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Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998 – Constitutional validity of – Challenged, on ground of legislative competence of the State Legislature – Agreements relating to a State Irrigation Project – Disputes – Arbitration references – State enacted Kerala Act of 1998 which provided for cancellation of arbitration clauses in the agreements, revocation of authority of the arbitrators appointed thereunder and filing of appeals against awards or decrees already passed in certain arbitration references in respect of which period of limitation had expired – Whether the State Legislature had the legislative competence to enact the Kerala Act of 1998 – Held: The Kerala Act of 1998 in pith and substance is referable to Entry 13 of List III of Seventh Schedule to the Constitution and not to the Entries 12, 13, 14 and 37 of List I of the Seventh Schedule nor to Art.253 of the Constitution – The Kerala Act of 1998, therefore, is within the legislative competence of the State Legislature – In any case, in view of the Presidential assent u/Art.254(2) of the Constitution, the Kerala Act of 1998 would prevail within the State of Kerala – Constitution of India, 1950 – Seventh Schedule, List III, Entry 13 and Art.254(2) – Arbitration Act, 1940 – Doctrines / Principles – Doctrine of pith and substance. Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998 – Constitutional validity of – Challenged, on ground of encroachment upon judicial powers of the State – Agreements relating to a State Irrigation Project – Disputes – Arbitration references – State enacted Kerala Act of 1998 which provided for cancellation of arbitration clauses in the agreements, revocation of authority of the arbitrators appointed thereunder and filing of appeals against awards or decrees already passed in certain arbitration references in respect of which period of limitation had expired – Whether the Kerala Act of 1998 encroached on judicial powers of the courts and as such, was hit by the doctrine of separation of powers – Held: Though a law enacted by the Legislature may apparently seem to be within its competence but yet in substance if it is shown as an attempt to interfere with the judicial process, such law may be invalidated being in breach of doctrine of separation of powers – The Kerala Act of 1998, which has the effect of annulling the awards which have become “Rules of Court”, is a transgression on the judicial functions of the State and therefore, violative of doctrine of “separation of powers” – The Kerala Act of 1998 encroaches upon the judicial powers of the State and is therefore liable to be struck down as being unconstitutional on this count – Doctrines/Principles – Doctrine of “separation of powers”. Constitution of India, 1950 – Seventh Schedule, List III, Entry 13 –Arbitration – Legislative competence of the State Legislature – Held: The subject of arbitration finds place in Entry 13 of List III, i.e., the Concurrent List of the Seventh Schedule to the Constitution – Since the subject of arbitration is in the Concurrent List, the State can also make a law with regard to the same. Constitution of India, 1950 – Art.254, clause (2) – Conflict between the Central law and the State law – Held: Ordinarily, if there is any conflict between the Central law and the State law, in view of clause (1) of Art.254, the Central law would prevail – However, in view of clause (2) of Art.254, the State law would prevail when it is reserved for consideration and receives assent of the President of India. Legislature – State Legislature – Legislative competence of – Challenge to, on ground that it encroached upon the legislative competence of the Parliament – Held: In such a situation, the doctrine of pith and substance has to be applied to determine as to which entry does a given piece of legislation relate to – Once it is so determined, any incidental trenching on the field reserved to the other legislature is of no consequence – Predominance of the Union List would not prevent the State Legislature from dealing with any matter within List II, though it may incidentally affect any item in List I – If the State is competent to legislate on the subject, any incidental encroachment on any item in List I would not affect the State Legislature – Constitution of India, 1950 – Seventh Schedule – Lists I, II and III. Arbitration Act, 1940 – Powers exercised by the court under provisions of the Act in passing judgments and decrees for making the arbitration awards “Rule of Court” – Nature of – Held: They are judicial powers – Power to make an arbitration award “Rule of Court” is not a mechanical power. Doctrines / Principles – “Separation of powers doctrine” under the Constitution – Discussed. United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration – Resolution dated 11th December 1985 passed by the United Nations General Assembly – Effect of – Held: The General Assembly only recommended the adoption of UNCITRAL Model Law insofar as international commercial arbitration practices are concerned – Parliament, with certain modifications, has given due consideration to UNCITRAL Model Law for legislation on domestic arbitration – However, that cannot by itself be said to be binding on the Parliament to enact the law in accordance with UNCITRAL Model Law – Arbitration and Conciliation Act, 1996. |
