KANDLA EXPORT CORPORATION & ANR. versus M/S OCI CORPORATION & ANR. on 7 February 2018

[2018] 1 S.C.R. 915

KANDLA EXPORT CORPORATION & ANR.

v.

M/S OCI CORPORATION & ANR.

(Civil Appeal Nos. 1661-1663 of 2018)

FEBRUARY 07, 2018

[R. F. NARIMAN AND NAVIN SINHA, JJ.]

Commercial Courts, Commercial Division and CommercialAppellate Division of High Courts Act, 2015:

s.13(1) – Appeal under – Against enforcement of foreign award– Maintainability of – Commercial Division of High Court passedorder enforcing foreign award – Appeal against u/s. 13(1) –Dismissed on the ground that since an appeal did not lie from ajudgment enforcing a foreign award under s. 50 of Arbitration Act,no such appeal would be maintainable under Commercial CourtsAct – On appeal, held: s.50 is a provision contained in a self-contained code on matters of arbitration – s.13(1) is a generalprovision vis-a-vis arbitration – Applying the doctrine of harmoniousconstruction of both the statutes, they are best harmonised by givingeffect to the special statute i.e. Arbitration Act vis-a-vis the moregeneral statute i.e. Commercial Courts Act – Therefore, an appealnot maintainable u/s. 50 of Arbitration Act would not be maintainableu/s. 13(1) of Commercial Courts Act – An interpretation contrary tothis would be directly contrary to the object sought to be achievedby Commercial Courts Act viz. speedy resolution of disputes –Arbitration and Conciliation Act 1996 – s.50 – Interpretation ofStatutes – Doctrine of Harmonious Construction.

Dismissing the appeals, the Court

HELD: 1. Section 50 of Arbitration and Conciliation Act,1996 is a provision contained in a self-contained code on matterspertaining to arbitration, and which is exhaustive in nature. Itcarries the negative import mentioned in*Fuerst Day Lawson*

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Acase that appeals which are not mentioned in the Act, are notpermissible. This being the case, it is clear that Section 13(1) ofthe Commercial Court, Commercial Division and CommercialAppellate Division of High Courts Act, 2015 (Commercial CourtsAct) being a general provision vis-à-vis arbitration relating toappeals arising out of commercial disputes, would obviously notBapply to cases covered by Section 50 of the Arbitration Act. [Para21] [933-B-D]

2. The question still arises as to why Section 37 of theArbitration Act was expressly included in the proviso to SectionC13(1) of the Commercial Courts Act, which is equally a specialprovision of appeal contained in a self-contained code, which inany case would be outside Section 13(1) of the Commercial CourtsAct. One answer is that this was done ex abundanti cautela.Another answer may be that as Section 37 itself was amended bythe Arbitration Amendment Act, 2015, which came into force onDthe same day as the Commercial Courts Act, Parliament thought,in its wisdom, that it was necessary to emphasise that the amendedSection 37 would have precedence over the general provisioncontained in Section 13(1) of the Commercial Courts Act.Incidentally, the amendment of 2015 introduced one moreEcategory into the category of appealable orders in the ArbitrationAct, namely, a category where an order is made under Section 8refusing to refer parties to arbitration. Parliament may have foundit necessary to emphasize the fact that an order referring partiesto arbitration under Section 8 is not appealable under Section37(1)(a) and would, therefore, not be appealable under SectionF13(1) of the Commercial Courts Act. Whatever may be theultimate reason for including Section 37 of the Arbitration Act inthe proviso to Section 13(1), the ratio decidendi of the judgmentin *Fuerst Day Lawson case would apply, and this being so, appealsfiled under Section 50 of the Arbitration Act would have to followGthe drill of Section 50 alone. [Para 22] [933-E-H; 934-A]

3. This, follows from the language of Section 50 itself. Inall arbitration cases of enforcement of foreign awards, it is Section50 alone that provides an appeal. Having provided for an appeal,the forum of appeal is left “to the Court authorized by law to hearH

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 beattracted as laying down the forum which will hear and decidesuch an appeal. [Para 23] [934-B]

4. Given the objects of both the statutes, it is clear thatarbitration itself is meant to be a speedy resolution of disputesbetween parties. Equally, enforcement of foreign awards shouldtake place as soon as possible if India is to remain as an equalpartner, commercially speaking, in the international community.In point of fact, the raison d’être for the enactment of theCommercial Courts Act is that commercial disputes involvinghigh amounts of money should be speedily decided. Given theobjects of both the enactments, if an additional appeal is providedwhen Section 50 does away with an appeal so as to speedily enforceforeign awards, it would be turning the Arbitration Act and theCommercial Courts Act on their heads. [Para 28] [935-G-H;936-A]

