Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., (SC) BS26627
SUPREME COURT OF INDIA

Before:- D.P. Wadhwa and M.B. Shah, JJ.

Civil Appeal No. 6036 of 1998. D/d. 7.10.1999.

Thyssen Stahlunion GMBH - Appellants

Versus

Steel Authority of India Ltd. - Respondent

WITH

Civil Apepal No. 4928 of 1987 and Civil Appeal No. 61 of 1999.

For the Appearing Parties :- Mr. R.F. Nariman, Mr. R.P. Bhatt, Mr. S.G. Desai, Mr. Dipankar P. Gupta, Mr. A.K. Ganguli, Senior Advocates with Mr. R.N. Karanjawala, Mr. Gourab Banerjee, Mr. Arvind Kumar, Ms. Seema Sapra, Ms. Suranya, Mrs. Manik Karanjawala, Mr. B.V. Desai, Mr. Siddharth Chowdhury, Mr. R. Rahim Kaliash Vasdev, Mr. Jaideep Gupta, Mr. Buddy A Ranganadhan, Ms. S. Madan, Mr. Krishnan Venugopal, Mr. R. Sasiprabhu, Mr. Manish Garg, Mr. Uday N. Tiwary, Mr. K.K. Lahiri, Mr. Ejaz Maqbool, Mr. B.K. Mishra and Mr. Subu Ranjan, Advocates.

A. Arbitration and Conciliation Act, 1996, Section 85(2)(a) - Foreign Awards (Recognition and Enforcement) Act, 1961 - Arbitration (Protocol and Convention) Act, 1937 - Foreign awards - Enforcement of foreign awards under the new Act - After the repeal of Foreign Awards Act a foreign award can now be enforced under the new Act of 1996 - It cannot be said that any right had accrued to the party to claim enforcement of foreign award under the Foreign Awards Act - Therefore, Section 6 of the General Clauses Act would not apply - Section 85(2)(a) of the new Act does not keep the Foreign Awards Act alive for the purpose of enforcement of a foreign award given after the date of commencement of the new Act though arbitral proceedings in foreign land had commenced prior to that.

[Paras 36 to 39]

B. Arbitration and Conciliation Act, 1996, Section 85(2)(a) - Foreign Awards - Arbitration proceedings - Foreign Awards Act and the Arbitration (Protocol and Convention) Act, 1937 are concerned only with recognition and enforcement of the foreign awards and do not contain provisions for the conduct of arbitral proceedings - Proceedings of arbitration after commencement of new Act will be governed by the procedure prescribed under the new Act.

[Para 38]

C. Contract Act, Section 28 - Arbitration and Conciliation Act, 1996, Section 85 - Arbitration Agreement - Option to the application of new Act or the old Act - Parties can always agree that provisions that are in force at the relevant time would apply - If the parties have agreed that provisions of law as existing at the relevant time will apply, there cannot be any objection to that - It cannot be said that no agreement can be made for application of provisions which had not come in existence at the time of agreement.

[Paras 33 to 35]

D. Arbitration Act, 1940, Sections 30 and 32 - Arbitration and Conciliation Act, 1996, Section 85(2)(a) - Structure of both the Acts is different - If the arbitration proceedings commenced under the old Act, a right accrued to the parties to challenge the award under the same Act - It will be unjust to debar a party from challenging the award under the same Act.

[Paras 30, 49, 47, 48 and 85]

E. Arbitration and Conciliation Act, 1996, Sections 49, 47, 48 and 85 - Foreign awards (Recognition and Enforcement) Act, 1961, Sections 7 and 8 - Foreign Award - Where the court is satisfied that the foreign award is enforceable under Chapter I, Part II relating to New York Convention Awards, the award is deemed to be a decree of that court - The only difference is that under the Foreign Awards Act a decree follows the award, whereas under the new Act foreign award is already stamped as a decree - Thus if the provisions of the two Acts relating to enforcement of foreign award are juxtaposed, there would be hardly any difference.

[Para 37]

Cases Referred :-

Sundaram Finance Ltd. v. NEPC India Ltd., 1999(1) RCR (Civil) 580 : 1999(2) SCC 479.

Sumitomo Heavy Industries Ltd. v. ONGC Ltd., 1998(1) SCC 305.

Abbott v. Minister for Lands, 1895 AC 425 (PC),

Hungerford Investment Trust Limited v. Haridas Mundhra, 1972(3) SCR 690.

D.C. Bhatia v. Union of India, 1995(1) RCR (Rent) 25 : 1995(1) SCC 104.

Oil and Natural Gas Commission v. Western Company of North America, 1987(1) SCR 1024.

Sir Dinshaw Manekji Patit v. G.B. Badkas, AIR 1969 Bombay 151.

Devkumarsingji Kasturchandji v. State of Madhya Pradesh, AIR 1967 Madhya Pradesh 268 (DB).

M.S. Shivananda v. Karnataka State Road Transport Corporation, 1980(1) SCC 149.

Hamilton Gell v. White, 1922(2) KB 422.

Lalji Raja & Sons v. Firm Hansraj Nathuram, 1971(1) SCC 721.

Kuwait Minister of Public Works v. Sir Frederick Snow and Partners, 1984(1) All England Reporter 733.

Navin Chemicals Mfg. & Trading Co. Ltd. v. Collector of Customs, 1993(4) SCC 320.

M/s. Doypack Systems Pvt. Ltd. v. Union of India, 1988(2) SCC 299.

Mansukhlal Dhanraj Jain v. Eknath Vithal Ogale, 1995(2) SCC 665.

M/s. Dhanrajamal Gobindram v. M/s. Shamji Kalidas and Co, 1961(3) SCR 1020.

Commissioner of Income Tax, U.P. v. M/s. Shah Sadiq and Sons, 1987(3) SCC 516.

Bansidhar v. State of Rajasthan, 1989(2) SCC 557.

Director of Public Works v. Ho Po Sang, 1961(2) All England Reporter 721.

Gajraj Singh v. State Transport Appellate Tribunal, 1997(1) RCR (Civil) 244 (SC).

G. Ekambarappa & Ors. v. Excess Profits Tax Officer, Bellary, 1967(3) SCR 864.

MMTC Ltd. v. Sterlite Industries (India) Ltd., 1997(1) RCR (Civil) 686.

Pepper v. Hart, 1993(1) All. E.G. 42.

Sohan Lal v. Amin Chand and Sons, 1974(1) SCR 453.

Gujarat Electricity Board v. Shantilal R. Desai, AIR 1969 Supreme Court 239 : 1969(1) SCR 580.

Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh, 1953 SCR 987.

Reshma Constructions v. State of Goa, 1999(1) MLJ 462.

Shetty's Construction Co. P. Ltd. v. Konkan Railway Construction, 1999(4) RCR (Civil) 447 : 1998(5) SCC 599.

M/s. Rani Constructions Pvt. Ltd v. Himachal Pradesh State Electricity Board, Civil Appeal No. 61 of 1999.

Western Shipbreaking Corporation v. M/s. Clareheaven Ltd., Civil Appeal No. 4928 of 1997.

JUDGMENT

D.P. Wadhwa, J. - The Facts :

These three appeals raise three different questions relating to the construction and interpretation of Section 85 of the Arbitration and Conciliation Act, 1996 (the 'new Act' for short) which contains repeal and saving provision of the three Acts, namely, the Arbitration (Protocol and Convention) Act, 1937, the Arbitration Act, 1940 (the 'old Act' for short) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (the 'Foreign Awards Act' for short).

