Whether Hire Purchase Agreement entered into between the parties under the Arbitration Act, 1940 after the said act was repealed by Arbitration and Conciliation Act, 1996 is valid and binding on the parties – ICDS Ltd. Vs. Sri Bhaskaran Pillai and Ors. – Karnataka High Court
Hon’ble Karnataka High Court refers judgment in Purushottam s/o Tulsiram Badwaik Vs. Anil & Ors. (2018) ibclaw.in 137 SC and holds that it is very clear that, even when the proceedings had commenced under 1940 Act, the subsequent commencement of arbitral proceedings had to be in terms of the 1996 Act. Hence, it is clear that, if any proceedings had to be initiated, the same shall be in terms of the 1996 Act. If there be such an arbitration agreement which satisfies the requirements of Section 7 of the 1996 Act, and if no arbitral proceeding had commenced before the 1996 Act came into force, the matter would be completely governed by the provisions of the 1996 Act. Any reference to the 1940 Act in the arbitration agreement would be of no consequence and the matter would be referred to arbitration only in terms of the 1996 Act consistent with the basic intent of the parties and discernible from the arbitration agreement to refer the disputes to arbitration.