5. If the amount contained in a foreign award to be enforcedin India were less than Rs. one crore, and a Single Judge of aHigh Court were to enforce such award, no appeal would lie, inkeeping with the object of speedy enforcement of foreign awards.However, if, in the same fact circumstance, a foreign award wereto be for Rs.one crore or more, enforcement of such award wouldbe further delayed by providing an appeal under Section 13(1) ofthe Commercial Courts Act. Any such interpretation would leadto absurdity, and would be directly contrary to the object soughtto be achieved by the Commercial Courts Act, viz., speedyresolution of disputes of a commercial nature involving a sum ofRs.1 crore and over. For this reason also, Section 13(1) of theCommercial Courts Act must be construed in accordance withthe object sought to be achieved by the Act. Any construction ofSection 13 of the Commercial Courts Act, which would lead tofurther delay, instead of an expeditious enforcement of a foreignaward must, therefore, be eschewed. [Para 28] [936-B-D]

6. Even on applying the doctrine of harmonious constructionof both statutes, it is clear that they are best harmonized by giving A

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Aeffect to the special statute i.e. the Arbitration Act, vis-à-vis themore general statute, namely the Commercial Courts Act, beingleft to operate in spheres other than arbitration. [Para 28][936-D-E]

*Fuerst Day Lawson Limited v. Jindal Exports LimitedB(2011) 8 SCC 333 : [2011] 11 SCR 1 ; SumitomoCorporation vs. CDC Financial Services (Mauritius)Ltd. and Ors. (2008) 4 SCC 91 : [2008] 3 SCR 309 ;Arun Dev Upadhyaya v. Integrated Sales Service Ltd.(2016) 9 SCC 524 : [2016] 7 SCR 976 – relied on.

CCIT v. Indo-Mercantile Bank Ltd. [1959] 2 Suppl. SCR256 ; Union of India v. Mohindra Supply Company[1962] 3 SCR 497– referred to.

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CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1661-F1663 of 2018.

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From the Judgment and Order dated 28.09.2017 of the High Courtof Gujarat at Ahmedabad in First Appeal Nos. 3096, 3097 and 3098 of2017.

V. Giri, Sr. Adv, Mahesh Agarwal, Archit Jani, Kirti KumarThakkar, Rishabh Parikh, Nishant Rao, Rajesh Kumar, E. C. Agrawala,Advs for the Appellants.

Tejas Karia, Ms. Ananya Aggarwal, Ms. Surabhi Lal, RavinderHNijhawan, S. S. Shroff, Advs for the Respondents.

The Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. Leave granted.

2. The present appeals raise an important question as to whetheran appeal, not maintainable under Section 50 of the Arbitration andConciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”),is nonetheless maintainable under Section 13(1) of the CommercialCourts, Commercial Division and Commercial Appellate Division of HighCourts Act, 2015 (hereinafter referred to as “the Commercial CourtsAct”).

3. The brief facts necessary to decide the aforesaid issue are asfollows. On 28[th] April, 2014, an arbitration award was passed pursuantto Arbitration Rule No.125 of the Grain and Feed Trade Association(GAFTA) directing the Appellants, who were the sellers, to pay theRespondents, who were the buyers, a sum of US$ 846,750 togetherwith compound interest at the rate of 4% calculated at quarterly rests.In appeal, by an order dated 16[th] April, 2015, the Appellate Tribunaldirected the appellants to pay a sum of US$ 815,000 together withcompound interest at the rate of 4% calculated at quarterly rests.

4. Being aggrieved by the Appellate Award, the Appellants filedan appeal before the Queen’s Bench. However, the said appeal cameto be rejected on 14[th] July, 2015, on the ground that the award passed bythe Appellate Tribunal was not obviously wrong. Against the aforesaidjudgment, the Appellants filed an appeal before the Queen’s BenchDivision, Commercial Court, which was rejected on 15[th] September, 2015.The Appellants, undeterred, filed yet another appeal before the Court ofAppeal, Civil Division, in U.K. The Court of Appeal refused to grantleave 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 29[th] June, 2015 bythe Respondents before the District Court, Gandhidham-Kutch. On 7[th]March, 2016, the Appellants filed their objections to the said petition. On12[th] September, 2016, the Respondents preferred an application beforethe High Court of Gujarat, under Section 15(5) of the Commercial CourtsAct, for an appropriate order to transfer the execution petition to theHigh Court. By an order dated 11[th] November, 2016, the High Courttransferred the aforesaid execution petition to the Commercial Divisionof the High Court of Gujarat, and a Special Leave Petition against thesaid order was dismissed by this Court on 3[rd] March, 2017.