2. This Section 85 of the new Act we reproduce at the outset :

3. In the case of Thyssen Stahlunion GMBH (CA No. 6036 of 1998) the contract for sale and purchase of prime cold rolled mild steel sheets in coils contains arbitration agreement. Relevant Clauses are as under :

4. In the case of Western Shipbreaking Corporation (CA No. 4928 of 1997) under Memorandum of Agreement dated November, 4, 1994 M/s. Clareheaven Ltd. agreed to sell to Western Shipbreaking Corporation a ship "M.V.K. Kaldera". Clause (19) of the Memorandum of Agreement contained arbitration clause which is as under :

Arbitration proceedings in this case were held in United Kingdom prior to the enforcement of the new Act. The award was made on February 25, 1996 in London. The question which arises for consideration is :

5. In the case of M/s. Rani Constructions Pvt. Ltd. (CA No. 61 of 1999) under the contract which was for the construction of certain works of the Himachal Pradesh State Electricity Board, there was an arbitration agreement contained in clause 25 which, in relevant part, is as under :

Disputes having arisen, these were referred to the sole arbitrator on December 4, 1993. The arbitrator gave his award on February 23, 1996 after the new Act had come into force. On account of difference of opinion in two judgments of the Himachal Pradesh High Court, both rendered by single Judges, as to whether it is old or new Act will apply, a learned single Judge of the High Court referred the following question to a larger Bench :

6. The Division Bench of the High Court by the impugned judgment dated 16, 1998 held that clause 25 of the agreement "does not admit of interpretation that this case is governed by Act of 1996".

7. Arguments have been addressed in considerable detail for and against the application of the new Act or the old Act in the cases of Thyssen and Rani Construction and the Foreign Awards Act in the case of Western Shipbreaking Corporation. We would, however, refer to these arguments in brief in so far we consider these to be relevant to decide the issues before us.

The Submissions :

8. Mr. F.S. Nariman, who appeared for Thyssen, made the following submission :

2. In view of the savings provision under clause (a) of sub-section (2) of Section 85 of the new Act it is not necessary to refer to Section 6 of the General Clauses Act, 1897 ["6. Effect of repeal. - Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then unless a different intention appears, the appeal shall not -

3. New Act is based on UNICTRAL Model Law. It is a progressive Act. Objects which led to passing of the new Act should be kept in view. For this, reference may be made to the Preamble [WHEREAS the United Nations Commission on International Trade Law (UNCITRAL) has adapted the UNICTRAL Model Law on International Commercial Arbitration in 1985;

AND WHEREAS the General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice;

AND WHEREAS the UNCITRAL has adapted the UNICTRAL Conciliation Rules in 1980;

AND WHEREAS the General Assembly of the United Nations has recommended the use of the said Rules in cases where a dispute arises in the context of international commercial relations and the parties seek an amicable settlement of that dispute by recourse to conciliation;

AND WHEREAS the said Model Law and Rules make significant contribution to the establishment of a unifed legal framework for the fair and efficient settlement of disputes arising in international commercial relations;

AND WHEREAS it is expedient to make law respecting arbitration and conciliation, taking into account the aforesaid Model Law and Rules;

Be it enacted by Parliament in the forty seventh year of the Republic as follows.] of the new Act as well. In the Statement of Objects and Reasons [Statement of objects and Reasons

4. The main objectives of the Bill are as under :-

5. The Bill seeks to achieve the above objects.], the objectives behind introduction of the New arbitration law have been explained. It is clearly intended that the enforcement of the award given after the new Act came into force would be governed by the new Act. Interpretation of the provision of Section 85 has to be purposeful which advances the object of the new Act. In Sundaram Finance Ltd. v. NEPC India Ltd., 1999(1) RCR (Civil) 580 : 1999(2) SCC 479 the question that arose for consideration was whether under Section 9 of the new Act court has jurisdiction to pass interim orders even before arbitral proceedings commence and before an arbitrator is appointed. Under this Section Court is empowered to pass interim orders before or during arbitral proceedings or at any time after the making of the arbitral award but before its enforcement. During the course of discussion this Court referred to the statement of objects and reasons which led to the promulgation of the new Act and said :

4. Law governing arbitration proceedings can be different than that governing the award. In this connection reference may be made to a decision of this Court in Sumitomo Heavy Industries Ltd. v. ONGC Ltd. and others, 1998(1) SCC 305.

9. In Sumitomo Heavy Industries Ltd.'s case (supra) under the arbitration agreement between the parties proceedings were to be held at London in accordance with the provisions of International Chamber of Commerce and the rules made thereunder as amended from time to time. Award was made on June 27, 1995. ONGC Ltd. filed a petition in the High Court at Bombay praying that the respondent be directed under Section 14 of the old Act to file the award in that court. It was contended by ONGC that the award was invalid, unenforceable and liable to be set aside under the provisions of the Arbitration Act, 1940. This petition of the ONGC was allowed by the High Court. It was noticed that during the course of preliminary hearing in the Queens Bench Division, Commercial Court, in London, Potter, J. had observed that one of the aspects of the case for consideration was :

Decision of the Bombay High Court was challenged in this Court. This Court said that the central issues in the appeal was as to what was the area of operation of the curial law and went on to observe as under :-

5. Section 85 of the new Act provides for a limited repeal. This Section be contrasted with Section 48 of the old Act, which is as under :-

This departure from the language used in Section 48 of the old Act is deliberate and has to be given effect to while considering the scope of Section 85 of the new Act.

6. Assuming that Section 6 of the General Clauses Act applies, the question whether a party gets a right at the time when the arbitration proceedings commenced under the old Act and that the award given after coming into force of new Act would yet be governed under the old Act, can be answered only if any vested right accrued to the party. Vested rights accrue when proceedings for enforcement of the award are taken and not before that. Right to take advantage of an enactment is not a vested right. One cannot have mere abstract right but only accrued right. Until award is made no party has an accrued right. Till the award is made nobody knows his rights. In this connection reference may be made to a decision of the Privy Council in Abbott v. The Minister for Lands, 1895 AC 425 (PC), which was followed by this Court in Hungerford Investment Trust Limited v. Haridas Mundhra and others, 1972(3) SCR 690. Reference may also be made to another decision of this Court in D.C. Bhatia and others v. Union of India and another, 1995(1) RCR (Rent) 25 : 1995(1) SCC 104.

10. In Abbott v. The Minister for Lands, 1895 AC 425 (PC), the Court said that "the mere right, existing at the date of a repealing statute, to take advantage of provisions of the statute repealed is not a "right accrued" within the meaning of the usual saving clause." The appellant had contended that he under the repealed enactment he had a right to make the additional conditional purchase, and this was a "accrued right" at the time the Crown Lands Act of 1884 was passed and that notwithstanding the repeal it remained unaffected by such repeal. The 1884 Act had repealed earlier Crown Lands Act of 1861. The Board observed :-

11. This Court in Hungerford Investment Trust Limited v. Haridas Mundhra and others, 1972(3) SCR 690 followed decision of Privy Council in Abbott v. The Minister for Lands, 1895 AC 425 (PC) holding that the mere rights to take advantage of provisions of an Act is not an accrued right.

