Annual Arbitration Review 2018

Kandla Export Corporation & Anr v. M/s OCI Corporation & Anr

Reading Time: 3 minutes

Citation:2018 14 SCC 715

Court:Supreme Court of India

Date:  7-February-2018

Coram:J. R.F. Nariman and J. Navin Sinha

Issue:Whether an appeal not maintainable under Section 50 of the Arbitration and Conciliation Act is nonetheless maintainable under Section 13 (1) of the Commercial Courts Act.

Facts:

There was a dispute between the parties M/s OCI Corporation (Respondent) and Kandla Export Corporation (Appellant) which was referred to arbitration under the Grain and Free Trade Association Rules. An arbitral award was passed in April 2014 directing the Appellants to pay a sum of money along with a certain amount of interest to the Respondents. This award was appealed to the Appellate tribunal which also passed a similar order but changing the amount as certain deductions were made to the amount payable by the Appellants. The Appellants filed a series of appeals challenging the award to the Queens Bench Division of Commercial Court.

Subsequently, the Respondents filed an execution suit in the District Court of Kutch, and the Appellants had filed their objection as well. With the Commercial Act Amendments coming into force in 2015, the Respondents made an application to the High Court to transfer the execution proceedings to it which was accepted by the Gujarat High Court. The Gujarat High Court passed an order to enforce the award. This order was challenged by the Appellants in the Commercial Appellate Division under section 13(1) of the Commercial Courts Act. This appeal was also dismissed on the grounds of maintainability and the decision of the Commercial Appellate Division is challenged in the Supreme Court.

Rules:

Section 50 of the Arbitration and Conciliation Act

Appealable orders.—(1) An appeal shall lie from the order refusing to—

(a) refer the parties to arbitration under section 45;

(b) enforce a foreign award under section 48,

to the court authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this

section shall affect or take away any right to appeal to the Supreme Court.

Section 13 (1) of the Commercial Courts Act, 2015

(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.

Analysis:

The Contentions of the Appellants are that under the Commercial Courts Acts, section 13, they have a right to file an appeal against any decision or judgment passed by the Commercial Division of the High Court and thus an enforcement order passed by the Court would also be appealable. Also, section 50 of the Arbitration Act does not expressly prohibit the appeals which are not listed because this section does not have a restricting language such as that of Section 37 of the Arbitration Act. Hence, such decision by the Commercial Division Court can be appealed to the Commercial Appellate Division.

The Contention raised by the Respondents were that the Commercial Courts Act should not be read alone and should be harmoniously with the Arbitration Act. The object of both these legislations is for speedy redressal of disputes and such an appeal would defeat the purpose of the acts. Also, section 50 of the Arbitration Act creates a specific bar against appeals from any orders which are not mentioned under the said provision.

The Supreme Court relied on its decision Furest Day Lawson Ltd. v. Jindal Exports Ltd, in which the Court discussing the scope of orders and decisions that can be appealed under section 50 of the Arbitration Act. The court stated that the Act is a self-contained act and general law procedures are impliedly excluded. Only those orders ae subject to appeal that are listed under Section 50 of the Act.

Hence, the Supreme Court affirmed the Commercial Appellate Divisions decision questioning the maintainability of the suit as section 13 of the Commercial Courts Acts is a general provision and only orders listed under Section 50 of the Arbitration Act are subject to appeal.

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