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A6. On 8[th] August, 2017, the High Court of Gujarat dismissed theobjections that were filed by the Appellants and allowed the executionpetition filed by the Respondents. Being aggrieved by this judgment, theAppellants filed an appeal under the Commercial Courts Act, whichwas dismissed by the impugned judgment dated 28[th] September, 2017,stating that the Commercial Courts Act did not provide any additionalBright of appeal which is not otherwise available to the Appellants underthe provisions of the Arbitration Act. Considering the fact that Section50 of the Arbitration Act only provided for an appeal in case a petition toenforce a foreign award was rejected, the High Court held, keeping inview the legislative policy of the Arbitration Act, (which was to speedilyCdetermine matters relating to enforcement of foreign awards) that sincean appeal did not lie from a judgment enforcing a foreign award underthe said section, no such appeal would be maintainable under theCommercial Courts Act.

7. Shri V. Giri, learned senior counsel appearing on behalf of theDAppellants, has taken us through the Commercial Courts Act inpainstaking detail. He relied upon Sections 3 to 7 of the said Act andthen took us to Section 13. According to the learned counsel, Section13 provided an appeal to any person aggrieved by the decision of aCommercial Division of a High Court, and as Section 50 of the ArbitrationAct found no place in the proviso to Section 13(1) of the CommercialECourts Act, it is clear that the wide language of Section 13(1) wouldconfer a right of appeal, notwithstanding anything contained in Section50 of the Arbitration Act. This, according to him, became even clearerwhen read with Section 21, which provides that the provisions of theCommercial Courts Act shall have effect notwithstanding anythingFinconsistent contained in any other law for the time being in force. Heargued that Section 37 of the Arbitration Act, which is expresslymentioned 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 isconspicuous by its absence in Section 50 of the Arbitration Act. HeGalso argued that the language of Section 13(1) of the Commercial CourtsAct is extremely wide – it embraces “decisions”, “judgments” and/or“orders” by the Commercial Division of a High Court, and that this beingso, the impugned judgment of 8[th] August, 2017, allowing the executionpetition filed by the Respondents, would certainly be a “decision” and/orH“judgment” which would expressly be covered by the wide terms contained in Section 13(1) of the Commercial Courts Act. He also reliedupon Section 13(2) to state that, after the coming into force of theCommercial Courts Act, appeals lie only in the manner indicated in theaforesaid Act and not otherwise than in accordance with the provisionsof the Act. According to the learned counsel, the scheme of the Actwould show that, in all matters over Rs.1 crore, the legislative intent is toprovide an appeal, given the stakes involved, which will, under Section14, be expeditiously disposed of within a period of 6 months from thedate of filing of such appeal. Learned counsel also referred us to Section5 of the Arbitration Act, which contains a non-obstante clause insofaras Part I of the Arbitration Act is concerned, and stated that the absenceof a similar non-obstante clause, so far as Part II of the Arbitration Actis concerned, is significant. Therefore, this is not even a case wherethere are competing non-obstante clauses and, therefore, Section 21 ofthe Commercial Courts Act must be given full play. According to him,Section 49 of the Arbitration Act also makes it clear that the award shallbe deemed to be a decree of the Court that enforces it. This being thecase, an appeal from such decree is provided by Section 13(1) of theCommercial Courts Act, which, as has been argued by him, speaks of“decisions”, “judgments” and “orders”. He relied upon several judgmentsof this Court and the High Courts to buttress his submissions.

8. Shri Tejas Karia, learned counsel appearing on behalf of theRespondents, on the other hand, relied strongly upon Sections 10 and 11of the Commercial Courts Act. According to the learned counsel, theExplanation to Section 47 of the Arbitration Act, when read with Section11 of the Commercial Courts Act, would make it clear that the non-obstante clause contained in Section 21 of the Commercial Courts Acthas to give way to Section 11, and that since Section 50 of the ArbitrationAct impliedly bars appeals against an application allowing execution of aforeign award, Section 13 would be out of harm’s way, insofar as hisclient is concerned. He relied strongly on the judgment of this Court inFuerst Day Lawson Limited v. Jindal Exports Limited, (2011) 8SCC 333, and stated that the Arbitration Act is a self-contained Code onall matters pertaining to arbitration, which would exclude the applicabilityof the general law contained in Section 13 of the Commercial CourtsAct. Also, according to him, the object of both the Acts is to speedilydetermine matters pertaining to arbitration and/or commercial disputesand, the providing of an extra appeal by the Commercial Courts Act,which is impliedly excluded by the Arbitration Act, would militate against AB

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Athe object of both Acts. He also relied upon various other judgments ofthis Court and the High Courts to buttress these submissions. The learnedcounsel further argued that in cases of enforcement of foreign awardsof an amount below Rs.1 crore, admittedly, no appeal would lie. However,merely because the amount contained in the foreign award in questionwas above Rs.1 crore, it does not stand to reason that an extra appealBwould be provided. That is not the intention of the Commercial CourtsAct. He also exhorted us to dismiss the present appeals, stating that thepresent attempt by the Appellants was one more attempt to delay theinevitable, and referred us to the various proceedings in the U.K. as wellas proceedings in this country to submit that we should dismiss the appealCon this ground alone.

