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2018 (2) TMI 412

under Section 13(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015? - Held 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. - An order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act. - It is clear that 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 .....

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ward was passed pursuant to Arbitration Rule No.125 of the Grain and Feed Trade Association (GAFTA) directing the Appellants, who were the sellers, to pay the Respondents, who were the buyers, a sum of US$ 846,750 together with compound interest at the rate of 4% calculated at quarterly rests. In appeal, by an order dated 16th April, 2015, the Appellate Tribunal directed the appellants to pay a sum of US$ 815,000 together with compound interest at the rate of 4% calculated at quarterly rests. 4. Being aggrieved by the Appellate Award, the Appellants filed an appeal before the Queen s Bench. However, the said appeal came to be rejected on 14th July, 2015, on the ground that the award passed by the Appellate Tribunal was not obviously wrong. Against the aforesaid 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 unde .....

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Section 21, which provides that the provisions of the Commercial Courts Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force. He argued that Section 37 of the Arbitration Act, which is expressly mentioned in the proviso to Section 13(1) of the Commercial Courts Act, specifically speaks of the enumerated appeals in the said provision, together with the expression and no others , which expression is conspicuous by its absence in Section 50 of the Arbitration Act. He also argued that the language of Section 13(1) of the Commercial Courts Act is extremely wide - it embraces decisions , judgments and/or orders by the Commercial Division of a High Court, and that this being so, the 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 accorda .....

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l by the Commercial Courts Act, which is impliedly excluded by the Arbitration Act, would militate against the object of both Acts. He also relied upon various other judgments of this Court and the High Courts to buttress these submissions. The learned counsel further argued that in cases of enforcement of foreign awards of an amount below ₹ 1 crore, admittedly, no appeal would lie. However, merely because the amount contained in the foreign award in question was above ₹ 1 crore, it does not stand to reason that an extra appeal would be provided. That is not the intention of the Commercial Courts Act. He also exhorted us to dismiss the present appeals, stating that the present attempt by the Appellants 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 .....

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ject-matter in respect of a suit as determined in accordance with section 12 which shall not be less than one crore rupees or such higher value, as may be notified by the Central Government. 4. Constitution of Commercial Division of High Court. - (1) In all High Courts, having ordinary civil jurisdiction, the Chief Justice of the High Court may, by order, constitute Commercial Division having one or more Benches consisting of a single Judge for the purpose of exercising the jurisdiction and powers conferred on it under this 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 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 e .....

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Court has been constituted. 11. Bar of jurisdiction of Commercial Courts and Commercial Divisions. - Notwithstanding anything contained in this Act, a Commercial Court or a Commercial Division shall not entertain or decide any suit, application or proceedings relating to any commercial dispute in respect of which the jurisdiction of the civil court is either expressly or impliedly barred under any other law for the time being in force. 13. Appeals from decrees of Commercial Courts and Commercial Divisions. - (1) Any person aggrieved by the decision of the Commercial Court or Commercial Division of a High Court may appeal 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 or .....

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ion of the High Court may, on the application of any of the parties to the suit, withdraw such suit or application from the court before which it is pending and transfer the same for trial or disposal to the Commercial Division or Commercial Court, as the case may be, having territorial jurisdiction over such suit, and such order of transfer shall be final and binding. 21. Act to have overriding effect. - Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in 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 .....

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ut with great felicity in CIT v. Indo-Mercantile Bank Ltd., 1959 Supp (2) SCR 256 at 266-267, thus: The proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment. Ordinarily it is foreign to the proper function of a proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment. It is 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 o .....

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ection 50 of the Arbitration Act, it would lie under Section 13(1) of the Commercial Courts Act. 18. To answer this question, it is necessary to advert to the judgment in Fuerst Day Lawson (supra). The common question that arose for consideration in the batch of cases before the Court was whether an order, though not appealable under Section 50 of the Arbitration Act would, nevertheless be subject to appeal under the Letters Patent of the High Court. In answering this question, this 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 Cou .....

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then went into the legislative policy which led to the enactment of Section 50 of the Arbitration Act. It found that under the erstwhile Foreign Awards Act, a formal decree had to be passed in terms of the foreign award, and there was a possibility that such decree may be in excess of or not in accordance with the award. It was for this reason that an appeal lay under Section 6(2) of the Foreign Awards Act even against a decree enforcing the foreign 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, th .....

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s clear that Section 13(1) of the Commercial Courts Act, being a general provision vis-à-vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act. 22. However, the question still arises as to 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. 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 .....

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ng terms: 25. The aforesaid provision clearly lays down that a forum is created i.e. Commercial Appellate Division. Section 50(1)(b) of the 1996 Act provides for an appeal. Section 50(1)(b) has not been amended by the Act that has come into force on 23-10-2015. Thus, an appeal under Section 50(1)(b) of the 1996 Act before the Division Bench is maintainable. 26. Thus analysed, we find 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 a .....

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