Section 87: Effect of Pre-23 October 2015 Arbitral and Court Proceedings

Historical Text of Section 87

The above text is retained for historical and reference purposes because it formed part of the 2019 amendment framework. It is not presented as presently operative law.

What Section 87 Sought to Do

Section 87 was inserted by Section 13 of the Arbitration and Conciliation (Amendment) Act, 2019 with retrospective effect from 23 October 2015. It sought to confine the 2015 amendments to arbitrations commenced on or after that date and to court proceedings arising from those later arbitrations.

In practical terms, it would also have excluded the 2015 amendments from court proceedings connected with arbitrations commenced before 23 October 2015, even where the court proceedings themselves began after that date.

Supreme Court Struck Down Section 87

In Hindustan Construction Company Ltd. v. Union of India, decided on 27 November 2019, the Supreme Court examined the constitutional validity of Section 87 and the repeal of Section 26 of the 2015 Amendment Act.

The Court struck down Section 87 as manifestly arbitrary and unconstitutional. It also struck down the legislative deletion of Section 26 of the 2015 Amendment Act, thereby restoring Section 26 to the statute book.

The official Supreme Court judgment is available here: Hindustan Construction Company Ltd. v. Union of India - Supreme Court judgment dated 27 November 2019.

Restoration of Section 26 of the 2015 Amendment Act

Following the Supreme Court judgment, Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 governs the transitional application of the 2015 amendments.

The Supreme Court explained that the 2015 amendments continue to apply to court proceedings initiated on or after 23 October 2015, even where those court proceedings arise from arbitral proceedings that had commenced before that date, subject to the governing legal principles laid down by the Court.

Current Legal Position

The current legal position is that Section 87 has no operative effect because it was struck down by the Supreme Court. The transitional application of the 2015 amendments must instead be understood through Section 26 of the 2015 Amendment Act and the Supreme Court decisions interpreting it.

The India Code page may continue to display the historical text of Section 87 in the consolidated Act presentation. That display should be read together with the binding Supreme Court ruling declaring Section 87 unconstitutional.

The official India Code record for the Arbitration and Conciliation Act, 1996 is available at India Code.

Why This Matters in Practice

The commencement date of the arbitral proceeding and the commencement date of any related court proceeding can affect which version of the Arbitration and Conciliation Act applies. For disputes involving the 23 October 2015 transition, parties should examine Section 26 of the 2015 Amendment Act and the Supreme Court authorities rather than relying on Section 87.