9. Having heard learned counsel for both parties, it is interestingto note that both the Commercial Courts Act as well as the detailedArbitration Amendment Act of 2015, were brought into force on thesame day, i.e. 23[rd] October, 2015, as a result of two reports of the LawDCommission of India.

10. The Statement of Objects and Reasons for the CommercialCourts Act, inter alia, provides:

“The proposal to provide for speedy disposal of high valuecommercial disputes has been under consideration of theEGovernment for quite some time. The high value commercialdisputes involve complex facts and questions of law. Therefore,there is a need to provide for an independent mechanism for theirearly resolution. Early resolution of commercial disputes shallcreate a positive image to the investor world about the independentFand responsive Indian legal system.

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6. It is proposed to introduce the Commercial Courts, CommercialDivision and Commercial Appellate Division of High Courts Bill,2015 to replace the Commercial Courts, Commercial Division andGCommercial Appellate Division of High Courts Ordinance, 2015which inter alia, provides for the following namely:—

(i) constitution of the Commercial Courts at District level exceptfor the territory over which any High Court is having ordinaryoriginal civil jurisdiction; H

(ii) constitution of the Commercial Divisions in those High Courtswhich are already exercising ordinary civil jurisdiction and theyshall have territorial jurisdiction over such areas on which it hasoriginal jurisdiction;

(iii) constitution of the Commercial Appellate Division in all theHigh Courts to hear the appeals against the Orders of theCommercial Courts and the Orders of the Commercial Divisionof the High Court;

(iv) the minimum pecuniary jurisdiction of such Commercial Courtsand Commercial Division is proposed as one crore rupees; and

(v) to amend the Code of Civil Procedure, 1908 as applicable tothe Commercial Courts and Commercial Divisions which shallprevail over the existing High Courts Rules and other provisionsof the Code of Civil Procedure, 1908 so as to improve theefficiency and reduce delays in disposal of commercial cases.

7. The proposed Bill shall accelerate economic growth, improvethe international image of the Indian Justice delivery system, and thefaith of the investor world in the legal culture of the nation.”

11. The relevant provisions of the Commercial Courts Act for thepurpose of deciding these appeals are as follows:

“2. Definitions. (1) In this Act, unless the context otherwiserequires, _

(i) “Specified Value”, in relation to a commercial dispute, shallmean the value of the subject-matter in respect of a suit asdetermined in accordance with section 12 which shall not be lessthan one crore rupees or such higher value, as may be notified bythe Central Government.

4. Constitution of Commercial Division of High Court. - (1)In all High Courts, having ordinary civil jurisdiction, the ChiefJustice of the High Court may, by order, constitute CommercialDivision having one or more Benches consisting of a single Judgefor the purpose of exercising the jurisdiction and powers conferredon it under this Act.

(2) The Chief Justice of the High Court shall nominate such Judgesof the High Court who have experience in dealing with commercialdisputes to be Judges of the Commercial Division.

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SUPREME COURT REPORTS

5. Constitution of Commercial Appellate Division. -(1) Afterissuing notification under sub-section (1) of section 3 or orderunder sub-section (1) of section 4, the Chief Justice of theconcerned High Court shall, by order, constitute CommercialAppellate Division having one or more Division Benches for thepurpose of exercising the jurisdiction and powers conferred on itby the Act.

(2) The Chief Justice of the High Court shall nominate such Judgesof the High Court who have experience in dealing with commercialdisputes 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 aSpecified Value filed in a High Court having ordinary original civiljurisdiction shall be heard and disposed of by the CommercialDivision of that High Court:

Provided that all suits and applications relating to commercialdisputes, stipulated by an Act to lie in a court not inferior to aDistrict Court, and filed or pending on the original side of the HighCourt, shall be heard and disposed of by the Commercial Divisionof the High Court:

Provided further that all suits and applications transferred to theHigh Court by virtue of sub-section (4) of section 22 of the DesignsAct, 2000 or section 104 of the Patents Act, 1970 shall be heardand disposed of by the Commercial Division of the High Court inall the areas over which the High Court exercises ordinary originalcivil jurisdiction.

10. Jurisdiction in respect of arbitration matters.-Where thesubject-matter of an arbitration is a commercial dispute of aSpecified Value and––

(1) If such arbitration is an international commercial arbitration,all applications or appeals arising out of such arbitration under theprovisions of the Arbitration and Conciliation Act, 1996 that havebeen filed in a High Court, shall be heard and disposed of by theCommercial Division where such Commercial Division has beenconstituted in such High Court.