12. In D.C. Bhatia and others v. Union of India and another, 1995(1) SCC 104 the question which arose for consideration before this Court related to the interpretation and constitutional validity of Section 3(c) of the Delhi Rent Control Act. Delhi Rent Control Act was amended with effect from December 1, 1988 when Section 3(c) was introduced which provided that the provisions of that Act will not apply to any property at a monthly rent exceeding Rs. 3,500/-. This court while upholding the constitutional validity of the provisions as contained in Section 3(c) of Delhi Rent Control Act observed that "we are unable to uphold the contention that the tenants had acquired a vested right in the properties occupied by them under the statute. We are of the view that the provisions of Section 3(c) will also apply to premises which had already been let out at the monthly rent in excess of Rs. 3500/- when the amendment made in 1988 came into force". One of the contentions raised by the tenants was that they had acquired vested rights which could not be disturbed unless the amending Act contained specific provisions to that effect. They said that under the existing law tenants had acquired valuable property rights and they could neither be evicted nor the rent could be enhanced and that even a suit could not be brought against a tenant on the expiry of the lease. This Court repealed the contention and said :-

7. The expression "in relation to" appearing in Section 85(2)(a) of the new Act refers to stage of arbitration proceeding under the old Act. Reference is made to various provisions of the new Act employing the words "arbitral proceedings" or "arbitral proceedings and award" to stress that in the new Act there are different stages in the process of arbitration. Section 42 [42. Jurisdiction. - Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court.] of the new Act uses the expression "arising out of that agreement and the arbitral proceedings". There is a difference between the expressions "arising out of" and that "relating to".

8. Section 36 [36. Enforcement.- Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Civil Procedure Code, 1908 (5 of 1908) in the same manner as if it were a decree of the court.] of the new Act is a deeming provision which provides for the enforcement of the award as if it is a decree of a civil court under the Civil Procedure Code. This stage comes after application for setting aside of the arbitral award under Section 34 has been dealt with. This Court in Oil and Natural Gas Commission v. Western Company of North America, 1987(1) SCR 1024 while dealing with the old Act said that till an award is transformed into a judgment and decree under Section 17 of the Arbitration Act, 1940, it is altogether lifeless from the point of view of its enforceability. Life is infused into the award in the sense of its becoming enforceable only after it is made rule of the court upon the judgment and decree and in terms of the award being passed.

9. Claim of the respondents that they had acquired vested right to challenge the award under the old Act in view of Section 6 of the General Clauses Act is also incorrect. In this connection reference be made to Section 100 of the Civil Procedure Code, which was amended by Section 37 of the Civil Procedure Code (Amendment) Act, 1976. Now, by Section 100 provisions of second appeal were made more stringent. But then the right which a party had acquired before the amendment came into operation was saved specifically by clause (m) [(m) the provisions of section 100 of the principal Act, as substituted by section 37 of this Act, shall not apply to or affect any appeal from an appellate-decree or order which had been admitted, before the commencement of the said section 37, after hearing under Rule 11 of Order 41, and every such admitted appeal shall be dealt with as if the said section 37 had not come into force.] of Section 97 of the Civil Procedure Code (Amendment) Act, 1976.

Mr. S.G. Desai, learned counsel appearing for Rani Constructions, supported Mr. Nariman in his submissions. He also said that the expression "in relation to" appearing in Section 95(2)(a) refers to different stages of arbitration proceedings under the old Act and does not cover the proceedings after the award is given. We summarise his submissions as well :

The learned single Judge of the High Court considered the expression "law for the time being in force" and said that the natural import of the words "for the time being" indicate definite future state of thing, and in this connection reference was made to Stroud's Judicial Dictionary, (3rd Edition) Vol. IV page 3030 which is as follows :

High Court said that in their ordinary sense, the words "law for the time being in force" referred not only to the law in force at the time of the passing of the Defence of India Act but also to any law that may be passed subsequently and which is in force at the time when the question of applicability of such law to arbitrations held under said Section 19 arose.

12. In Devkumarsingji Kasturchandji v. State of Madhya Pradesh & Ors., AIR 1967 Madhya Pradesh 268 (DB) Section 132(1) and Section 135 of the Madhya Pradesh Municipal Corporation Act, 1956 empowered the Municipal Corporation to impose a tax on lands and buildings which the Corporation did under the exercise of that power. The State Legislature enacted a law called the Madhya Pradesh Nagriya Sthavar Sampati Kar Adhiniyam, 1964 which provided for the levy of tax on lands and buildings in the urban areas in the State of Madhya Pradesh. Sub-section (3) of Section 4 of the Madhya Pradesh Corporation Act provided that the tax levied and payable under that Act shall be in addition to any other tax for the time being payable under any other enactment for the time being in force in respect of the land or the building or portion thereof. Act of 1964 was challenged and one of the grounds of challenge was that the State Legislature having delegated its power to impose tax on lands and buildings in favour of the Municipal Corporation and Municipalities under the Municipal Corporation Act, 1956 and the M.P. Municipalities Act, 1961 and the local authorities having imposed a tax on lands and buildings, the State Legislature had no power to levy tax on lands and buildings. The Court said that the expression "any other enactment for the time being in force" did not mean an enactment which was already in force at the time the Corporation imposed a tax under Section 132 of the Municipal Corporation Act but meant any legislation enacted whether before or after the imposition of the tax by the Corporation. The Court said that the general sense of the words "for the time being" is that of time indefinite and refers to indefinite state of facts, which will arise in future and which may vary from time to time.

2. Section 28 ["28. Agreements in restraint of legal proceedings void. - Every agreement,-

Exception 1. - Saving of contract to refer to arbitration dispute that may arise. - This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration and that only the amount awarded in such are arbitration shall be recoverable in respect of the dispute so referred.

Exception 2. - Saving of contract to refer questions that have already arisen.- Nor shall this section render illegal any contract in writing by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to reference to arbitration."] of the Contract Act does not bar the agreement between the parties if they wish that arbitration proceedings be governed by any enactment relating to arbitration that may be in force at the relevant time.

3. Expression "unless otherwise agreed" used in Section 85(2)(a) of the new Act would clearly apply to the case (Civil Appeal No. 61 of 1999). Parties were clear in their mind that the old Act or any other statutory modification or re-enactment of that Act would govern the arbitration. Parties can anticipate that the new enactment may come into operation at the time the disputes arise. It cannot be said that such an agreement is in restraint of legal proceedings. Agreement can be entered into even before or after the new Act comes into force.

4. There is no right in procedure. Right to challenge the award is still there in the new Act though now in the restricted from. It cannot be said that any prejudice has been caused to a party when it has to challenge the award under the new Act. High Court was wrong that the arbitration clause was hit by Section 28 of the Contract Act and that the agreement for the application of the new Act has to be entered into only after the coming into force of the new Act.

At this stage itself we may also note the submissions made by Mr. Krishnan Venugopal, counsel appearing for M/s. Clareheaven Ltd. (CA 4928/97) in support of the decision of the High Court holding that for enforcement for the foreign award new Act would apply :-

Provisions of Foreign Awards Act, 1961 cannot be put into operation as that Act has been repealed. In this eventuality, Section 6 of the General Clauses Act would apply. But then Western Shipbreaking Corporation did not acquire any vested right to enforce the foreign award under the Foreign Awards Act and as such Section 6 of General Clauses Act by implication is inapplicable.

2. Western Shipbreaking Corporation did not acquire any vested right as by the time the foreign award was made new Act had come into force for enforcement of the foreign award. Reference was made to two English decisions in Abbot v. The Minister for Lands, 1985 AC 425 and Hamilton Gell v. White, 1922(2) KB 422.

