Arbitration Agreement Cannot Allow Retrospective Application Of 2015 Arbitration Amendment Act: Supreme Court Of India

The Hon'ble Supreme Court in a recent decision in Ratnam Sudesh Iyer v. Jackie Kakubhai Shroff¹ reiterated that the Arbitration and Conciliation (Amendment) Act 2015 (2015 Amendment Act) is prospective in nature and would apply to only those arbitral proceedings or court proceedings commencing on or after the 2015 Amendment Act coming into force. Therefore, the Apex Court held that the plea of 'patent illegality' was not available for an award that was rendered in an international commercial arbitration post the 2015 Amendment Act.  Further, the Apex Court clarified that a generally worded arbitration clause could not constitute an agreement to allow retrospective application of the 2015 Amendment Act contrary to the legislative intent. In this article, we briefly navigate through the facts and findings which led to the aforementioned judgment.