Section 50 of The Arbitration Act II

My Lord, Is an appeal, not maintainable under Section 50 of The Arbitration and Conciliation Act, 1996, nonetheless maintainable under Section 13(1) of The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015?

No.

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. 23 October, 2015…

Given the judgment of this Court in Fuerst Day Lawson, which Parliament is presumed to know when it enacted The Arbitration Amendment Act, 2015, and given the fact that no change was made in Section 50 of The Arbitration Act when The Commercial Courts Act was brought into force, it is clear that Section 50 is a provision contained in a self-contained code on matters pertaining to Arbitration, and which is exhaustive in nature. It carries the negative import mentioned in paragraph 89 of Fuerst Day Lawson that appeals which are not mentioned therein, are not permissible. This being the case, it is 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.

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 laying down the forum which will hear and decide such an appeal.

In fact, in Sumitomo Corporation, (2008) 4 SCC 91 this Court adverted to Section 50 of The Arbitration Act and to Sections 10(1)(a) and 10F of The Companies Act, 1956, to hold that once an appeal is provided for in Section 50, the Court authorized by law to hear such appeals would then be found in Sections 10(1)(a) and 10F of The Companies Act. The present case is a parallel instance of Section 50 of The Arbitration Act providing for an appeal, and Section 13(1) of The Commercial Courts Act providing the forum for such appeal. Only, in the present case, as no appeal lies under Section 50 of The Arbitration Act, no forum can be provided for.

In point of fact, the raison d’être for the enactment of The Commercial Courts Act is that Commercial disputes involving high amounts of money should be speedily decided. Given the objects of both the enactments, if we were to provide an additional appeal, when Section 50 does away with an appeal so as to speedily enforce foreign awards, we would be turning The Arbitration Act and The Commercial Courts Act on their heads. Admittedly, if the amount contained in a foreign award to be enforced in India were less than Rs. One Crore, and a Single Judge of a High Court were to enforce such award, no appeal would lie, in keeping with the object of speedy enforcement of foreign awards. However, if, in the same fact circumstance, a foreign award were to be for Rs. One Crore or more, if the Appellants are correct, enforcement of such award would be further delayed by providing an appeal under Section 13(1) of The Commercial Courts Act. Any such interpretation would lead to absurdity, and would be directly contrary to the object sought to be achieved by The Commercial Courts Act, viz., speedy resolution of disputes of a commercial nature involving a sum of Rs. One Crore and over. For this reason also, we feel that Section 13(1) of The Commercial Courts Act must be construed in accordance with the object sought to be achieved by the Act.”

Hon’ble Justice R.F. Nariman, Kandla Export Corporation v. M/S. OCI Corporation, [Civil Appeal No. 1661-1663 of 2018].

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