13. In Hamilton Gell v. White, 1922(2) KB 422 (Court of Appeal) facts are plainly stated in the head note, which we quote :

The question was if the tenant had acquired any right for him to maintain the claim. For that purpose the court was considering the provisions of Section 38 of the English Interpretation Act, 1889, which provides : "Where this Act or any Act passed after the commencement of this Act repeals any other enactment, then, unless the contrary intention appears the repeal shall not....... affect any right, privilege, obligation or liability acquired, accrued, or incurred under any enactment so repealed".

Bankes LJ said :-

Scrutton LJ said :-

Atkin LJ said :-

3. There can be no accrued right to have a decree or an award enforced under a particular procedure that has been repealed by statute. Reference was made to decisions of this Court in Lalji Raja & Sons v. Firm Hansraj Nathuram, 1971(1) SCC 721, and of the House of Lords decision in the case of Kuwait Minister of Public Works v. Sir Frederick Snow and Partners, 1984(1) All England Reporter 733.

14. In Lalji Raja & Sons v. Firm Hansraj Nathuram, 1971(1) SCC 721 this Court relying on the decision of the House of Lords in Abbot v. Minister for Lands, 1895 Act 425 said that "the mere right, existing at the date of repealing statute, to take advantage of provisions of the statute repealed is not a "right accrued" within the meaning of the usual saving clause." Further relying on another decision in Hamilton Gell v. White, 1922(2) KB 422 the Court said that a provision to preserve the right accrued under a repealed Act "was not intended to preserve the abstract rights conferred by the repealed Act". "It only applies to specific rights given to an individual upon happening of one or the other of the events specified in statute."

15. In Kuwait Minister of Public Works v. Sir Frederick Snow and Partners, and others, 1984(1) All England Reporter 733. (House of Lords) there was a contract between the parties entered into sometime in 1958 relating to the construction of an international airport in Kuwait. Parties to the contract were the Government of the State of Kuwait and an English firm of civil engineering consultants (English firm). Disputes having arisen award was given by Kuwaiti arbitrator on September 15, 1973. The award required payment by the English firm to the Government of the State of Kuwait an amount well over 3.5 million. Proceedings to enforce the award were initiated in England on March 23, 1979. In 1975 an Act with the title "An Act to give effect to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards" came into force. The award was a foreign award or a convention award. New York Convention came into being on June 10, 1958. United Kingdom became party to the Convention on December 23, 1975 and the 1975 Act was passed to give effect to the New York Convention. Kuwait became party to the Convention on July 27, 1978. On April 12, 1979 an Order in Council was made declaring Kuwait a party to the Convention. Now the award was made before Kuwait had become party to the Convention but when proceedings were initiated to enforce the award Kuwait had done so. It was contended by the English firm that the foreign arbitral award could only qualify as a Convention award for the purpose of 1975 Act if the State in which it was made was already a party to the Convention at the date of the award. Accordingly it was contended that the award was not a convention award and could not be enforced by the State of Kuwait against the English firm. The plea of the English firm was negatived. It was held that the award was maintainable if the State in which the award was made is a party to the convention at the date when proceedings to enforce the award began, even if it was not a party at the date when the award was made. The Court considered in all Section 3 of the 1975 Act which provided : "An award made in pursuance to an arbitration agreement in the territory of a State, other than the United Kingdom, which is a party to the New York Convention shall, subject to the following provisions of this Act, be enforceable. --". The court said that the use of the present tense in the word 'is' in the phrase 'which is a party to the New York Convention' must, as a matter of the ordinary and natural interpretation of the words used, mean that the phrase relates to the time of enforcement and not to any other time. In particular, if it had been the intention of the Legislature that the phrase should relate to the date of the award, then the draftsman would surely have used the words which made that intention clear such as 'which is and was at the date of the award a party to the New York Convention'. The court repelling the argument of the English firm observed as under :-

16. In Navin Chemicals Mfg. & Trading Co. Ltd.'s case (supra) this Court was considering the expression "the determination of any question having a relation to the rate of duty of customs or to the value of the goods for purposes of assessment" appearing in Section 129C of the Customs Act, 1962, Section 129C of the Customs Act, 1962, in relevant part, is as under :-

This Court held that the appeal could have been heard and decided by a member of the Appellate Tribunal, sitting singly. It said that the phrase "relation to" is, ordinarily, of wide import but, in the context of its use in the said expression in Section 129-C, it must be read as meaning a direct and proximate relationship to the rate of duty and to the value of goods for the purposes of assessment.

Mr. Dipankar Gupta, senior advocate, appearing for the SAIL (in CA No. 6036/98) made his submissions which we record in brief :-

17. M/s. Doypack Systems Pvt. Ltd. v. Union of India & Ors, 1988(2) SCC 299 this Court was considering the expression "in relation to". In the context it will be appropriate to quote paras 48, 49 and 50 of the judgment, which are as under :-

In Mansukhlal Dhanraj Jain and others v. Eknath Vithal Ogale, 1995(2) SCC 665 this Court was considering Section 41(1) of the Presidency Small Cause Courts Act, 1882 and the scope of the expression "relating to the recovery of possession of any immovable property" appearing in that Section. Section 41(1) is as under :

It also referred to its earlier decision in M/s. Doypack Systems Pvt. Ltd. v. Union of India and others, 1988(2) SCC 299. This Court held :

From M/s. Dhanrajamal Gobindram's case, 1961(3) SCR 1020 we quote the following passage :

5. Distinction sought of the repealing provisions as contained in Section 48 of the old Act and Section 85 of the new Act is not correct. Under Section 48 of the old Act, concept is of "reference" while under the new Act it is "commencement". Section 2(e) of the old Act defines "reference". Earlier under Section 48, the word used was "to" but now under Section 85(2)(a), it is the expression "in relation to". There would certainly serious anomalies arise if the expression "in relation to" is given restricted meaning.

6. It is not necessary that for the right to accrue, legal proceedings must be pending when the new Act comes into force. As to what the accrued right is, reference was made to two decisions of this Court in Commissioner of Income Tax, U.P. v. M/s. Shah Sadiq and Sons, 1987(3) SCC 516 and Bansidhar & Ors. v. State of Rajathan & Ors., 1989(2) SCC 557.

18. In Commissioner of Income Tax, U.P. v. M/s. Shah Sadiq and Sons, 1987(3) SCC 516 this Court was considering Section 6 of General Clauses Act, 1897 with reference to the Income-Tax Act, 1922 repealed by Section 297 of the Income- Tax Act, 1961. This is how this Court dealt with the question raised before it :-

In Bansidhar and others v. State of Rajasthan and others, 1989(2) SCC 557 this Court referred to the observations made in I.T. Commissioner v. Shah Sadiq and Sons, 1987(3) SCC 516 and said a saving provision in a repealing statute is not necessarily exhaustive of the rights and obligations so saved or the rights that survive the repeal. The Court said that for the purpose of Clauses (c) and (e) of Section 6 of the Rajasthan General Clasues Act, 1955 which provided, respectively, that the repeal of an enactment shall not, unless a different intention appears, "affect any right, privilege, obligation or liability, acquired, accrued or incurred under any enactment so repealed" or "affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, fine, penalty, forfeiture or punishment as aforesaid", the "right" must be "accrued" and not merely an inchoate one. Distinction between what is and what is not a right preserved by Section 6 of the General Clauses Act is often one of great fineness. What is unaffected by the repeal is a right 'acquired' or 'accrued' under the repealed statute and not " a mere hope or expectation" of acquiring a right or liberty to apply for a right. This Court relied on its earlier decision in Lalji Raja & Sons v. Firm Hansraj Nathuram, 1971(1) SCC 721. It also referred to observations of Lord Morris in Director of Public Works v. Ho Po Sang, 1961(2) All England Reporter 721, which had been quoted with approval in an earlier decision of this Court in M.S. Shivananda v. K.S.R.T.C., 1980(1) SCC 149, as under :-

