JAMES VARGHESE Vs. STATE OF KERALA

JUDGEMENT

(1.) These petitions are filed challenging the constitutional validity of the Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998, for short, "impugned Act", which is deemed to have come into force on 14.11.1997 as per Section 1(3) thereof and which, as per Section 1(4), applies to all agreements executed in terms of Local Competitive Bidding Specification, hereinafter referred to as "LCBS".

(2.) Section 3(1) of the impugned Act provides that notwithstanding anything contained in the Indian Contract Act, 1872 or in the Arbitration Act, 1940, for short, "1940 Act", or in the Arbitration and Conciliation Act, 1996, for short, "A & C Act" or in any other law for the time being in force or in any judgment, decree or order of any court or other authority or in any agreement or other instrument, the arbitration clauses in every agreement executed in terms of the LCBS for various works of the Government of Kerala shall stand cancelled. LCBS - "Local Competitive Bidding Specification" - means such specification adopted by the Government in G.O. (Ms).No.3/81/I & R dated 20.1.1981. Authority of an arbitrator appointed under any such agreement is revoked and the arbitration clause in such agreement shall cease to have effect in so far as it relates to the matters in dispute or difference referred, with effect on and from the date of commencement of the impugned Act.

(3.) Sub-Section 2 of Section 3 of the impugned Act provides that nothing in sub-section 1, which provided for the cancellation of the arbitration clauses and revocation of authority of arbitrators, shall be a bar for any party to an agreement to file a suit in the court having jurisdiction in the matter to which the agreement relates and all matters in dispute and difference between the parties to the agreement shall be decided by the court, as if arbitration clauses had never been included in the agreement. Sub- section 4 provided a period of limitation for such suits, notwithstanding anything contained in the 1940 Act, the A & C Act and the Limitation Act, 1963. Section 4 of the impugned Act excludes anything contained in the 1940 Act, A & C Act, Limitation Act and prescribes a period of six months for suits provided for in Section 3(2).