Limited Vs. M/S GMC Ice Cream (P) Ltd  Insc 230 (5 April 2004)
APPEAL Nos. 9673-9674 OF 2003 KAPADIA, J.
question for consideration in the present appeals is as to whether the
Arbitration Act, 1940 (hereinafter referred to as "the 1940 Act")
would apply in the facts and circumstances of the case or whether the case will
have to be dealt with under the Arbitration & Conciliation Act, 1996
(hereinafter referred to as "the 1996 Act")? Briefly, the facts of
the case are as follows. The parties hereto entered into an agreement on
7.4.1992 in terms whereof the first respondent herein was to manufacture and
pack in its factory a wide range of ice cream for and on behalf of the
appellant. The agreement was to remain valid for five years.
the contract contained an arbitration agreement being clause 20 thereof which
is as under: "In the case of any dispute or any difference arising at any
time between the Company and the Manufacturer as to the construction, meaning
or effect of this Agreement or any clause or thing contained therein or the
rights and liabilities of the Company or the Manufacturer hereunder in relation
to the premises, shall be referred to a single arbitrator, in case the parties
can agree upon one, and failing such Agreement, to two arbitrators one to be
appointed by either party and in case of disagreement between the two
arbitrators aforesaid and in so far as and to the extent that they disagree to,
an umpire to be appointed by the said two arbitrators before they enter upon
such arbitration proceedings shall be in accordance with and subject to the
provisions of the Arbitration Act, 1940, or any statutory modification or
reenactment." On the strength of this agreement dated 7.4.1992, the
respondent herein filed title suit No.40 of 1995 on 20.5.1995 for an injunction
restraining the appellant herein from disturbing manufacture and supply of ice
cream. In the said suit, the appellant applied for stay of suit vide application
dated 17.7.1995 under section 34 of the 1940 Act. By order dated 3.8.1995, the
trial Court stayed the suit. Being aggrieved, the respondent herein filed an
application before Additional District Judge, Gaya, which was dismissed on 13.3.1996. Aggrieved, the
respondent herein carried the matter in revision to the High Court which was
disposed of on 6.5.1997 in terms of the following order: "Before this
court parties have agreed that the dispute between them may be referred as per
the agreement to arbitrators chosen by the parties. The plaintiff has chosen Shri
Uday Sinha, a retired judge of this court and Senior Advocate of the Supreme
Court, while the defence have chosen Shri Hari Lal Agarwal, Senior Advocate of
the Supreme Court, a former judge of this court and Chief Justice of Orissa
High Court as arbitrators.
dispute between the parties is referred to arbitrators.
that the learned Arbitrators will dispose of the arbitration proceedings within
three months of the entering the reference." The above order is a consent
order by which application for stay of the suit stood disposed of. Pursuant to
the consent order, the arbitrators nominated by the respective parties in turn
appointed an umpire. On 19.8.1997, the parties were asked to appear. The respondent
was called upon to file statement of claim. An issue arose for determination at
that stage as to which of the two Acts applied to the arbitration. On behalf of
the appellant, it was submitted that application under section 34 of the 1940
Act constituted a request to refer the matter to the arbitration and
consequently the request marked the commencement of the arbitration
proceedings. This argument was rejected by the arbitrators on the ground that a
proceeding under section 34 of the 1940 Act was essentially a defence to the
suit and it did not amount to referring a claim to arbitration.
further held that the arbitration commenced in the present case when the claim
was referred to the arbitrators on 6.5.1997.
this connection, reliance was placed on the provisions of section 85(2)(a) of
the 1996 Act. It was further held that the order dated 6.5.1997 was a consent
order and consequently, the arbitration proceedings commenced only after the
said order which was passed after the new Act came into force. At this stage,
it may be pointed out that in the course of hearing before the arbitrators and
before the decision could be given on the above question, the appellant herein
filed an application before the arbitrators dated 7.3.1998 enclosing notice
dated 14.9.1995 served by the appellant on the respondent herein whereby the
appellant had appointed Mr. H.L. Aggarwal as their arbitrator and by which
notice the respondent herein was called upon to appoint their own arbitrator in
terms of clause 20 quoted above.