Mr. R.P. Bhatt, senior advocate appearing for Western Shipbreaking Corporation (CA 4928/97) submitted that it would be the Foreign Awards Act that would apply and not the new Act. Mr. Bhatt supported Mr. Dipankar Gupta in this submissions. All the three Acts are saved by Section 85(2)(a). Arbitral proceedings include enforcement of award otherwise these Acts would become redundant. He said that the arbitration proceedings were governed by the laws in the U.K. under the (UK) Arbitration Act, 1950. Proceedings began on May 15, 1995. Awards was given in England on February 25, 1996 after the new Act had come into force on January 25, 1996. As to when arbitration proceedings commence have been given in Section 21 of the new Act. Under Section 32 of the new Act, arbitral proceedings terminate by the final award. Since the proceedings had already commenced in England, Section 21 of the new Act has no application. Therefore, one has to look into the Foreign Awards Act, 1961. Mr. Bhatt said pronouncement of an Arbitration Award after the cut off date is not a condition precedent for applicability of saving clause under Section 85(2)(a). It does not use the words "Arbitral Award passed before" in place of "Arbitral Proceedings which commenced before". Thus what is saved is applicability of all the provisions of the old Acts where the Arbitral proceedings have commenced before the cut off date and it is further clarified in second portion of the saving clause viz., section 85(2)(a) of the new Act that the new Act will apply where the Arbitral proceedings have commenced after the cut off date.

19. Mr. A.K. Ganguli, senior Advocate, appeared for Himachal Pradesh State Electricity Board (CA 61/99). He supported the impugned judgment of the High Court. He drew distinction between the various provisions of the old Act and the new Act and said that the enforcement of the award under the new Act would not be compatible with the arbitration proceedings held under the old Act resulting in the award. Any restricted interpretation to the expression "arbitral proceedings" appearing in Section 85(2)(a) would lead to several anomalies. One such instance was that under the old Act arbitrator would not be required to give reason unless the arbitration agreement so provided. He said when the savings clause makes the provisions of the old Act applicable to arbitral proceedings commencing before January 25, 1996 without there being any further condition, the legislative intent was clear that the old Act would apply to the enforcement of the award under that Act. He said such interpretation, apart from being in conformity with the legislative intent, would also be in consonance, with justice, equity and fair play. Expression "arbitral proceedings" in Section 85(2)(a) could not be given restricted meaning of being confined merely to the conduct of the proceedings by the arbitrator and excluding the enforcement of the award from the purview of the old Act. Mr. Ganguli said that it was not disputed that provisions of the new Act were vastly different than that of the old Act. He said use of the expression "provisions" in Section 85(2)(a) would include all provisions of the old Act, in so far as they have a nexus with the arbitral award. Enforcement of the award is integral part of the process "in relation to arbitral proceedings". Reference was also made to the meaning of expression "in relation to" and to various decisions of this Court in that connection. Provisions of Section 6 of General Clauses Act were also invoked to contend that provisions of the old Act were saved which included provisions for enforcement of the award under the old Act. Lastly, Mr. Ganguli submitted that the agreement contemplated in the later part of Section 85(2)(a) would be entered into only after the enforcement of the new Act and that is January 25, 1996. Any agreement if entered into before this date would be void and would be hit by Section 28 of the Contract Act and as rightly held so by the High Court. Accordingly, Mr. Ganguli said that the clause in the arbitration agreement where the parties agreed that provisions of the old Act or any statutory modification or re-enactment thereof "for the time being in force" would have no meaning insofar as applicability of new Act to the enforcement of the award is concerned. Parties could not agree to a provision in advance without knowing what that provisions would be.

20. Reference may yet be made to two more decisions of this Court on the question of effect of repeal of an enactment and as to what is right accrued. In Gajraj Singh and others v. State Transport Appellate Tribunal and others, 1997(1) SCC 650 : 1997(1) RCR (Civil) 244 (SC) this Court was examining the provisions of Section 217(1) and (2) (a) & (b) and (4) of the Motor Vehicles Act, 1988, which contained repeal and saving provisions of the Motor Vehicle Act, 1939. The Court examined various judgments of this Court and Treatises on the rules of interpretation and said :-

On the question on the right acquired or accrued the Court observed :-

21. In G. Ekambarappa & Ors. v. Excess Profits Tax Officer, Bellary, 1967(3) SCR 864. In that case district Bellary, which belonged to Part 'A' State of Madras in British India, was merged in Part B' State of Mysore on October 1, 1953. The Excess Profits Act, 1940 applied only to British India. It ceased to apply to the Bellary after it became part of the State of Mysore. Then, after States Reorganisation Act, 1956, Mysore also became Part 'A' State. However, by the Adaptation of Laws (No. 3) Order dated December 31, 1956, the Excess Profits Tax Act was to extend "to the whole of India except the territories which immediately before November 1, 1956 were comprised in Part 'B' States". The result of adaptation was that all the provisions of the Excess Profits Tax Act, 1940 stood repealed so far as the district of Bellary was concerned w.e.f. December 21, 1956. Excess Profits Tax Officer issued a Notice under Section 15 of the Excess Profits Tax Act to the appellants in 1960 in respect of the period from October 30, 1943 to October 30, 1944. It was contended by them that it was not a case of repeal of that Act and so the provisions of Section 6 of the General Clauses Act could not be invoked to sustain the validity of the notices. It was argued that so far as the Excess Profits Tax Act was concerned, the Adaptation Laws Order 1956 did not repeal that Act as such and the effect of the modification was that the provisions of the Act were no longer applicable to the Bellary district which comprised in the territory of Part 'B' State of Mysore immediately before November 1, 1956. This Court said that there was no justification for the argument put forward on behalf of the appellants. The Court proceeded to repeal this argument as under :

The Conclusions :

22. For the reason to follow, we hold :

Section 85(2)(a of the new Act is in two limbs : (1) Provisions of the old Act shall apply in relation to arbitral proceedings which commenced before the new Act came into force unless otherwise agreed by the parties and (2) new Act shall apply in relation to arbitral proceedings which commenced on or after the new Act came into force. First limb can further be bifurcated into two : (a) Provisions of old Act shall apply in relation to aribitral proceedings commenced before the new Act came into force and (b) old Act will not apply in such cases where the parties agree that it will not apply in relation to arbitral proceedings which commenced before the new Act came into force. The expression "in relation to" is of widest import as held by various decisions of this Court in M/s. Doypack Systems Pvt. Ltd., 1988(2) SCC 299, Mansukhlal Dhanraj Jain & Ors., 1995(2) SCC 660, M/s. Dhanrajamal Gobindram, 1961(3) SCR 1020 and Naveen Chemicals Mfg. & Ors., 1993(4) SCC 320. This expression "in relation to" has to be given full effect to, particularly when read in conjunction with the word "the provisions" of the old Act. That would mean that the old Act will apply to whole gambit of arbitration culminating in the enforcement of the award. If it was not so, only the word "to" could have sufficed and when the legislature has used the expression "in relation to", a proper meaning has to be given. This expression does not admit of restrictive meaning. First limb of Section 85(2)(a) is not a limited saving clause. It saves not only the proceedings pending at the time of commencement of the new Act but also the provisions of the old Act for enforcement of the award under that Act.

