- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.122 OF 2000 IN ARBITRATION PETITION NO.396 OF 1998 M/s.Alluminite Pvt.Ltd., ) a Company incorporation under ) Companies Act, 1956 and having ) its office at Hiraj Chambers, ) 7, Hiramal Somani Marg, ) Mumbai 400 001. ).. Appellants (Org.Respondents) Versus General Insurance Corporation ) of India, a Government Company, ) incorporated under Companies ) Act, 1956, in accordance with ) Section 9 of the General ) Insurance Business ) ( Nationalisation ) Act, 1972, ) having its registered office ) at "SURAKSHA", 170, J.Tata Road,) Churchgate, Mumbai - 400 020. ).. Respondents (Org.Petitioners) -- Shri M.D.Siodia i/b Ms Duraiya S.Retiwala, for the Appellants. S/Shriniwas Deshmukh and Vishal Muglikar, advocates, i/b M/s.Mulla & Mulla & Craigie Blunt and Caroe, Advocates for the Respondents. -- CORAM : SRI R.M.S.KHANDEPARKAR & SRI A.V.NIRGUDE, JJ DATED : 24TH APRIL, 2008 - 2 - ORAL JUDGMENT : ( Per R.M.S.Khandeparkar, J ) ORAL JUDGMENT : ( Per R.M.S.Khandeparkar, J ) ORAL JUDGMENT : ( Per R.M.S.Khandeparkar, J ) 1. This appeal arises from the judgment and order passed in the Arbitration Petition No.396 of 1998 on 21st December, 1999. By the impugned judgment and order, the learned Single Judge has held that the arbitration proceedings comenced on 17th October, 1995 and, therefore, they ought to be governed by the provisions of Arbitration Act, 1940, besides there was no specific or express agreement between the parties that the provisions of the 1940 Act should not apply to the arbitration proceedings, nor there was any express agreement between the parties that the provisions of the Arbitration and Conciliation Act, 1996 would apply to the arbitration proceedings, and hence the arbitration petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 was not maintainable. 2. Drawing our attention to the award passed by the Arbitrator as well as the fact that the arbitral proceedings commenced from 25th March, 1996 and that there was no dispute between the parties that the proceedings were to be governed by the procedure under - 3 - the Arbitration and Conciliation Act, 1996, the learned advocate for the appellants submitted that the learned Single Judge erred in dismissing the petition solely on the ground that it was not maintainable under Section 34 of the Arbitration and Conciliation Act, 1996 and consequently also erred in observing that the award should be construed to have been declared under the Arbitration Act, 1940. The learned advocate appearing for the respondents, on the other hand, submitted that the claim for appointment of Arbitrator was made under the letter dated 17th October, 1995, and considering the same, no fault can be found with the observations by the learned Single Judge that the proceedings ought to have been under the old Act. 3. The learned advocate appearing for the appellants has sought to rely upon the decision of the Apex Court in the matter of Delhi Transport Delhi Transport Delhi Transport Corporation Ltd. v. Rose Advertising, Corporation Ltd. v. Rose Advertising, Corporation Ltd. v. Rose Advertising, reported in AIR 2003 SC 2523. 4. Plain reading of the award discloses that the parties approached the Arbitrator with clear understanding that the proceedings would be governed by the Arbitration and Conciliation Act, 1996. It is - 4 - true that a request for appointment of the Arbitrator was made by the appellants under letter dated 17th October, 1995. However, the law on this point is well settled by a decision of the Apex Court in Thyssen Thyssen Thyssen Stahlunion Gmbh v. Steel Authority of India Ltd., Stahlunion Gmbh v. Steel Authority of India Ltd., Stahlunion Gmbh v. Steel Authority of India Ltd., reported in AIR 1999 SC 3923 and in Delhi Transport Corporation Ltd.’s case. Even the Arbitration Act itself gives enough indication about the discretion left to the parties in this regard. If one peruses the provisions comprised under the Arbitration and Conciliation Act, 1996, the same invariably provide, at every stage, that the provisions are subject to the agreement between the parties. The provision relating to the procedure to be followed or any dispute to be raised regarding the procedure in terms of Section 13 of the said Act, it specifically provides that the parties are free to agree on the procedure even for challenging the procedure adopted by the arbitrator. Undoubtedly, it is subject to Section 4, that is to safeguard the rights of the parties which cannot be waived, but for the said exception, the Act gives an ample opportunity and freedom to the parties to adopt the procedure convenient to the parties. Being so, merely because request for appointment of an arbitrator was made under the letter dated 17th October, 1995, it would not lead to a conclusion that - 5 - the proceedings were essentially under the Old Act. The Apex Court in Delhi Transport Corporation Ltd.’s Delhi Transport Corporation Ltd.’s Delhi Transport Corporation Ltd.’s case (supra) case (supra) case (supra) had clearly ruled that Section 85(2) of the 1996 Act recognizes an agreement between the parties which would permit the parties to follow the procedure either under the old Act or the new Act. Considering the conduct of the arbitration proceedings and participation of the parties therein, the Apex Court in Delhi Transport Corporation Ltd.’s case (supra) held that the parties had acted under the 1996 Act. Similar is the situation in the case in hand. The arbitration award ex facie discloses that the parties had agreed to adopt procedure in terms of the new Act. The relevant recording in the said award reads thus:- "And whereas, in the preliminary meeting held on 4th June 1996 by both the Arbitrators, the parties referring to the New Arbitration and Conciliation Act 1996 requested for the appointment of IIIrd Arbitrator and hence both the parties agreed for the appointment of Shri D.S.Malik, FIIA, as the presiding Arbitrator." It gives enough indication that the parties had clearly agreed for the application of new Act to the - 6 - arbitration proceedings. Being so, the learned Single Judge clearly erred in holding that there was no agreement between the parties for the applicability of the new Act. For the same reason, the observation that the award was under the old Act cannot be sustained. 5. Hence, the appeal succeeds. The impugned judgment and order is hereby set aside and the matter is remanded to the learned Single Judge to deal with the Arbitration Petition No.396 of 1998 in accordance with the provisions of law and considering the fact that the provisions of Arbitration and Conciliation Act, 1996 apply to the same. There shall be no order as to costs. ( R.M.S.KHANDEPARKAR, J ) ( A.V.NIRGUDE, J )