Point of Law: Sections 18 to 27 deal with conduct of arbitral proceedings before an arbitral tribunal.

JUDGMENT :

SATYEN VAIDYA, J.

1. By way of instant appeal, the appellant has assailed order dated 18.04.2016 passed by learned Single Judge in OMP No. 221 of 2015 in Civil Suit No. 16 of 2015, whereby the application of appellant filed under Section 8 of the Arbitration and Conciliation Act, 1996 (for short “1996 Act”) has been rejected.

2. Brief facts necessary for adjudication of this appeal are that respondents herein have filed a suit for recovery of Rs. 60,00,000/- on account of damages against the appellant herein. The suit was registered as Civil Suit No. 16 of 2015 in this Court. The appellant/defendant filed an application under Section 8 of 1996 Act in Civil Suit No. 16 of 2015 seeking reference of the matter to arbitration, basing its claim on an arbitration clause allegedly existing in an agreement between the parties. Respondents/plaintiffs resisted the application and finally learned Single Judge dismissed the application of appellant/defendant and held the suit to be maintainable.

3. Respondents/plaintiffs at the out set have challenged the maintainability of instant appeal. As per respondents/plaintiffs, order refusing to refer the parties to Arbitration under Section 8 of 1996 Act has been made appealable w.e.f. 23.10.2015, whereas the application under Section 8 of 1996 Act was filed by the appellant/defendant on 10.07.2015, therefore, the court proceedings out of which the instant appeal has arisen, had commenced prior to inclusion of right of appeal. By virtue of Section 26 of Act No. 3 of 2016, the amendments made in 1996 Act have been made applicable prospectively.

4. Learned Senior Counsel representing the appellant/defendant has contested the plea of respondents/plaintiffs by contending that the impugned order was passed by learned Single Judge on 18.04.2016 i.e. after coming into force of Amendment Act No. 3 of 2016. As per his contention, the right to file an appeal had accrued in favour of appellant/defendant on 18.04.2016 i.e. after commencement of Amendment Act No. 3 of 2016 and thus, the appellant/defendant had a right to maintain the instant appeal.

5. We have heard Mr. K.D. Sood, Senior Advocate, for the appellant/defendant and Mr. Mohit Thakur, Advocate, for the respondents/plaintiffs and have also gone through the entire record carefully.

6. It is not in dispute that the appellant/defendant filed an application under Section 8 of 1996 Act in Civil Suit No. 16 of 2015 on 10.07.2015.

7. Before 23.10.2015, there was no provision in 1996 Act under which an appeal could be filed against an order refusing reference of matter to Arbitration, passed under Section 8 of 1996 Act. It was after coming into force of Arbitration and Conciliation Amendment Act 2015 that an order refusing to refer the matter to Arbitration under Section 8 of 1996 Act was made appealable under Section 37 (1)(a) of Act ibid.

8. Section 26 of Amendment Act of 3 of 2016 reads as under:

“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.”

9. On the strength of aforesaid provisions of Amendment Act No. 3 of 2016, the respondents/plaintiffs contend that the right to appeal under Section 37(1)(a) of 1996 Act is not available to the appellant/defendant as the proceedings had commenced on 10.07.2015, when an application under Section 8 of 1996 Act was filed in Civil Suit No. 16 of 2015. Section 26 of Amendment Act No. 3 of 2016 clearly made the amendments incorporated in the principal Act prospective in nature and would apply only to those arbitration and court proceedings, which have commenced after coming into force of Act No. 3 of 2016 w.e.f. 23.10.2015.

10. Learned counsel for the respondents/plaintiffs to support his arguments has placed reliance upon a