23. The contention that if it is accepted that the expression "in relation to" arbitral proceedings would include proceedings for the enforcement of the award as well, the second limb of Section 85(2)(a) would become superfluous. We do not think that would be so. The second limb also takes into account the arbitration agreement entered into under the old Act when the arbitral proceedings commenced after the coming into force of the new Act. Reference in this connection be made to a decision of this Court in MMTC Ltd. v. Sterlite Industries (India) Ltd., 1996(6) SCC 716 : 1997(1) RCR (Civil) 686 (SC), where this Court held that validity of an arbitration agreement did not depend on the number of arbitrators specified in Section 7 of the new Act and that the number of arbitrators is dealt with separately under Section 10 of that Act which is a part of machinery provision for working of the arbitration agreement. In this case the question which came up for decision was the effect of the new Act on the arbitration agreement made prior to the commencement of the new Act which provided for appointment of one arbitrator by each of the parties who shall appoint an umpire before proceeding with the reference. The agreement was entered into on December 14, 1993 before the coming into force of the new Act. Section 10 of the new Act provides that parties are free to determine the number of arbitrators, provided that such number shall not be an even number. Further failing the determination of odd number of arbitrators, the arbitral tribunal shall consist of a sole arbitrator. This Court upheld the validity of the arbitration agreement dated December 14, 1993 and directed the Chief Justice of the High Court concerned to appoint the third arbitrator under Section 11(4)(b) of the new Act in view of the failure of the two appointed arbitrators to appoint the third arbitrator. In this case it may be noticed that the respondent had invoked arbitration clause in the agreement by letter dated January 19, 1996 which was received by the appellant on January 31, 1996. The arbitral proceedings would, therefore, commence under Section 21 of the new Act on January 31, 1996 as by that time new Act had come into force.

24. In this view of the matter, Section 6 of the General Clauses Act would be inapplicable. It is, therefore, not necessary for us to examine if any right to enforce the award under the old Act accrued to a party when arbitral proceedings had commenced before the coming into force of the new Act and the SAIL (CA 6036/98) had acquired a right to challenge the award made under the old Act and there would be corresponding right with the Thyssen to enforce the award under the old Act.

25. Present day the courts tend to adopt purposive approach while interpreting the statute which repeals the old law and for that purpose to take into account the objects and reasons which led to the enacting of the new Act. We have seen above this approach was adopted by this Court in MMTC Ltd.'s case, 1996(6) SCC 716. Provisions of both the Acts, old and new, are very different and it has been so observed in Sundaram Finance Ltd.'s case 1999(2) SCC 479. In that case, this Court also said that provisions of the new Act have to be interpreted and construed independently and that in fact reference to old Act may actually lead to the misconstruction of the provisions of the new Act. The Court said that it will be more relevant, while construing the provisions of the new Act, to refer to the UNCITRAL Model Law rather than the old Act. In the case of Kuwait Minister of Public Works v. Sir Frederick Snow and Partners, 1984(1) All England Reporter 733 HL, the award was given before Kuwait became party to the New York Convention recognised by Order in Council in England. House of Lords held that though a foreign award could be enforced in England under the (U.K.) Arbitration Act, 1975 as when the proceedings for enforcement of the award were initiated in England Kuwait had become party to the Convention. It negatived the contention that on the date the award was given Kuwait was not party to the New York Convention.

26. In Pepper v. Hart, 1993(1) All. E.R. 42 House of Lords for the first time accepted the principle that Judge could refer to the Parliamentary debates in order to ascertain the meaning of an Act of Parliament. Lord Griffiths said (at page 50) :

But then if the construction of the new Act leads to inconvenient and unjust results, the concept of purposive approach has to be shed. Multiple and complex problems would arise if the award given under the old Act is said to be enforced under the new Act. Both the Acts are vastly different to each other. It has been rightly contended that when arbitration proceedings are held under the old Act, the parties and the arbitrator keep in view the provisions of that Act for the enforcement of the award. As noted above, under the old Act, there is no requirement for the arbitrator to give reasons for the award. That is not mandatory under the new Act. Section 27 of the old Act provides that arbitrator or umpire may, if they think fit, make an interim award, unless of course different intention appears from the arbitration agreement. Interim award is also an award and can be enforced in the same way as the final award. It would certainly be a paradoxical situation if for the interim award, though given after the coming into force of the new Act, it would still be the old Act which would apply and for the final award, it would be the new Act. Yet another instance would be when under Section 13 of the old Act, the arbitrators or umpire have power to state a special case for the opinion of the Court on any question of law involved in the proceedings. Under sub-section (3) of Section 14 of the old Act when the Court pronounces its opinion thereon such opinion shall be added to and shall form part of the award. From this part of the award no appeal is maintainable under Section 39 of the old Act. There is no such provision under the new Act., In Sohan Lal & Ors. v. Amin Chand and Sons & Ors., 1974(1) SCR 453. This Court was considering the powers of arbitrator under Section 13 of the old Act. Clause (b) of Section 13 provided that arbitrators or umpire shall have power to state a special case for the opinion of the court on any question of law involved, or state the award, wholly or in part, in the form of a special case of such question for the opinion of the court. Section 14 of the old Act provides for the award to be signed and filed. Under sub-section (3) of Section 14 where the arbitrators or umpire state a special case under clause (b) of Section 13, the court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award. This Court said :

Section 85(2)(a) is the saving clause. It exempts the old Act from complete obliteration so far as pending arbitration proceedings are concerned. That would include saving of whole of the old Act uptill the time of the enforcement of the award. The Section 85(2)(a) prevents the accrued right under the old Act from being affected. Saving provision preserves the existing right accrued under the old Act. There is a presumption that Legislature does not intend to limit or take away vested rights unless the language clearly points to the contrary. It is correct that the new Act is a remedial statute and, therefore, Section 85(2)(a) calls for strict construction, it being a repealing provision. But then as stated above where one interpretation would produce an unjust or an inconvenient result and another would not have those effects, there is then also a presumption in favour of the latter.

27. Enforcement of the award, therefore, has to be examined on the touchstone of the proceedings held under the old Act.

28. Various decisions have been cited before us to show as to what is a mere right and what is right accrued or acquired. We have to examine this question with reference to the provisions of Section 6 of the General Clauses Act if it could be said that when the arbitral proceedings have commenced under the old Act, a party has acquired a right to have the award given thereafter enforced under the old Act. The question that arises for consideration is if a right has accrued to the party or it is merely an inchoate right. The three cases referred to, namely, Abbott v. The Minister for Lands, 1895 AC 425 (PC), Hungerford Investment Trust Limited v. Haridas Mundhra and others, 1972(3) SCR 690, D.C. Bhatia and others v. Union of India and another, 1995(1) SCC 104, show that something more is required for vested right to accrue. Right did exist but then nothing was done to show that any act was done or advantage taken of the enactment under which the right existed till it was repealed. An Act gave the right and the new Act which repealed the old Act took away that right. Mere right to take advantage of the provision of an Act is not a right accrued.