application dated 7.3.1998, the appellant submitted that in view of the above
notice dated 14.9.1995, the arbitration proceedings had commenced under the
1940 Act. By majority decision, the arbitrators took the view that the said notice
dated 14.9.1995 did not make any difference to the question of commencement of
the arbitral proceedings in view of the provisions of section 85(2)(a) of the
1996 Act as there was a clear and explicit agreement between the parties
recorded in the consent order dated 6.5.1997. It was held that in relation to
arbitration proceedings which commenced before the 1996 Act, parties were free
to agree as to when arbitration proceedings are to be regarded as commenced for
the purposes of section 85(2)(a) of the 1996 Act and since there was such an
agreement in the consent order dated 6.5.1997, the arbitration proceedings had
commenced under the 1996 Act. It was further held that by order dated 6.5.1997
passed by the High Court, the arbitration was set in motion by the parties when
they nominated their respective arbitrators and the Court ordered that the
dispute between the parties be referred to the arbitrators and that the
arbitration proceedings be disposed of within three months of entering upon the
reference. It was held that arbitration commenced when there was a completely
constituted arbitration Tribunal to decide the dispute, which on facts took
place only after the 1996 Act commenced. It was further held that the notice
dated 14.9.1995 served by the appellant was a non-starter and that such a
notice did not commence arbitral proceedings in terms of section 85(2) of the
by majority decision, it was held that the consent order dated 6.5.1997 marked
the commencement of the arbitral proceedings and, therefore, the 1996 Act was
the learned arbitrators, Mr. H.L. Aggarwal in his dissenting opinion held that
the arbitration proceedings commenced in the present case when the notice dated
14.9.1995 was issued by the appellant to the respondent. In this connection, he
placed reliance on section 37(3) of the 1940 Act.
the majority decision of the arbitrators, the appellant herein moved an
application under section 33 of the 1940 Act in the High Court. A learned single
Judge of the High Court held that in the present case the disputes were
referred to for arbitration only on 6.5.1997 and, therefore, the parties have
to be governed by the provisions of the 1996 Act. The Letters Patent Appeal
preferred therefrom was also dismissed by a five- Judge Bench of the High Court
as not maintainable.
Salve, learned senior counsel appearing on behalf of the appellant submitted
that having regard to the fact that the notice appointing the arbitrator had
been served by the appellant upon the respondent as far back as 14.9.1995 in
terms whereof the arbitration proceedings commenced, the 1940 Act was
applicable in the instant case. Referring to section 21 and section 85 (2) (a)
of the 1996 Act, it was urged that there are well known expressions in arbitral
proceedings being "commencement of the arbitration proceedings",
"continuance of arbitration proceedings", "entering into
reference", which in different context could carry different meanings. The
Parliament however in the 1996 Act has chosen to use the expression
"commencement of arbitral proceedings", in section 21 the meaning
thereof as is understood in common parlance should be applied. Strong reliance
in this connection was placed on the decision of Queen's Bench Division in
Charles M. Willie & Co. (Shipping) Ltd. v. Ocean Laser Shipping Ltd.
[(1999) 1 Lloyds Law Report 225].
counsel for the appellant further submitted that there was a conflict in the
decision of the two-Judge Benches of this Court as regards the construction of
the arbitration agreement as contained in clause 20 thereof vis-`-vis the
applicability of the 1996 Act. In this connection, my attention was drawn to
the decision of this Court in the case N.S. Nayak & Ors. v. State of Goa [(2003) 6 SCC 56], wherein allegedly a different
note has been struck from an earlier decision of this Court in Delhi Transport
Corporation Ltd. v. Rose Advertising [(2003) 6 SCC 36].
contra, Mr. R.K. Jain, learned senior counsel appearing on behalf of the respondent
urged that having regard to the object of 1996 Act, as also in view of the fact
that the arbitrators had already entered into the reference pursuant to the
consent order dated 6.5.1997, this Court may not interfere with the impugned
judgment in exercise of jurisdiction under Article 136 of the Constitution.
Strong reliance was placed on the judgment of this Court in the case Chandra
Singh v. State of Rajasthan [(2003) 6 SCC 545].
next contended that a proceeding commences in the Court of law when a plaint is
filed and by analogy an arbitration proceeding must be held to be initiated
when a claim petition is filed by the claimant before the arbitrator; that
before a proceeding is said to be initiated before a Court or Tribunal, the
existence of such Tribunal was a condition precedent for initiation of
proceedings. The learned counsel, therefore, contended that for purposes of
determining the point of time "when an arbitration proceeding
commences", an arbitral Tribunal must be constituted. Reliance in this
connection was placed on the judgment of this Court in the case of Secy. to
Government of Orissa v. Sarbeswar Rout reported in [(1989) 4 SCC 578]. It was
further submitted that an arbitrator enters into a reference when he applies
his mind to the differences and disputes between the parties and not prior
it was submitted that the proceeding commences when the arbitrator enters upon
the reference. Reliance was placed on the judgment of this Court in the case
Sumitomo Heavy Industries Ltd. v. ONGC Ltd. reported in [(1998) 1 SCC 305]. It
was further submitted that in any event, the starting point for commencement of
the arbitration proceedings would be when the dispute was referred to by the
High Court on 6.5.1997 and not prior thereto.
