Un-amended (Indian) Arbitration Act would continue to apply to challenge and enforcement proceedings
concerning awards delivered in arbitrations commenced prior to the amendment. The party challenging
such an arbitral award is therefore entitled to an automatic stay on its enforcement without deposit of any
money in the court, in keeping with the position prior to the amendment.

I. Introduction
The Delhi High Court (“DHC”), has on January 6, 2017 delivered a significant judgment Ardee Infrastructure Private
Limited vs. Ms. Anuradha Bhatia/Yashpal & Sons (“Judgment”) holding that a challenge to the enforcement of an
arbitral award in cases where arbitration proceedings commenced prior to October 23, 2015 would be governed
by the un-amended Arbitration and Conciliation Act, 1996 (“Un-amended Act”).
Resultantly, the parties seeking to challenge arbitral awards in cases where the respective arbitrations commenced
prior to October 23, 2015, now:
A. Are entitled to an automatic stay on the execution of the arbitral award once the challenge to the same is
filed/admitted. Such a provision for an automatic stay has been specifically done away within the amended
Arbitration and Conciliation Act, 1996 (“Amended Act”).
B. Are not required to deposit the awarded amount in the court, which would have otherwise been required if
the Amended Act applied and the party initiating a challenge to an arbitral award for money sought a stay
on the operation/enforcement of such arbitral award pending the challenge.

II. Background
The Arbitration and Conciliation Act, 1996 was amended on January 1, 2016 with retrospective effect from October
23, 2015. Section 26 of the Amended Act states that:
“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.”

Under the Un-amended Act, the filing and pendency of a challenge to an arbitral award, in effect, operated as an
automatic stay on enforcement of the arbitral award.

The Amended Act changed this legal position to in effect specify, that the mere filing and admission of a challenge
to an award would not operate as an automatic stay on the enforcement of the arbitral award. To seek a stay on
the operation/enforcement of the arbitral award under the Amended Act, the party challenging the arbitral award
must now file a separate application seeking stay of the operation/enforcement of the arbitral award which may be
granted by the court as it may deem fit subject to the conditions for granting the same being recorded in writing.

The Amended Act further specifies that while considering grant of stay in case of an arbitral award for payment of
money, courts shall have due regard to the provisions of the Code of Civil Procedure, 1908 relating to grant of stay
of a money decree. The provisions prescribe the deposit of money in the court/creation of security by the party
seeking the stay corresponding to the decretal amount.

In the case before the DHC:
– The arbitral award was delivered on October 13, 2015;
– The Amended Act came into effect from October 23, 2015 onwards;
– The challenge to the arbitral award was filed before the DHC on January 4, 2016;
– On May 31, 2016, the single judge bench of the DHC directed the appellants to deposit INR 27 million
(approximately USD 393,000) else the challenge against the arbitral award would stand dismissed;
– Appeal against the above direction of deposit of money was filed before the division (two judge) bench of
the DHC, which resulted in the Judgment, which set aside the single judge order to the extent that it
required a deposit from the appellants.

III. The Verdict:
In its 30 page judgment, the DHC considered various provisions of the law, arguments and counter-arguments,
and finally concluded that to give a harmonious interpretation to Section 26, and to the respective applicability of
the Amended and Un-amended Acts, the challenge to the arbitral award in the present case would be governed
by the Un-amended Act (i.e. the appellant would not be required to deposit money for seeking stay of the operation
and enforceability of the arbitral award). The DHC recorded that the right to an automatic stay upon filing of a challenge was an accrued/vested right of the parties, and as such cannot be taken away retrospectively unless a
different intention to that effect appears in the amending law. The DHC further observed that the intention of the
legislature while amending the Un-amended Act was not to take away such accrued/vested rights of the parties.

The effect of the DHC’s decision is that in all cases where arbitration proceedings have commenced prior to
October 23, 2015, the resulting challenge to the arbitral award’s operation and enforcement would be governed by
the Un-amended Act, irrespective of the date of the arbitral award in such proceedings or the date of filing a
challenge to the enforcement of the same. For those arbitral proceedings which commence on or after October 23,
2015, the Amended Act would apply to the entire arbitration proceedings.

While the Judgment endeavours to give a harmonious interpretation, attempting to anticipate legislative intent, it
appears to be in conflict with judgments delivered by other High Courts of India on the similar question of the
applicability of the Amended Act, including the Kolkata High Court (in the case of Tufan Chatterjee vs. Rangan
Dhar, specifically disagreed to by the DHC in the Judgment) and the Mumbai High Court [BCCI vs. M/s Rendezvous
Sports World and BCCI vs. Kochi Cricket Private Ltd. (not discussed in the DHC judgment)].

The judicial disagreements lead to an interesting situation where the challenge to the enforcement of arbitral
awards in different states of India would for the time being be governed by the Amended or Un-amended Act,
depending on the decisions of their respective High Court (whose decisions have a binding effect within the state)
or the inclination of such High Court to follow any of the two interpretations by the other High Courts.

The differences are likely to prevail till such time the Supreme Court of India conclusively clarifies the position. The
Supreme Court is, in any case, considering the question in certain appeals emanating from High Court judgments
on the issue.