EMDEN’S BUILDING CONTRACTS AND PRACTICE

1. Arbitration as a disagreement Resolution medium has evolved through time ever since its commencement in 1940. The current legislation, the LAW OF CONTRACT LATEST EDITION, and Conciliation Act, 1996, too purports to make arbitration an effective and meaningful disagreement resolution medium. The nature of arbitration proceedings is similar as to give for indispensable disagreement redressal system whereby parties to the disagreement concurrence to resolution through an acclimatised procedure that suits the parties. The ultimate fruit of the tree is an award enforceable in favour

2. of one of the parties. The arbitral bench, just like any other quasi-judicial body, has powers and functions like that of a court. This includes the powers of the judges to consider procedural laws like Code of Civil Procedure( CPC, for short) or indeed occasionally go further. similar is the authority and discretion of an Adjudicator. lately the Hon’ble Supreme Court dealt with a proposition importing the graveness of operation of CPC, its enforcement terms and Section 36 of the Act, in the case of Pam Developments PrivateLtd.vs. State of West Bengal, wherein it held that no special or exceptional treatment should be given to the Government as a party in granting stay of the arbitration award during the course of theproceedings.In fact, allowing the same would master the veritably purpose of quick resolution through LAW OF PARTNERSHIP, as the decree- holder would be deprived of the fruits of the award on the bare form of expostulation under Section 34 of the 1996 Act. Data OF THE CASE

3. Pam Developments PrivateLtd.( complainant) and the State of West Bengal( replier) entered into an agreement for a special form programme for different stretches of National Highways in the quarter of Hooghly. controversies arose between the parties. On the failure of the employer to appoint an adjudicator, the High Court appointed an adjudicator. The adjudicator, after adjudication, made an award in favour of the complainant. Placing reliance on the judgement in the case of the Board of Council for Cricket in India. Kochi Cricket Private Limited, wherein it was held that the amended vittles of Section 36 of the Top Arbitration Lawyers and Conciliation Act, 1996 would also apply to the pending proceedings under Section 34 of the Act, the complainant filed an prosecution operation before the Calcutta High Court. The reporter sought time to file an operation for the award. The stay operation was, still, dismissed and the Executing Court attached the quantum lying to the credit of the replier, with the Reserve Bank of India. The replier filed a fresh operation for stay of award, which was allowed by way of an unconditional stay under Order XXVII, Rule 8A of CPC. The said stay was a subject matter of the appeal before the Apex Court. ISSUES BEFORE THE COURT The SupremeCourt was called upon to adjudicate on the connection of Order XXVII, Rule 8A of CPC while ordering an unconditional stay of an arbitral award against the Government. The Supreme Court also considered whether the Executing Court could pass an order of unconditional stay of an arbitral award against the Government solely counting upon the vittles of CPC. cessions ON BEHALF OF COUNSEL

4. The main contention of the complainant was that bare operation of stay filed under Section 34, doesn't by itself render an arbitral award unenforceable, unless the court passes an order of stay of operation thereof under Section 36( 3) of the 1996 Act. The complainant laid emphasis on the expression “ have due regard to ” used in the contingency to Section 36( 3) and stated that the said expression would mean that the Court has to take into consideration the vittles of CPC as guiding principles and that the same would not be obligatory in nature. Further placing reliance on the 246th Report of the Law Commission and Section 18 of the 1996 Act, which calls for equal treatment of the parties to the arbitration proceedings, the complainant contended that it also included the Government. The complainant further submitted that indeed if the vittles of Order XXVII, Rule 8A of CPC were to be considered, an order of unconditional stay of arbitral awards against the Government, solely counting upon the vittles of CPC, was untenable and the court should have directed the Government to deposit the awarded quantum, as the said rule only exempted the Government from furnishing security quantum

5. and not deposit of the awarded quantum. Grounded on the same, it was contended that Order XXVII, Rule 8A of CPC shouldn't be read into the 1996 Act as it would limit the effect of Section 36 thereof. Per contra, the reply gave a different interpretation to the vittles of Section 36( 3) of the 1996 Act. According to the reply, the use of the word “ shall ” in the contingency to Section 36( 3) of the Act made the vittles of CPC mandatorily applicable. It also stated that as per Order XLI, Rule 5( 5) of CPC, the Government was needed to make a deposit or furnish a security, failing which, stay would not be granted. But in view of Order XXVII, Rule 8A of CPC, the Government would be exempted from making similar payments. Therefore, the Government tried to shirk its liability to furnish any security or make any deposit in view of impunity under the forenamed provision. JUDGEMENT Setting away the judgement of the Calcutta High Court, which granted an unconditional stay of an arbitral award against the Government, theSupreme Court held( para 27, runner 9)

6. “ Once the Act authorises so, there can not be any special treatment given to the government as a party. As similar, under the scheme of the Arbitration Act, no distinction is made nor any discriminatory treatment is to be given to the government, while considering an operation for entitlement of stay of a plutocrat decree in proceedings under Section 34 of the Arbitration Act ” The Court observed that the term “ have due regard to ” in Section 36 is purely premonitory in nature. It means that the court can take the vittles of CPC into consideration, but its operation isn't obligatory. It has to be taken as a general guideline only and that, in itself, doesn't make the main vittles of the 1996 Act irrelevant. In the background to Section 36( 3) of the Act, the Supreme Court while considering the expression “ having regard to ” in the case of Shri Sitaram

7. Sugar Company Limitedvs. Union of India held that “ the words ‘ having regard to ’ in thissub-section are legislative instructions for the general guidance of the Government in determining the price of sugar. They aren't rigorously obligatory, but in substance directory. ” The Court laid emphasis on the base for correction of Section 36 of the 1996 Act. It noted that Section 36 was amended in 2015 on the basis of the 246th Law Commission Report which had categorically recommended that there should be no automatic stay of an best arbitration firmsaward and while recommending, it didn't make any exception for the Government. It further noted that Order XXVII, Rule 8A of CPC only provides an impunity from furnishing security. It doesn't circumscribe the Court from directing the Government to deposit the decretal quantum in the appeal against a plutocrat decree. Therefore, the Supreme Court overruled the judgement of the Calcutta High Court swinging special treatment to the Government and held that ordering an unconditional stay solely counting upon the vittles of CPC would be against the spirit of Section 36 of the Arbitration and Conciliation Act, 1996.NO SPECIAL TREATMENT TO GOVERNMENT