counsel for the respondent contended that in any event as the parties had
agreed in terms of clause 20 of the contract that all such arbitration
proceedings shall be in accordance with and subject to the provisions of the
1940 Act or any statutory modifications or re-enactment thereof, they must be
deemed to have agreed that new Act shall apply.
reliance has been placed on the judgment of this Court in the case of Thyssen Stahlunion
GMBH v. Steel Authority of India Ltd. reported in [(1999) 9 SCC 334]}, Delhi
Transport Corporation Ltd. (supra) and N.S. Nayak (supra). Lastly, it was
submitted that section 37 of the 1940 Act, being for the purposes of
commencement of the period of limitation, had no application whatsoever for the
purposes of determining the question as to whether the 1940 Act will apply or
the 1996 Act will apply.
now notice the provisions of the 1940 Act. Section 2 defines arbitration
agreement to mean a written agreement to submit present or future dispute to
the arbitration, whether an arbitrator is named therein or not. Section 2(e)
defines "reference" to mean reference to arbitration. Therefore, the
term "arbitration agreement" is different from the term
agreement to refer" and "a reference" are two separate
transactions while an arbitration agreement is only a contract to refer,
reference is delegation of authority to a named arbitrator.
8 confers power upon the Court to appoint arbitrator where the parties
concurred in the appointment of an arbitrator.
such a case, after the Court appointed an arbitrator, it is the parties who
referred the dispute to him. On the other hand, section 20 enabled a party to
apply for filing of the arbitration agreement in the Court and that section
empowered the Court to make an order of reference to the arbitrator appointed
by the parties and in the absence of such appointment, the Court was empowered
to make an order of reference to the arbitrator appointed by it. In other
words, under section 20, unlike section 8, it is the Court which referred the
dispute. In the case of Fertilizer Corporation of India Limited v. M/s Domestic Engineering
Installation reported in [AIR 1970 Allahabad 31], it has been held that under section 20(4), three courses were open
to the Court. After the arbitration agreement was ordered to be filed, the
Court shall proceed to make reference, firstly to the arbitrator appointed by
the parties in the agreement, secondly to the arbitrator not named in the
agreement but with regard to whom the parties agreed otherwise, and thirdly
when the parties did not agree upon an arbitrator, to an arbitrator appointed
by itself. This difference between section 8 and 20 was important as under
section 48 of the 1940 Act, it was provided that the Act shall not apply to any
reference pending at the commencement of the said Act, to which the law in
force immediately prior to the commencement shall continue to apply
notwithstanding any repeal effected by the Act. Section 48 was a transitory provision
in which the emphasis was on "reference". Section 48 of the 1940 Act
which corresponded to section 25 of the English Arbitration Act 1899 was a
subject of debate in larger number of matters as different dates for different
stages of arbitration proceedings were provided for.
transitory provision is to be interpreted in the light of facts and
circumstances existing on the date the new Act coming into force, section 21
and 85(2) of the 1996 Act are quoted below: "21. Commencement of arbitral
proceedings. Unless otherwise agreed by the parties, the arbitral proceedings
in respect of a particular dispute commence on the date on which a request for
that dispute to be referred to arbitration is received by the respondent.
Repeal and savings. (1) .
Notwithstanding such repeal,
the provisions of the said enactments shall apply in relation to arbitral
proceedings which commenced before this Act came into force unless otherwise
agreed by the parties but this Act shall apply in relation to arbitral
proceedings which commenced on or after this Act comes into force;
rules made and notifications published, under the said enactments shall, to the
extent to which they are not repugnant to this Act, be deemed respectively to
have been made or issued under this Act."