(2) If such arbitration is other than an international commercialarbitration, all applications or appeals arising out of such arbitrationunder the provisions of the Arbitration and Conciliation Act, 1996that have been filed on the original side of the High Court, shall beheard and disposed of by the Commercial Division where suchCommercial Division has been constituted in such High Court.

(3) If such arbitration is other than an international commercialarbitration, all applications or appeals arising out of such arbitrationunder the provisions of the Arbitration and Conciliation Act, 1996that would ordinarily lie before any principal civil court of originaljurisdiction in a district (not being a High Court) shall be filed in,and heard and disposed of by the Commercial Court exercisingterritorial jurisdiction over such arbitration where such CommercialCourt has been constituted.

11. Bar of jurisdiction of Commercial Courts andCommercial Divisions. - Notwithstanding anything containedin this Act, a Commercial Court or a Commercial Division shallnot entertain or decide any suit, application or proceedings relatingto any commercial dispute in respect of which the jurisdiction ofthe civil court is either expressly or impliedly barred under anyother law for the time being in force.

13. Appeals from decrees of Commercial Courts andCommercial Divisions. - (1) Any person aggrieved by thedecision of the Commercial Court or Commercial Division of aHigh Court may appeal to the Commercial Appellate Division ofthat High Court within a period of sixty days from the date ofjudgment or order, as the case may be:

Provided that an appeal shall lie from such orders passed by aCommercial Division or a Commercial Court that are specificallyenumerated under Order XLIII of the Code of Civil Procedure,1908 as amended by this Act and section 37 of the Arbitration andConciliation Act, 1996.

(2) Notwithstanding anything contained in any other law for thetime being in force or Letters Patent of a High Court, no appealshall lie from any order or decree of a Commercial Division orCommercial Court otherwise than in accordance with theprovisions of this Act.

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A14. Expeditious disposal of appeals. - The CommercialAppellate Division shall endeavour to dispose of appeals filedbefore it within a period of six months from the date of filing ofsuch appeal.

15. Transfer of pending cases. - (1) All suits and applications,Bincluding applications under the Arbitration and Conciliation Act,1996, relating to a commercial dispute of a Specified Value pendingin a High Court where a Commercial Division has been constituted,shall be transferred to the Commercial Division.

(2) All suits and applications, including applications under theCArbitration and Conciliation Act, 1996, relating to a commercialdispute of a Specified Value pending in any civil court in any districtor area in respect of which a Commercial Court has beenconstituted, shall be transferred to such Commercial Court:

Provided that no suit or application where the final judgment hasDbeen reserved by the Court prior to the constitution of theCommercial Division or the Commercial Court shall be transferredeither under sub-section (1) or sub-section (2).

(3) Where any suit or application, including an application underthe Arbitration and Conciliation Act, 1996, relating to a commercialEdispute of Specified Value shall stand transferred to theCommercial Division or Commercial Court under sub-section (1)or sub-section (2), the provisions of this Act shall apply to thoseprocedures that were not complete at the time of transfer.

(4) The Commercial Division or Commercial Court, as the caseFmay be, may hold case management hearings in respect of suchtransferred suit or application in order to prescribe new timelinesor issue such further directions as may be necessary for a speedyand efficacious disposal of such suit or application in accordancewith Order XIV-A of the Code of Civil Procedure, 1908:

Provided that the proviso to sub-rule (1) of Rule 1 of Order V ofGthe Code of Civil Procedure, 1908 shall not apply to such transferredsuit or application and the court may, in its discretion, prescribe anew time period within which the written statement shall be filed.

(5) In the event that such suit or application is not transferred inthe manner specified in sub-section (1), sub-section (2) or sub- H

section (3), the Commercial Appellate Division of the High Courtmay, on the application of any of the parties to the suit, withdrawsuch suit or application from the court before which it is pendingand transfer the same for trial or disposal to the CommercialDivision or Commercial Court, as the case may be, having territorialjurisdiction over such suit, and such order of transfer shall be finaland binding.

21. Act to have overriding effect. - Save as otherwise provided,the provisions of this Act shall have effect, notwithstandinganything inconsistent therewith contained in any other law for thetime being in force or in any instrument having effect by virtue ofany law for the time being in force other than this Act.”

12. The Arbitration and Conciliation Act, 1996, repealed theArbitration 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 domesticarbitration, international commercial arbitration and enforcementof foreign arbitral awards as also to define the law relating toconciliation and for matters connected therewith or incidentalthereto.”