29. In I.T. Commissioner v. Shah Sadiq and Sons, 1987(3) SCC 516, this Court said that right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly or by necessary implication. In the case of Bansidhar and others v. State of Rajasthan and others, 1989(2) SCC 557, this Court had said that what is unaffected by the repeal is a right "acquired" or "accrued" under the repealed statute and not "a mere hope or expectation" of acquiring a right or liberty to apply for a right. In the case of Lalji Raja & Sons v. Firm Hansraj Nathuram, 1971(1) SCC 721, this Court had said that "a provision to preserve the right accrued under a repealed Act "was not intended to preserve the abstract rights conferred by the repealed Act. It only applies to specific rights given to an individual upon happening of one or the other of the events specified in statute." We think the observations of Lord Morris in Director of Public Works v. Ho Po Sang, 1961(2) All England Reporter 721, are quite apt which have been quoted elsewhere in the judgment. In M.S. Shivananda v. K.S.R.T.C., 1980(1) SCC 149, this Court again said that if the right created by the statute is of an enduring character and has vested in the person, the right cannot be taken away because the statute by which it was created has expired. In Hamilton Gell v. White, 1922(2) KB 422 Court of Appeal referred to the decision of the House of Lords in Abbott v. The Minister for Lands, 1895 AC 425. In the case before it, the Court said that under the old Act (the Agricultural Holdings Act, 1908) which was repealed by the Agricultural Holdings Act, 1914 necessary event had happened under which the tenant "acquired a right" which would accrue when he was quitting his holding to receive compensation from the landlord. The event which occurred was the notice by the landlord to quit to the tenant in view of a sale of the holding. While Section 11 of the 1908 Act treated this as unreasonable disturbance to the tenant entitling him to compensation, the latter Act of 1914 repealed Section 11. The Court held that in spite of the repeal of Section 11 tenant had acquired right to claim compensation inasmuch as notice to quit was given to him when Section 11 of the old Act was in operation. In Gajraj Singh and others v. State Transport Appellate Tribunal and others, 1997(1) SCC 650, this Court said that some positive act is required to be done for the right to accrue under enactment which is repealed. In this case reference was made to a decision of this Court in Gujarat Electricity Board v. Shantilal R. Desai, AIR 1969 Supreme Court 239 : 1969(1) SCR 580 where the Court had pointed out that before Section 71 of the Electricity (Supply) Act, 1948 was amended, the appellant had issued a notice under Section 7 thereof, exercising the option to purchase the undertaking. It was held that a right to purchase the electrical undertaking, which had accrued to the Electricity Board, was saved by Section 6 of the General Clauses Act. In the case of G. Ekambarappa & Ors. v. Excess Profits Tax Officer, Bellary, 1967(3) SCR 864, there was repeal of an enactment levying tax. No assessment had been made by the time the Act was repealed and there could, therefore, be no liability. Nevertheless, this Court said that liability to tax arose immediately at the end of the accounting period when the Act was in force though the liability had not been quantified by assessment proceedings. The Court upheld validity of the notice for assessment of proceedings after the repeal of the Act.

30. Principles enunciated in the judgments show as to when a right accrues to a party under the repealed Act. It is not necessary that for the right to accrue that legal proceedings must be pending when the new Act comes into force. To have the award enforced when arbitral proceedings commenced under the old Act under that very Act is certainly an accrued right. Consequences for the parties against whom award is given after arbitral proceedings have been held under the old Act though given after the coming into force of the new Act, would be quite grave if it is debarred from challenging the award under the provisions of the old Act. Structure of both the Acts is different. When arbitral proceedings commenced under the old Act it would be in the mind of everybody, i.e., arbitrators and the parties that the award given should not fall foul of Sections 30 and 32 of the old Act. Nobody at that time could have thought that Section 30 of the old Act could be substituted by Section 34 of the new Act. As a matter of fact appellant Thyssen in Civil Appeal No. 6036/98 itself understood that the old Act would apply when it approached the High Court under Sections 14 and 17 of the old Act for making the award rule of the Court. It was only later on that it changed the stand and now took the position that new Act would apply and for that purpose filed an application for execution of the award. By that time limitation to set aside the award under the new Act had elapsed. Appellant itself led the respondent SAIL in believing that the old Act would apply. SAIL had filed objections to the award under Section 30 of the old Act after notice for filing of the award was received by it on the application filed by the Thyssen under Sections 14 and 17 of the old Act. We have been informed that numerous such matters are pending all over the country where the award in similar circumstances is sought to be enforced or set aside under the provisions of the old Act. We, therefore, cannot adopt a construction which would lead to such anomalous situations where the party seeking to have the award set aside finds himself without any remedy. We are, therefore, of the opinion that it would be the provisions of the old Act that would apply to the enforcement of the award in the case of Civil Appeal No. 6036 of 1998. Any other construction on the Section 85(2)(a) would only lead to the confusion and hardship. This construction put by us is consistent with the wording of Section 85(2)(a) using the terms "provision" and "in relation to arbitral proceedings" which would mean that once the arbitral proceedings commenced under the old Act it would be the old Act which would apply for enforcing the award as well.

31. Because of the view of Section 85(2)(a) of the new Act which we have taken, it is not necessary for us to consider difference in the repealing provisions as contained in Section 48 of the old Act and Section 85 of the new Act. We may, however, note that under Section 48 of the old Act concept is of "reference" while under the new Act it is "commencement". Section 2(e) of the old Act defines "reference". Then under Section 48 the word used is "to", and under Section 85(2)(a) the expression is "in relation to". It, therefore, also appears that it is not quite relevant to consider the provision of Section 48 of the old Act to interpret Section 85(2)(a).

32. In Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh and others, 1953 SCR 987, this Court said that pre-existing right of appeal is not destroyed by the amendment if the amendment is not retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. In this case, law had changed and the appellate authority could exercise jurisdiction only if the appeal was accompanied by the deposit of the assessed tax when before the amendment of the provision it only provided for deposit of admitted tax. The Court said that any requirement for deposit of the assessed tax overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right where appeal could be filed only on depositing the admitted amount of tax. The law interpreted by this Court in this judgment, it seems, is to what Civil Procedure Code (Amendment) Act provided by cause (m) of Section 97 of the Civil Procedure Code (Amendment) Act.

33. Parties can agree to the applicability of the new Act even before the new Act comes into force and when the old Act is still holding the field. There is nothing in the language of Section 85(2)(a) which bars the parties from so agreeing. There is, however, a bar that they cannot agree to the applicability of the old Act after the new Act has come into force when arbitral proceedings under the old Act have not commenced though the arbital agreement was under the old Act. Arbitration clause in the contract in the case of Rani Constructions (Civil Appeal 61 of 1999) uses the expression "for the time being in force" meaning thereby that provision of that Act would apply to the arbitration proceedings which will be in force at the relevant time when arbitration proceedings are held. We have been referred to two decisions - one of Bombay High Court and the other of Madhya Pradesh High Court - on the interpretation of the expression "for the time being in force" and we agree with them that the expression aforementioned not only refers to the law in force at the time the arbitration agreement was entered into but also to any law that may be in force for the conduct of arbitration proceedings, which would also include the enforcement of the award as well. Expression "unless otherwise agreed" as appearing in Section 85(2)(a) of the new Act would clearly apply in the case of Rani Construction in Civil Appeal No. 61 of 1999. Parties were clear in their minds that it would the old Act or any statutory modification or re-enactment of that Act which would govern the arbitration. We accept the submission of the appellant Rani Construction that parties could anticipate that the new enactment may come into operation at the time the disputes arise. We have seen Section 28 of the Contract Act. It is difficult for us to comprehend that arbitration agreement could be said to be in restraint of legal proceedings. There is no substance in the submission of respondent that parties could not have agreed to the application of the new Act till they knew the provisions thereof and that would mean that any such agreement as mentioned in the arbitration clause could be entered into only after the new Act had come into force. When the agreement uses the expressions "unless otherwise agreed" and "law in force" it does give option to the parties to agree that new Act would apply to the pending arbitration proceedings. That agreement can be entered into even before the new Act comes into force and it cannot be said that agreement has to be entered into only after coming into force of the new Act.