reading of section 21 of the 1996 Act indicates that arbitral proceedings in
respect of a dispute commences on the date on which request to refer such
dispute to arbitration is received by the respondent, unless otherwise agreed
by the parties. Section 21 is similar to section 14 of the English Arbitration
Act 1996 which provides that parties are free to agree as to when an
arbitration is to be regarded as commencing both under the Arbitration Act 1996
and for limitation purposes. In the absence of such agreement, section 14 of
that Act applies. Russell on Arbitration, [XXII Ed. Page 165] says as follows:-
"Commencement for limitation purposes. The parties are free to agree when an
arbitration is to be regarded as commencing both under the Arbitration Act 1996
and for limitation purposes.
absence of agreement the provisions of section 14 of the Arbitration Act 1996
that section an arbitration is treated as being commenced when a notice in
writing is served on the other party requiring him to agree to the appointment
of an arbitrator or, if the parties are each to make an appointment, requiring
him to appoint an arbitrator. The party giving the notice does not have to have
already appointed his own arbitrator. Where, however, the arbitration agreement
specifies the person to be appointed as arbitrator, the arbitration is treated
as being commenced when a notice in writing is served on the other party
requiring him to submit the dispute to that person. Finally, if the arbitrator
is to be appointed by someone other than a party to the arbitration
proceedings, such as an arbitral institution, the arbitration is treated as
being commenced when notice in writing is given to that other person requesting
him to make the appointment. It is prudent to send to the respondent a copy of
the notice addressed to the person requested to make the appointment as this
may avoid arguments about when the notice was given." In the present
matter, one is concerned with transitional provision, i.e. section 85(2)(a)
which enacts as to how the statute will operate on the facts and circumstances
existing on the date it comes into force and, therefore, the construction of
such a provision must depend upon its own terms and not on the basis of section
21 (see Principles of Statutory Interpretation by G.P. Singh 8th Ed. Page 188).
In Thyssen's case (supra), section 48 of the old Act and section 85(2)(a) of
the 1996 Act came for consideration. It has been held by this Court that there
is a material difference between section 48 of the 1940 Act, which emphasized
the concept of "reference" vis- `-vis section 85(2)(a) of the 1996
Act which emphasizes the concept of "commencement"; that there is a
material difference in the scheme of two Acts; that the expression "in
relation to" appearing in section 85(2)(a) refers to different stages of
arbitration proceedings under the old Act; and lastly that section 85(2)(a)
provides for limited repeal of the 1940 Act, therefore, I am of the view that
one cannot confine the concept of 'commencement' under section 85(2)(a) only to
section 21 of the 1996 Act which inter alia provides for commencement of
arbitral proceedings from the date on which a request to refer a particular
dispute is received by the respondent. In this connection, I may usefully quote
commentary on "Commercial Arbitration" (2nd Edition, page 169) by Mustill
& Boyd which reads as under: "It is common to use expressions such as
'a notice of arbitration' or 'the commencement of an arbitration' as if they
had the same meaning for all purposes, in the context of all the various
possible types of agreement to arbitrate. This is misleading, for when
enquiring whether sufficient steps have been taken to set an arbitration in
train, the answer may depend on the reason why the question is being asked.
There are several different reasons why it may matter when the arbitration has
these, the following are probably the most important.
the question may be whether, at a given moment, there is any person or group of
persons with jurisdiction to make an award, and power to give directions and
make rulings in the course of the reference. For this purpose, what is being
considered is whether the arbitration has reached the stage where there is a
completely constituted arbitral tribunal.
the problem may relate to the jurisdiction of the arbitrator. Thus, if there is
a general reference of disputes the scope of the reference will be determined
by the state of the disputes at the moment when the arbitration was begun.
Disputes arising thereafter must be the subject of a separate arbitration,
unless brought within the existing reference by consent.
the purpose of the enquiry may be to ascertain whether the claimant has taken
such steps as may be prescribed by statute or contract for the purpose of
preventing his claim from being time barred.
it may be necessary to consider whether one party has taken sufficient steps
towards setting the arbitration in motion to give him certain procedural
advantages in the appointment of the tribunal: either as a preliminary to
appointing his own nominee as sole arbitrator, or at least by way of preventing
the other party from exercising his statutory right to make, or procure, a nomination
plain that expressions such as 'the commencement of the arbitration' must have
different meanings in these various contexts. For example, the giving of a
notice to concur in the appointment of a sole arbitrator is sufficient to
prevent time from running under the Limitation Act 1980; and it is also an
essential first step towards the making of a default appointment under section
10(a) of the Arbitration Act. But the arbitration has not at this stage
'commenced' in any practical sense, since there is no person or group of
persons charged with any authority to determine the matters in dispute."