The said Act is in four parts. Part I, with which we are notconcerned in the present appeals, speaks of domestic as well asinternational commercial arbitration that takes place in India. Part II,with which we are directly concerned, speaks of enforcement of foreignawards. A foreign award is defined in Section 44 as meaning an arbitralaward on differences between persons arising out of legal relationshipsconsidered commercial, inter alia, in pursuance of an agreement inwriting for arbitration to which the New York Convention set forth in theFirst Schedule applies. Sections 49 and 50, with which we are directlyconcerned, read as under:

“49. Enforcement of foreign awards.—Where the Court issatisfied that the foreign award is enforceable under this Chapter,the award shall be deemed to be a decree of that Court.

50. Appealable orders.—(1) An appeal shall lie from the orderrefusing to –

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A(a) refer the parties to arbitration under section 45; (b) enforce a foreign award under section 48, to the court authorisedby law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appealunder this section, but nothing in this section shall affect or takeBaway any right to appeal to the Supreme Court.”

13. By the Amendment Act of 2015, pursuant to a LawCommission Report, large scale amendments were made to variousprovisions contained in Part I. So far as Part II is concerned, anexplanation was added to Section 47 which reads as under:

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“Explanation.—In this section and in the sections following inthis Chapter, “Court” means the High Court having originaljurisdiction to decide the questions forming the subject-matter ofthe arbitral award if the same had been the subject-matter of asuit on its original civil jurisdiction and in other cases, in the HighDCourt having jurisdiction to hear appeals from decrees of courtssubordinate to such High Court.”

14. Section 13(1) of the Commercial Courts Act, with which weare immediately concerned in these appeals, is in two parts. The mainprovision is, as has been correctly submitted by Shri Giri, a provisionEwhich provides for appeals from judgments, orders and decrees of theCommercial Division of the High Court. To this main provision, anexception is carved out by the proviso. The primary purpose of a provisois to qualify the generality of the main part by providing an exception,which has been set out with great felicity in CIT v. Indo-MercantileFBank Ltd., 1959 Supp (2) SCR 256 at 266-267, thus:

“The proper function of a proviso is that it qualifies the generalityof the main enactment by providing an exception and taking outas it were, from the main enactment, a portion which, but for theproviso would fall within the main enactment. Ordinarily it is foreignto the proper function of a proviso to read it as providing somethingGby way of an addendum or dealing with a subject which is foreignto the main enactment. “It is a fundamental rule of constructionthat a proviso must be considered with relation to the principalmatter to which it stands as a proviso”. Therefore it is to beconstrued harmoniously with the main enactment. (Per Das, C.J.

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in Abdul Jabar Butt v. State of Jammu & Kashmir [(1957) SCR51, 59]). Bhagwati, J., in Ram Narain Sons Ltd. v. AssistantCommissioner of Sales Tax [(1955) 2 SCR 483, 493] said:

“It is a cardinal rule of interpretation that a proviso to a particularprovision of a statute only embraces the field which is coveredby the main provision. It carves out an exception to the mainprovision to which it has been enacted as a proviso and to noother.”

Lord Macmillan in Madras & Southern Maharatta RailwayCo. v. Bezwada Municipality [(1944) LR 71 IA 113, 122] laiddown the sphere of a proviso as follows:

“The proper function of a proviso is to except and deal with acase which would otherwise fall within the general languageof the main enactment, and its effect is confined to that case.Where, as in the present case, the language of the mainenactment is clear and unambiguous, a proviso can have norepercussion on the interpretation of the main enactment, soas to exclude from it by implication what clearly falls within itsexpress terms.”

The territory of a proviso therefore is to carve out an exception tothe main enactment and exclude something which otherwise wouldhave been within the section. It has to operate in the same fieldand if the language of the main enactment is clear it cannot beused for the purpose of interpreting the main enactment or toexclude by implication what the enactment clearly says unlessthe words of the proviso are such that that is its necessary effect.(Vide also Corporation of City of Toronto v. Attorney-Generalfor Canada [(1946) AC 32, 37] .)”

15. The proviso goes on to state that an appeal shall lie from suchorders passed by the Commercial Division of the High Court that arespecifically enumerated under Order XLIII of the Code of Civil ProcedureCode, 1908, and Section 37 of the Arbitration Act. It will at once benoticed that orders that are not specifically enumerated under OrderXLIII of the CPC would, therefore, not be appealable, and appeals thatare mentioned in Section 37 of the Arbitration Act alone are appeals thatcan be made to the Commercial Appellate Division of a High Court.

