Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd.

Facts

After the 2015 Amendment substituted Section 36 to remove the automatic stay of an award upon the mere filing of a Section 34 set-aside petition, a controversy arose over whether the amended provision applied to arbitrations or court proceedings that had begun before 23 October 2015. The Bombay and Madras High Courts had held the amendment applied to pending Section 34 challenges, while the Delhi High Court took the contrary view. The conflict reached the Supreme Court in proceedings concerning the enforceability of awards pending challenge.

Issues

• Whether the amended Section 36, removing the automatic stay on enforcement, applies retrospectively to court proceedings filed before the 2015 Amendment came into force.
• How Section 26 of the 2015 Amendment Act distributes the amendments between arbitral proceedings and court proceedings.

Arguments

Award holders argued the enforcement regime was procedural, that the old automatic stay was a mischief the amendment cured, and the amended Section 36 should govern all pending and fresh court proceedings. Award debtors argued the amendment could not be applied to proceedings arising out of pre-amendment arbitrations as it would impair accrued rights.

Held

The Court held that Section 26 of the 2015 Amendment Act bifurcates its operation: the substantive amendments do not apply to arbitral proceedings commenced before 23 October 2015 unless parties agree, but they do apply to court proceedings commenced on or after that date. Accordingly the amended Section 36 governs all Section 34 and enforcement proceedings filed after 23 October 2015, regardless of when the arbitration commenced. The Court emphasised that there is no vested right in an automatic stay of an award; it is a procedural matter and the old position frustrated the Act's object of speedy enforcement. It directed that the amended Section 36 apply to such court proceedings.

Ratio decidendi

The mere filing of a Section 34 application does not by itself stay enforcement of an award; a separate stay application and a reasoned stay order are required. The amended Section 36 applies to court proceedings (including execution and Section 34) commenced on or after 23 October 2015, as there is no vested right in an automatic stay.

Significance

Landmark on enforcement: it ended the regime under which every award was frozen by the simple act of filing a challenge, dramatically improving enforceability of Indian awards. Parliament sought to undo its effect by enacting Section 87 (2019 Amendment) reviving the old position for pre-2015 matters; that provision was struck down in Hindustan Construction Co. v. Union of India (2019), which reaffirmed Kochi Cricket.

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