Therefore, the position in law is that before the English Arbitration Act 1996,
the expression "commencement of arbitration proceedings" depended
upon the facts of each case.
was no single conclusive test to determine 'commencement". In a case,
where it was necessary to consider whether one party had taken sufficient steps
for setting arbitration in motion, the court has to consider the date of
setting up of arbitral tribunal. In the matter involving the scope of reference
the test of the state of dispute was relevant.
the expression "commencement of arbitration proceedings' had different
meanings in various contexts. The learned authors have further observed that
although notice to concur is an essential step, arbitration proceedings cannot
be said to have commenced in practical sense till tribunal charged with
authority stood duly constituted. It is for this reason that English
Arbitration Act 1996 now provides under section 14 that commencement will take
place from the date when notice to concur is served. This view is supported by
the judgment of the division bench of this Court in Delhi Transport Corporation
Ltd. (supra), in which a similar question was raised. In that matter, the
parties had entered into an agreement on 15.1.1993 for display of advertisement
on DTC buses in Delhi. The agreement was for a period of three years commencing
from 15.1.1993. The agreement contained an arbitration clause. Disputes arose
between the parties. A request was made by the contractor on 9.1.1995 for
appointment of arbitrator to settle the disputes. This was followed by another
letter dated 26.11.1995 containing a similar request. On 16.1.1996, he filed a
petition under section 20 of the 1940 Act. The counsel appearing for DTC made a
statement in the court on 19.7.1996 that an arbitrator had been appointed on
4.7.1996 as per the agreement. The petition became infructuous in view of that
statement. The arbitrator conducted the proceedings and made an award on
enforce the award, the contractor filed an application under 1996 Act. The DTC
contested that application on the ground that the 1996 Act was not applicable
and, therefore, the execution petition was not maintainable. The contention of
the DTC before the High Court was that the proceedings had commenced under the
old Act. This objection was upheld by the learned single Judge based on the
view that the arbitration proceedings had commenced on the date when request
for appointment of arbitrator was made which was prior to 16.8.1996 when the
new Act came into force. The contractor went in appeal. The division bench of
the High Court found on facts that the parties went for arbitration with clear
understanding that the proceedings would be conducted under the new Act,
particularly when the appointment of arbitrator was made after the new Act had
come into force and particularly when the parties had participated in the
arbitration proceedings with the understanding that the proceedings would be
governed by the new Act. Hence, the High Court decided the matter in favour of
the contractor. Aggrieved, the DTC came in appeal to this Court. This Court
found on facts that the arbitration clause, which is identical to the clause in
the present case, showed that the parties had agreed to be governed by the law
in force at the relevant time and such arbitration clauses were recognised
under the new Act. This Court further found from the conduct of the arbitration
proceedings and the participation of the parties therein that the parties had
agreed to proceed under the 1996 Act and, accordingly, this Court upheld the
judgment of the division bench of the High Court. In my view the said judgment
applies to the present case. The point to be noted is that while construing
section 85(2) of the 1996 Act, which is a transitional provision, the terms of
the arbitration clause and the conduct of the parties were taken into account.
interpretation of section 85(2)(a) cannot be confined to section 21 of the 1996
Act. However, in cases where the new Act is applicable one has to go by section
21 and in which case arbitration proceedings will commence from the date when
request is received by the respondent for referring the dispute to arbitration,
unless the parties have agree to the contrary.
case of N.S. Nayak (supra), this court held that even in cases of pending
arbitration proceedings the parties had an option of changing the procedure so
as to be governed by the provisions of the 1996 Act.
case of Charles M. Willie & Co. (Shipping) Ltd. (supra), the facts were as
follows. By a memorandum of agreement dated April 1, 1990, Charles M. Willie & Co.
(Shipping) Ltd. sold their vessel to Ocean Laser Shipping Ltd.
