and paid. This submission shall be deemed to be submissions to statutory modification thereof. The award of the Arbitrator, Arbitration Act 1940 or any statutory modification thereof.” In S. P. Singla (supra), the proviso read as under: “Subject as aforesaid the provision of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being shall apply to the arbitration proceeding under this clause.” The Supreme Court, inter alia, held that: “ ……… as suffice it to note that as per Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 the provisions of the Amended Act, 2015 shall not apply to the arbitral proceedings commenced in accordance with the provisions of Section 21 of the Principal Act before the commencement of the Amendment Act unless the parties otherwise agree. In the facts and circumstances of the present case, the proviso in clause (65) of the general conditions of the contract cannot be taken to be the agreement between the parties so as to apply the provisions of the amended Act. As per Section 26 of the Act, the provisions of the Amendment Act, 2015 shall apply in relation to arbitral proceedings commenced on or after the date of commencement of the Amendment Act, 2015 (w.e.f. 23.10.2015). In the present case, arbitration proceedings commenced way back in 2013, much prior to coming into force of the amended Act and therefore, provisions of the Amended Act cannot be invoked.”

7. In fact, a Co-ordinate Bench of this Court in ABBIndia Limited v. BHEL,[3]

57. No doubt, in S. P. Singla Constructions Pvt. Ltd, the Supreme Court observed, towards the commencement of para 16 of the report, that it was not inclined to go into the merits of the contentions, of SPSCL, relying the applicability of the earlier decisions of this Court in Ratna Infrastructure Projects Pvt Ltd, or to examine the correctness of the said decision. Had the Supreme Court not chosen to enter any further observations or findings, the matter might have been different. As it is, however, the Supreme Court proceeded, in the same paragraph, to hold that the proviso to Clause 65 of the GCC in that case, could not be taken as an agreement between the parties, so as to make Section 12(5) of the 1996 Act, applicable.

58. What is said by the Supreme Court constitutes declaration of the law under Article 141 of the Constitution of India, and not what is unsaid. It is the exposition of the law, by the Supreme Court, which binds.

59. The discipline of Article 141 does not permit me, therefore, to ignore the declaration of the law, contained in para 16 of S.P. Singla Constructions Pvt Ltd, merely because of the cautionary opening sentences in the said paragraph. The Supreme Court, in the said paragraph, categorically held that "the proviso in clause 65 of the General Conditions of Contract cannot be taken to be the agreement between the parties so as to apply the provisions of the Amended Act". Additionally, the Supreme Court has observed, in the very same paragraph, that the applicability of Section 12(5) of the 1996 Act also stood ruled out by Section 26 of the 2015 Amendment Act, as the arbitral proceedings, had commenced in 2013, i.e., much prior to 23rd October,

2015. The Supreme Court having, in Parmar Construction Company, found the decision in S.P. Singla Constructions Pvt Ltd to constitute a valuable precedent, the reliance, by the respondent, on the said decision, must be taken to be justified.

60. In any event, as already noted hereinabove, the present case is, in any event, covered by Parmar Construction Company.

61. Ms. Lal sought to distinguish the decision in Parmar Construction Company on the ground that the arbitration clause in that case did not contain the words "and for the time being in force".