34. Mr. Desai had referred to a decision of the Bombay High Court (Goa Bench), rendered by single Judge in Reshma Constructions v. State of Goa, 1999(1) MLJ 462. In that case arbitration clause in the contract provided as under :-

The Court held that these terms in the clause disclosed that the parties had agreed to be governed by the law which was in force at the time of execution of the arbitration agreement as well as by any further statutory changes that may be brought about in such law. This is how the High Court considered the issue before it :-

We agree with the High Court on interpretation put to the arbitration clause in the contract.

35. Section 28 of the Contract Act contains provision regarding agreements in the restraint of legal proceedings. Exception 1 to Section 28 of the Contract Act does not render illegal a contract by which the parties agree that any future dispute shall be referred to arbitration. That being so parties can also agree that the provisions of the arbitration law existing at that time would apply to the arbitral proceedings. It is not necessary for the parties to know what law will be in force at the time of the conduct of arbitration proceedings. They can always agree that provisions that are in force at the relevant time would apply. In this view of the matter, if the parties have agreed that at the relevant time provisions of law as existing at that time would apply, there cannot be any objection to that. Thus construing the clause 25, in Rani Constructions (CA 61/99) new Act will apply.

36. Foreign Awards Act gives the party right to enforce the foreign award under that Act. But before that right is exercised Foreign Awards Act has been repealed. It cannot, therefore, be said that any right had accrued to the party for him to claim to enforce the foreign award under the Foreign Awards Act. After the repeal of the Foreign Awards Act a foreign award can now be enforced under the new Act on the basis of the provisions contained in Part II of the new Act depending whether it is a New York Convention Award or Geneva Convention Award. It is irrespective of the fact when the arbitral proceedings commenced in a foreign jurisdiction. Since no right has accrued Section 6 of the General Clauses Act would not apply.

37. In the very nature of the provisions of Foreign Awards Act it is not possible to agree to the submissions that Section 85(2)(a) of the new Act would keep that Act alive for the purpose of enforcement of a foreign award given after the date of commencement of the new Act though arbitral proceedings in foreign land had commenced prior to that. It is correct that Section 85(2)(a) uses the words "the said enactments" which would include all the three Acts, i.e., the old Act, Foreign Awards Act and the Arbitration (Protocol and Convention) Act, 1937. Foreign Awards Act and even the 1937 Act contain provisions only for the enforcement of the foreign award and not for the arbitral proceedings. Arbitral proceedings and enforcement of the award are two separate stages in the whole process of arbitration. When the Foreign Awards Act does not contain any provision for arbitral proceedings it is difficult to agree to the argument that in spite of that the applicability of the Foreign Awards Act is saved by virtue of Section 85(2)(a). As a matter of fact if we examine the provisions of Foreign Awards Act and the new Act there is not much difference for the enforcement of the foreign award. Under the Foreign Awards Act when the court is satisfied that the foreign award is enforceable under that Act the court shall order the award to be filed and shall proceed to pronounce judgment accordingly and upon the judgment so pronounced a decree shall follow. Sections 7 and 8 of the Foreign Awards Act respectively prescribe the conditions for enforcement of a foreign award and the evidence to be produced by the party applying for its enforcement. Definition of foreign award is same in both the enactments. Sections 48 and 47 of the new Act correspond to Sections 7 and 8 respectively of the Foreign Awards Act. While Section 49 of the new Act states that where the court is satisfied that the foreign award is enforceable under this Chapter (Chapter I, Part II, relating to New York Convention Awards) the award is deemed to be decree of that court. The only difference, therefore, appears to be that while under the Foreign Awards Act a decree follows, under the new Act foreign award is already stamped as the decree. Thus if provisions of the Foreign Awards Act and the new Act relating to enforcement of the foreign award are juxtaposed there would appear to be hardly any difference.

38. Again a bare reading of the Foreign Awards Act and the Arbitration (Protocol and Convention) Act, 1937 would show that these two enactments are concerned only with recognition and enforcement of the foreign awards and do not contain provisions for the conduct of arbitral proceedings which would, of necessity, have taken place in a foreign country. The provisions of Section 85(2)(a) in so far these apply to the Foreign Awards Act and 1937 Act, would appear to be quite superfluous. Literal interpretation would render Section 85(2)(a) unworkable. Section 85(2)(a) provides for a dividing line dependent on "commencement of arbitral proceedings" which expression would necessarily refer to Section 21 [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."] of the new Act. This Court has relied on this Section as to when arbitral proceedings commence in the case of Shetty's Construction Co. P. Ltd. v. Konkan Railway Construction, 1999(4) RCR (Civil) 447 : 1998(5) SCC 599. Section 2(2) [2(2) This Part shall apply where the place of arbitration is in India.] read with Section 2(7) [2(7) An arbitral award made under this Part shall be considered as a domestic award.] and Section 21 falling in Part-I of the new Act make it clear that these provisions would apply when the place of arbitration is in India, i.e., only in domestic proceedings. There is no corresponding provision anywhere in the new Act with reference to foreign arbitral proceedings to hold as to what is to be treated as "date of commencement" in those foreing proceedings. We would, therefore, hold that on proper construction of Section 85(2)(a) the provision of this sub-section must be confined to the old Act only. Once having held so it could be said that Section 6 of the General Clauses Act would come into play and foreign award would be enforced under the Foreign Awards Act. But then it is quite apparent that a different intention does appear that there is no right that could be said to have been acquired by a party when arbitral proceedings are held in a place resulting in a foreign award to have that award enforced under the Foreign Awards Act.

39. We, therefore, hold that the award given on September 24, 1997 in the case of Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., Civil Appeal No. 6036 of 1998, when the arbitral proceedings commenced before the Arbitration and Conciliation Act, 1996 came into force on January 25, 1996, would be enforced under the provisions of Arbitration Act, 1940. We also hold that clause 25 containing the arbitration agreement in the case of M/s. Rani Constructions Pvt. Ltd v. Himachal Pradesh State Electricity Board, Civil Appeal No. 61 of 1999 does admit of interpretation that the case is governed by the provisions of the Arbitration and Conciliation Act, 1996. We further hold that the foreign award given in the case of Western Shipbreaking Corporation v. M/s. Clareheaven Ltd., Civil Appeal No. 4928 of 1997 would be governed by the provisions of the Arbitration and Conciliation Act, 1996. Thus we affirm the decisions of the Delhi High Court in Execution Petition No. 47 of 1998 and of the Gujarat High Court in Civil Revision Application No. 99 of 1997, and set aside that of Himachal Pradesh High Court in Civil Suit No. 52 of 1996.

Accordingly Civil Appeal Nos. 6036 of 1998 and 4928 of 1997 are dismissed, while Civil Appeal No. 61 of 1999 is allowed. Parties shall bear their own costs.

Appeal dismissed.