MOA provided for an arbitration clause, which inter alia stated that if any
dispute arises in connection with the contract, the same shall be decided by a
single arbitrator and if the parties did not agree on the appointment of a
single arbitrator, the dispute shall be settled by three arbitrators, each
party appointing one arbitrator, the third to be appointed by London Maritime
Arbitrators Association. On 21.11.1990, Willie received a letter from solicitor
of Ocean Laser Shipping Ltd. enquiring about an engine stoppage in January,
the dispute started. On 12.3.1992, Ocean Laser Shipping Ltd. through their
solicitor invited Willie & Co. to agree on the appointment of a single
arbitrator and further stated that in the event of Willie & Co.'s failure
to nominate its arbitrator by 3.4.1992, Ocean Laser Shipping Ltd. appointed one
Mr. Kazantzis as an arbitrator. On 5.11.1993, Ocean Laser submitted their claim
before the arbitrator. On 18.2.1994, points of defence were filed. One of the
points which arose for determination was as to when the arbitration could be
said to have commenced. Taking a clue from section 34(3) of the Limitation Act,
1980 which provided that an arbitration should be treated as having been
commenced when one party served on the other party a notice requiring him to
agree to the appointment of an arbitrator, it was held by Queen's Bench that
commencement took place from receipt of such notice. This judgment has no
application to the facts of the present case.
present case involves interpretation of transitional provisions, which was not
in issue in the said judgment.
the judgment of Queen's Bench was based on provisions of Limitation Act, by
analogy. Further, the judgment of Queen's Bench was delivered under the
Arbitration Act, 1996 under which the parties are free to agree when
arbitration is to be regarded as having commenced both under the said Act and
for limitation purposes and that in the absence of the agreement, the
provisions of section 14 of the English Arbitration Act, 1996 were to apply.
up, in this case, the question concerns interpretation of transitional
provisions; that section 85(2)(a) emphasizes the concept of
"commencement" whereas section 48 of the 1940 Act emphasized the
concept of "reference"; that section 85(2)(a) provides for implied
repeal; that the scheme of 1940 Act is different from the 1996 Act; that the
word "reference" in section 48 of the old Act had different meanings
in different contexts; and for the said reasons, I am of the view that while
interpreting section 85(2)(a) in the context of the question raised in this
appeal, one cannot only rely on section 21 of 1996 Act.
light of what is stated above, I now refer to the facts of the present case.
The parties entered into an agreement on 7.4.1992 which contained an
arbitration clause 20, which inter alia stated that in the case of dispute
between the parties arising in relation to the contract, the dispute shall be
referred to a single arbitrator, in case both sides agree upon one such
arbitrator and failing such agreement, the dispute shall stand referred to two
arbitrators, one to be appointed by the either party, and in case of
disagreement, between the two arbitrators, the dispute was to be referred to an
umpire to be appointed by the two arbitrators. Before entering upon the
reference under clause 20 quoted above, all such arbitration proceedings were
to be governed by the provisions of the Arbitration Act, 1940 or under any
statutory re-enactment. This clause is similar to the one considered by this
Court in the case of Delhi Transport Corporation Ltd. (supra). On the strength
of the agreement dated 7.4.1992, the respondent herein filed title suit No.40
of 1995 for injunction and in the said suit, the appellant herein applied for
stay under section 34 of the 1940 Act. Suffice it to state that on 6.5.1997,
when the matter came up before the High Court, the parties agreed that all
disputes between them may be referred to arbitrators chosen by the parties as
per the agreement. A consent order was accordingly passed on that day by the
High Court referring the dispute to the arbitrators.
for all practical purposes, the arbitration commenced on 6.5.1997, by which
time the 1996 Act had come into force.
circumstances, I am in agreement with the majority decision of the arbitrators
that the proceedings in the present case would be governed by the provisions of
the 1996 Act.
above reasons, I respectfully dissent from the opinion of Sinha, J.
Consequently I am of the view that this Civil Appeal ought to fail and be
dismissed with no order as to costs.
APPEAL Nos. 9673-9674 OF 2003 Now coming to the Civil Appeal Nos.9673-9674 of
2003, the facts briefly are as follows. On 6.4.1998, the learned arbitrators by
majority decision took the view that in the present case the arbitration
proceedings had commenced on 6.5.1997 when a consent order was passed by the Patna
High Court and, therefore, the proceedings were governed by the 1996 Act.
the appellant herein had moved the single Judge of Delhi High Court. By order
dated 13.10.1998, the learned single Judge of the High Court was pleased to
uphold the majority decision dated 6.4.1998. Being aggrieved, the appellant
carried the matter in Letters Patent appeal which was dismissed as not
maintainable. Having regard to the provisions of section 39 of the 1940 Act as
interpreted by this Court in the case of Union of India v. Mohindra Supply
Company reported in [AIR 1962 SC 256] second appeal, which included Letters
Patent appeal under section 39(2), was not maintainable.
the civil appeal Nos.9673-74 of 2003 fail and are dismissed.
shall be no order as to costs in all the appeals.