Amendment In Arbitration Act Will Not Lead To Reconstituting The Pre-existing Tribunals: Delhi HC [Read Judgment]

Delhi High Court has held that there's no need to reconstitute Arbitral Tribunals existing since prior to 2015 just because the Amendment Act was brought in the same year. the court said the existing arbitral tribunal would continue to operate as per the Act in which they were constituted.

In the present case, the Petitioners had asked the court to issue directions to the Respondents to constitute a new arbitral tribunal and conduct the arbitration as per the Arbitration and Conciliation Amendment Act of 2015. The Petitioner had cited an Office Memorandum issued by the NITI Aayog on 05.09.2016 to ask a reconstitution of the Arbitral Tribunal in accordance with the Amendment Act.

The issue before the court was whether the OM issued by NITI Aayog mandates reconstitution of the arbitral tribunals in respect of arbitrations that had commenced prior to the Amendment Act coming into force.

The relevant clause of the aforementioned OM reads as:

'In case of contracts/concessions where the process of arbitration was initiated under the pre-amended Arbitration Act, the PSUs/Department may seek the consent of the contractors/concessionaires to transfer the pending cases under the amended Arbitration Act, wherever possible. The shift to amended Arbitration Act is expected to make the arbitration process more cost effective and help in settlement of disputes in a timely manner.'

Rejecting to grant relief to the Petitioner, Justice Vibhu Bakhru opined that the words "wherever possible" clearly indicates that the provisions of the Act as amended by the Amendment Act would be implemented only where the same is feasible. The said clause cannot be read to mean that the arbitral tribunals constituted prior to issuance of the OM are required to be reconstituted.

The court also noted that Section 26 of the Amendment Act makes it amply clear that the Amendment Act would not be applicable to arbitration proceedings that had commenced prior to the Amendment Act coming into force (which came into force on 23.10.2015).

[Read Judgment]