2020 (7) TMI 830 - HC - Indian Laws

Maintainability of appeal - Seeking release of amount against an order passed in arbitration proceedings - whether the present appeal, directed against an order passed in arbitration proceedings, is maintainable under Section 13 of the Commercial Courts Act? HELD THAT - Section 13 of the Commercial Courts Act provides for an appeal from orders passed by a Commercial Division of a High Court to the Commercial Appellate Division of that High Court, which are enumerated under Order XLIII of the CPC, as amended by the Commercial Courts Act or from orders which are mentioned in Section 37 of the A C Act. In KANDLA EXPORT CORPORATION ANR. VERSUS M/S OCI CORPORATION ANR. 2018 (2) TMI 412 - SUPREME COURT , while deciding an appeal arising from a decision of the Division Bench of the High Court of Gujarat that had dismissed an enforcement appeal which had arisen from an order passed in an execution proceeding under the Arbitration Act, in respect of a foreign award, the Supreme Court had observed 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. The present appeal is directed against an interlocutory order passed in proceedings under Section 36 of the A C Act, whereby a part of the amount which had been deposited by the appellant in this court, has been directed to be released in favour of the respondents. Under Section 37, no appeal is maintainable from any order passed under Section 36 of the A C Act. Further, Section 36 of the A C Act does not attract the provisions of the Code of Civil Procedure. Since the statue does not provide for an appeal against and order passed under Section 36, it is axiomatic that the present appeal is also not maintainable. The impugned order would neither fall under Order XLIII of the CPC, nor under Section 37 of the A C Act. Therefore, the present appeal filed under Section 13 of the Commercial Courts Act, is not maintainable. Appeal dismissed being not maintainable.

Summary

Issues Involved:
1. Maintainability of the appeal under Section 13 of the Commercial Courts Act.
2. Relationship and applicability of the Commercial Courts Act and the Arbitration and Conciliation Act.
3. Specific provisions under which appeals can be filed according to the Arbitration and Conciliation Act and the Commercial Courts Act.
4. The impact of amendments to Section 37 of the Arbitration and Conciliation Act on the maintainability of appeals.

Detailed Analysis:

1. Maintainability of the Appeal under Section 13 of the Commercial Courts Act:

The primary issue in this case was whether the present appeal, directed against an order passed in arbitration proceedings, is maintainable under Section 13 of the Commercial Courts Act. Section 13 states that appeals from orders of Commercial Courts or Divisions are limited to those specifically enumerated under Order XLIII of the CPC and Section 37 of the A&C Act. The court concluded that the present appeal does not fall under the categories listed in Section 37 of the A&C Act or Order XLIII of the CPC, thereby making the appeal non-maintainable.

2. Relationship and Applicability of the Commercial Courts Act and the Arbitration and Conciliation Act:

The court examined the relationship between the Commercial Courts Act and the Arbitration and Conciliation Act. It was argued that the Commercial Courts Act, being a later enactment, should override the A&C Act. However, the court found no inconsistency between the two Acts. The court emphasized that Section 11(1A) of the Commercial Courts Act explicitly states that appeals under the Commercial Courts Act are maintainable only if they fall under Section 37 of the A&C Act.

3. Specific Provisions Under Which Appeals Can Be Filed:

The court highlighted that Section 37 of the A&C Act restricts appeals to specific orders:
- Refusing to refer parties to arbitration under Section 8.
- Granting or refusing to grant any measure under Section 9.
- Setting aside or refusing to set aside an arbitral award under Section 34.

The court referred to the Supreme Court's decision in Kandla Export Corporation, which clarified that only orders enumerated in Section 37 of the A&C Act are appealable. This principle was reinforced by the Bombay High Court in Kakade Construction Company Ltd. vs. Vistra ITCL (India) Ltd., which held that orders under Section 36 of the A&C Act are not appealable.

4. Impact of Amendments to Section 37 of the A&C Act:

The court noted that Section 37 was amended in 2019 to include a non-obstante clause, making it clear that appeals can only be filed against orders specified in Section 37. This amendment further solidified the non-maintainability of appeals against orders passed under Section 36 of the A&C Act. The court concluded that the amended Section 37, being the later will of the legislature, prevails over the Commercial Courts Act.

Conclusion:

The court dismissed the appeal as not maintainable, emphasizing that the impugned order does not fall under the appealable orders listed in Section 37 of the A&C Act or Order XLIII of the CPC. The court reinforced that appeals are a creation of statute and cannot be claimed as a matter of right unless explicitly provided for by law.