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A16. Thus, an order which refers parties to arbitration under Section8, not being appealable under Section 37(1)(a), would not be appealableunder Section 13(1) of the Commercial Courts Act. Similarly, an appealrejecting a plea referred to in sub-sections (2) and (3) of Section 16 ofthe Arbitration Act would equally not be appealable under Section 37(2)(a)and, therefore, under Section 13(1) of the Commercial Courts Act.B

17. So far, so good. However, it is Shri Giri’s main argument thatSection 50 of the Arbitration Act does not find any mention in the provisoto Section 13(1) of the Commercial Courts Act and, therefore,notwithstanding that an appeal would not lie under Section 50 of theArbitration Act, it would lie under Section 13(1) of the Commercial CourtsCAct.

18. To answer this question, it is necessary to advert to the judgmentin Fuerst Day Lawson (supra). The common question that arose forconsideration in the batch of cases before the Court was whether anorder, though not appealable under Section 50 of the Arbitration ActDwould, nevertheless be subject to appeal under the Letters Patent of theHigh Court. In answering this question, this Court exhaustively reviewedthe authorities and then stated, in paragraph 36, that the decisions noticedso far lay down certain broad principles. We are directly concernedwith the principle laid down in sub-section (vii), which reads as under:

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“(vii) The exception to the aforementioned rule is where the specialAct sets out a self-contained code and in that event the applicabilityof the general law procedure would be impliedly excluded. Theexpress provision need not refer to or use the words “letterspatent” but if on a reading of the provision it is clear that all furtherFappeals are barred then even a letters patent appeal would bebarred.”

(at page 350)

19. One of the submissions made before this Court in that case isthe identical submission made by Shri Giri before us that Section 37Gcontains the expression “and from no others” which is conspicuous byits absence in Section 50 of the Arbitration Act. This was answered bythe Court as follows:

“60. It is also evident that Part I and Part II of the Act are quiteseparate and contain provisions that act independently in their H

respective fields. The opening words of Section 2 i.e. the definitionclause in Part I, make it clear that meanings assigned to the termsand expressions defined in that section are for the purpose of thatpart alone. Section 4 which deals with waiver of right to object isalso specific to Part I of the Act. Section 5 dealing with extent ofjudicial intervention is also specific to Part I of the Act. Section 7that defines “arbitration agreement” in considerable detail alsoconfines the meaning of the term to Part I of the Act alone. Section8 deals with the power of a judicial authority to refer parties toarbitration where there is an arbitration agreement and thisprovision too is relatable to Part I alone (corresponding provisionsare independently made in Sections 45 and 54 of Chapters I andII, respectively of Part II). The other provisions in Part I by theirvery nature shall have no application insofar as the two chaptersof Part II are concerned.

61. Once it is seen that Part I and Part II of the Act are quitedifferent in their object and purpose and the respective schemes,it naturally follows that Section 37 in Part I (analogous to Section39 of the 1940 Act) is not comparable to Section 50 in Part II ofthe Act. This is not because, as Mr Sundaram contends Section37 has the words in parenthesis “and from no others” which arenot to be found in Section 50 of the Act. Section 37 and Section50 are not comparable because they belong to two differentstatutory schemes. Section 37 containing the provision of appealis part of a much larger framework that, as seen above, hasprovisions for the complete range of law concerning domesticarbitration and international commercial arbitration. Section 50 onthe other hand contains the provision of appeal in a much limitedframework, concerned only with the enforcement of the NewYork Convention Awards. In one sense, the two sections, thougheach containing the appellate provision belong to different statutes.”

(at pages 356-357)

The Court then went into the legislative policy which led to theenactment of Section 50 of the Arbitration Act. It found that under theerstwhile Foreign Awards Act, a formal decree had to be passed interms of the foreign award, and there was a possibility that such decreemay be in excess of or not in accordance with the award. It was for this A

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Areason that an appeal lay under Section 6(2) of the Foreign Awards Acteven against a decree enforcing the foreign award. However, this wasdone away with in the Arbitration Act, by enacting Section 49, whichmakes a radical change by which the foreign award itself is deemed tobe a decree of the Court. The exclusion of an appeal in such cases hasthus to be understood in the light of the change in law introduced byBSection 49 of the Act (see paragraphs 74 and 75 of the judgment). Itmay be added that the aforesaid amendment has speeded up the processof enforcing foreign awards by taking away the right of appeal in caseswhere the Single Judge decides in favour of enforcing a foreign award.

20. The Court went on to discuss this Court’s judgment in UnionCof India vs. Mohindra Supply Company, (1962) 3 SCR 497, andultimately concluded:

“89. It is, thus, to be seen that the Arbitration Act, 1940, from itsinception and right through to 2004 (in P.S. Sathappan [(2004) 11SCC 672]) was held to be a self-contained code. Now, if theDArbitration Act, 1940 was held to be a self-contained code, onmatters pertaining to arbitration, the Arbitration and ConciliationAct, 1996, which consolidates, amends and designs the law relatingto arbitration to bring it, as much as possible, in harmony with theUncitral Model must be held only to be more so. Once it is heldEthat the Arbitration Act is a self-contained code and exhaustive,then it must also be held, using the lucid expression of Tulzapurkar,J., that it carries with it “a negative import that only such acts asare mentioned in the Act are permissible to be done and acts orthings not mentioned therein are not permissible to be done”. Inother words, a letters patent appeal would be excluded by theFapplication of one of the general principles that where the specialAct sets out a self-contained code the applicability of the generallaw procedure would be impliedly excluded.

