TMI Blog2018 (2) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 13(1) of the Commercial Courts Act, being a general provision vis- -vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act. Why Section 37 of the Arbitration Act was expressly included in the proviso to Section 13(1) of the Commercial Courts Act, which is equally a special provision of appeal contained in a self-contained code, which in any case would be outside Section 13(1) of the Commercial Courts Act? - Held that: - Parliament may have found it necessary to emphasize the fact that an order referring parties to arbitration under Section 8 is not appealable under Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the Commercial Courts Act - In all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides an appeal. Having provided for an appeal, the forum of appeal is left to the Court authorized by law to hear appeals from such orders . Section 50 properly read would, therefore, mean that if an appeal lies under the said provision, then alone would Section 13(1) of the Commercial Courts Act be attracted as layin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid judgment, the Appellants filed an appeal before the Queen s Bench Division, Commercial Court, which was rejected on 15th September, 2015. The Appellants, undeterred, filed yet another appeal before the Court of Appeal, Civil Division, in U.K. The Court of Appeal refused to grant leave to appeal on the ground that the award was not obviously wrong. 5. Meanwhile, an Execution Petition, being E.P. No.167 of 2015, was filed under Section 48 of the Arbitration Act on 29th June, 2015 by the Respondents before the District Court, Gandhidham-Kutch. On 7th March, 2016, the Appellants filed their objections to the said petition. On 12th September, 2016, the Respondents preferred an application before the High Court of Gujarat, under Section 15(5) of the Commercial Courts Act, for an appropriate order to transfer the execution petition to the High Court. By an order dated 11th November, 2016, the High Court transferred the aforesaid execution petition to the Commercial Division of the High Court of Gujarat, and a Special Leave Petition against the said order was dismissed by this Court on 3rd March, 2017. 6. On 8th August, 2017, the High Court of Gujarat dismissed the objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned judgment of 8th August, 2017, allowing the execution petition filed by the Respondents, would certainly be a decision and/or judgment which would expressly be covered by the wide terms contained in Section 13(1) of the Commercial Courts Act. He also relied upon Section 13(2) to state that, after the coming into force of the Commercial Courts Act, appeals lie only in the manner indicated in the aforesaid Act and not otherwise than in accordance with the provisions of the Act. According to the learned counsel, the scheme of the Act would show that, in all matters over ₹ 1 crore, the legislative intent is to provide an appeal, given the stakes involved, which will, under Section 14, be expeditiously disposed of within a period of 6 months from the date of filing of such appeal. Learned counsel also referred us to Section 5 of the Arbitration Act, which contains a non-obstante clause insofar as Part I of the Arbitration Act is concerned, and stated that the absence of a similar non-obstante clause, so far as Part II of the Arbitration Act is concerned, is significant. Therefore, this is not even a case where there are competing non-obstante clauses and, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was one more attempt to delay the inevitable, and referred us to the various proceedings in the U.K. as well as proceedings in this country to submit that we should dismiss the appeal on this ground alone. 9. Having heard learned counsel for both parties, it is interesting to note that both the Commercial Courts Act as well as the detailed Arbitration Amendment Act of 2015, were brought into force on the same day, i.e. 23rd October, 2015, as a result of two reports of the Law Commission of India. 10. The Statement of Objects and Reasons for the Commercial Courts Act, inter alia, provides: The proposal to provide for speedy disposal of high value commercial disputes has been under consideration of the Government for quite some time. The high value commercial disputes involve complex facts and questions of law. Therefore, there is a need to provide for an independent mechanism for their early resolution. Early resolution of commercial disputes shall create a positive image to the investor world about the independent and responsive Indian legal system. xxx 6. It is proposed to introduce the Commercial Courts, Commercial Division and Commercial Appellate Division of High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utes to be Judges of the Commercial Division. 5. Constitution of Commercial Appellate Division. - (1) After issuing notification under sub-section (1) of section 3 or order under sub-section (1) of section 4, the Chief Justice of the concerned High Court shall, by order, constitute Commercial Appellate Division having one or more Division Benches for the purpose of exercising the jurisdiction and powers conferred on it by the Act. (2) The Chief Justice of the High Court shall nominate such Judges of the High Court who have experience in dealing with commercial disputes to be Judges of the Commercial Appellate Division. 7. Jurisdiction of Commercial Divisions of High Courts. - All suits and applications relating to commercial disputes of a Specified Value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court: Provided that all suits and applications relating to commercial disputes, stipulated by an Act to lie in a court not inferior to a District Court, and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to the Commercial Appellate Division of that High Court within a period of sixty days from the date of judgment or order, as the case may be: Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996. (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act. 14. Expeditious disposal of appeals. - The Commercial Appellate Division shall endeavour to dispose of appeals filed before it within a period of six months from the date of filing of such appeal. 