ROSE ADVERTISING Vs. DELHI TRANSPORT CORPORATION

JUDGEMENT

(1.) Whether the Arbitration Act, 1940 (Act No. 10 of 1940) or the Arbitration and Conciliation Act, 1996 (Act No.1 of 1996) would apply to enforce the award of the arbitrator is in this appeal.

(2.) Relevant facts are that on 15.1.1993 an agreement was entered into between the parties for display of advertisements on the body of D.T.C. Buses. Validity period of the agreement was from 15.1.1993 to 14.1.1996. Dispute appears to have arisen during continuance of the agreement. A request was made by the appellant on 9.1.1995 to settle the disputes or to get those settled by appointment of an arbitrator in terms of the agreement. No action appears to have been taken on such a request made by the appellant. Another letter dated 26.11.1995 was sent, inter alia, asking the respondent to either settle the disputes or to appoint an arbitrator in terms of arbitration clause. Since the request of the appellant was again not acceded to, on 16.1.1996 a petition under Section 20 of the Arbitration Act, 1940 was filed by the appellant. Notice of this petition was issued to the respondent and an interim order was also passed. Counsel for the respondent appeared on 19.7.1996 and stated that by communication dated 4.7.1996 an arbitrator had already been appointed in terms of the agreement. In view of this statement, the petition was rendered infructuous and was disposed of as such.

(3.) The Arbitrator entered into reference. Parties were called upon to file their respective claims and counter claims. The appellant filed its claim on 8.2.1997. The respondent filed its claim on 12.2.1997. On 6.10.1998 award was made and published by the arbitrator in order to have the award enforced, the appellant filed an application under the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act"). It was registered as Execution Application No. 637/99. The respondent put in appearance and raised a preliminary objection about maintainability of execution petition under the provisions of 1996 Act. It was stated that 1996 Act was not applicable to the arbitration proceedings rather provisions of the Arbitration Act, 1940 would apply in relation to the arbitration proceedings, which had commenced prior to 1996 Act coming into force. By the impugned order, learned Single Judge upheld the objection of the respondent holding that the Arbitration Act, 1940 would apply. The reason assigned for holding so is that the claimant/appellant had called upon the respondent on 9.11.1995 to appoint an arbitrator under Clause 25 of the Agreement. As such on a conjoint reading of Section 85 with Section 21 of the 1996 Act, the arbitration proceedings commenced on the date on which request for appointment of arbitrator was made, therefore, 1996 Act would apply on the ratio of the decision of Supreme Court in Thyssen Stahlunion GMBH Vs. Steel Authority of India Ltd., AIR 1999 S.C. 3923.