15. Transfer of pending cases. - (1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any instrument having effect by virtue of any law for the time being in force other than this Act. 12. The Arbitration and Conciliation Act, 1996, repealed the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. Its long title reads as follows: An Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. The said Act is in four parts. Part I, with which we are not concerned in the present appeals, speaks of domestic as well as international commercial arbitration that takes place in India. Part II, with which we are directly concerned, speaks of enforcement of foreign awards. A foreign award is defined in Section 44 as meaning an arbitral award on differences between persons arising out of legal relationships considered commercial, inter alia, in pursuance of an agreement in writing for arbitration to which the New York Convention set forth in the First Schedule applies. Sections 49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a fundamental rule of construction that a proviso must be considered with relation to the principal matter to which it stands as a proviso . Therefore it is to be construed harmoniously with the main enactment. (Per Das, C.J. in Abdul Jabar Butt v. State of Jammu Kashmir [(1957) SCR 51, 59]). Bhagwati, J., in Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax [(1955) 2 SCR 483, 493] said: It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other. Lord Macmillan in Madras Southern Maharatta Railway Co. v. Bezwada Municipality [(1944) LR 71 IA 113, 122] laid down the sphere of a proviso as follows: The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. Where, as in the present case, the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court exhaustively reviewed the authorities and then stated, in paragraph 36, that the decisions noticed so far lay down certain broad principles. We are directly concerned with the principle laid down in sub-section (vii), which reads as under: ( vii ) The exception to the aforementioned rule is where the special Act sets out a self-contained code and in that event the applicability of the general law procedure would be impliedly excluded. The express provision need not refer to or use the words letters patent but if on a reading of the provision it is clear that all further appeals are barred then even a letters patent appeal would be barred. (at page 350) 19. One of the submissions made before this Court in that case is the identical submission made by Shri Giri before us that Section 37 contains the expression and from no others which is conspicuous by its absence in Section 50 of the Arbitration Act. This was answered by the Court as follows: 60. It is also evident that Part I and Part II of the Act are quite separate and contain provisions that act independently in their respective fields. The opening words of Section 2 i.e. the definition clause in Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign award. However, this was done away with in the Arbitration Act, by enacting Section 49, which makes a radical change by which the foreign award itself is deemed to be a decree of the Court. The exclusion of an appeal in such cases has thus to be understood in the light of the change in law introduced by Section 49 of the Act (see paragraphs 74 and 75 of the judgment). It may be added that the aforesaid amendment has speeded up the process of enforcing foreign awards by taking away the right of appeal in cases where the Single Judge decides in favour of enforcing a foreign award. 20. The Court went on to discuss this Court s judgment in Union of India vs. Mohindra Supply Company, (1962) 3 SCR 497, and ultimately concluded: 89. It is, thus, to be seen that the Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan [(2004) 11 SCC 672]) was held to be a self-contained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is equally a special provision of appeal contained in a self-contained code, which in any case would be outside Section 13(1) of the Commercial Courts Act. One answer is that this was done ex abundanti cautela. Another answer may be that as Section 37 itself was amended by the Arbitration Amendment Act, 2015, which came into force on the same day as the Commercial Courts Act, Parliament thought, in its wisdom, that it was necessary to emphasise that the amended Section 37 would have precedence over the general provision contained in Section 13(1) of the Commercial Courts Act. Incidentally, the amendment of 2015 introduced one more category into the category of appealable orders in the Arbitration Act, namely, a category where an order is made under Section 8 refusing to refer parties to arbitration. Parliament may have found it necessary to emphasize the fact that an order referring parties to arbitration under Section 8 is not appealable under Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the Commercial Courts Act. Whatever may be the ultimate reason for including Section 37 of the Arbitration Act in the proviso to Section 13(1), the ratio deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the impugned judgment [ Integrated Sales Services Ltd. v. DMC Management Consultants Ltd. , 2016 SCC OnLine Bom 4445] of the learned Single Judge under Section 50(1)( b ) of the 1996 Act is passed in the Original Side of the High Court. Be that as it may, under Section 13 of the Act, the Single Judge has taken the decision. Section 13 bars an appeal under the Letters Patent unless an appeal is provided under the 1996 Act. Such an appeal is provided under Section 5 of the Act. The letters patent appeal could not have been invoked if Section 50 of the 1996 Act would not have provided for an appeal. But it does provide for an appeal. A conspectus reading of Sections 5 and 13 of the Act and Section 50 of the 1996 Act which has remained unamended leads to the irresistible conclusion that a letters patent appeal is maintainable before the Division Bench. It has to be treated as an appeal under Section 50(1)( b ) of the 1996 Act and has to be adjudicated within the said parameters. 26. What is important to note is that it is Section 50 that provides for an appeal, and not the letters patent, given the subject matter of appeal. Also, the appeal has to be adjudicated with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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