90. We, thus, arrive at the conclusion regarding the exclusion of aletters patent appeal in two different ways; one, so to say, on aGmicro basis by examining the scheme devised by Sections 49 and50 of the 1996 Act and the radical change that it brings about inthe earlier provision of appeal under Section 6 of the 1961 Actand the other on a macro basis by taking into account the natureand character of the 1996 Act as a self-contained and exhaustivecode in itself.H

91. In light of the discussions made above, it must be held that noletters patent appeal will lie against an order which is not appealableunder Section 50 of the Arbitration and Conciliation Act, 1996.”

(at page 371)

21. Given the judgment of this Court in Fuerst Day Lawson(supra), which Parliament is presumed to know when it enacted theArbitration Amendment Act, 2015, and given the fact that no changewas made in Section 50 of the Arbitration Act when the CommercialCourts Act was brought into force, it is clear that Section 50 is a provisioncontained in a self-contained code on matters pertaining to arbitration,and which is exhaustive in nature. It carries the negative import mentionedin paragraph 89 of Fuerst Day Lawson (supra) that appeals which arenot mentioned therein, are not permissible. This being the case, it isclear that Section 13(1) of the Commercial Courts Act, being a generalprovision vis-à-vis arbitration relating to appeals arising out of commercialdisputes, would obviously not apply to cases covered by Section 50 ofthe Arbitration Act.

22. However, the question still arises as to why Section 37 of theArbitration Act was expressly included in the proviso to Section 13(1) ofthe Commercial Courts Act, which is equally a special provision of appealcontained in a self-contained code, which in any case would be outsideSection 13(1) of the Commercial Courts Act. One answer is that thiswas done ex abundanti cautela. Another answer may be that as Section37 itself was amended by the Arbitration Amendment Act, 2015, whichcame into force on the same day as the Commercial Courts Act,Parliament thought, in its wisdom, that it was necessary to emphasisethat the amended Section 37 would have precedence over the generalprovision contained in Section 13(1) of the Commercial Courts Act.Incidentally, the amendment of 2015 introduced one more category intothe category of appealable orders in the Arbitration Act, namely, acategory where an order is made under Section 8 refusing to refer partiesto arbitration. Parliament may have found it necessary to emphasizethe fact that an order referring parties to arbitration under Section 8 isnot appealable under Section 37(1)(a) and would, therefore, not beappealable under Section 13(1) of the Commercial Courts Act. Whatevermay be the ultimate reason for including Section 37 of the ArbitrationAct in the proviso to Section 13(1), the ratio decidendi of the judgmentin Fuerst Day Lawson (supra) would apply, and this being so, appeals A

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Afiled under Section 50 of the Arbitration Act would have to follow thedrill of Section 50 alone.

23. This, in fact, follows from the language of Section 50 itself. Inall arbitration cases of enforcement of foreign awards, it is Section 50alone that provides an appeal. Having provided for an appeal, the forumBof appeal is left “to the Court authorized by law to hear appeals fromsuch orders”. Section 50 properly read would, therefore, mean that ifan appeal lies under the said provision, then alone would Section 13(1)of the Commercial Courts Act be attracted as laying down the forumwhich will hear and decide such an appeal.

C24. In fact, in Sumitomo Corporation vs. CDC FinancialServices (Mauritius) Ltd. and Ors., (2008) 4 SCC 91, this Courtadverted 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 isprovided for in Section 50, the Court authorized by law to hear suchappeals would then be found in Sections 10(1)(a) and 10F of theDCompanies Act. The present case is a parallel instance of Section 50 ofthe Arbitration Act providing for an appeal, and Section 13(1) of theCommercial Courts Act providing the forum for such appeal. Only, inthe present case, as no appeal lies under Section 50 of the ArbitrationAct, no forum can be provided for.

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25. A recent judgment of this Court in Arun Dev Upadhyaya v.Integrated Sales Service Ltd., (2016) 9 SCC 524 at 537 was advertedto by counsel for both sides. On facts, in this case, the Single Judge hadrefused to enforce a foreign award in favour of the appellants. TheRespondents, in that case, claimed that an appeal from the Single JudgeFwas not maintainable in view of the abolition of the letters patent appealby a Maharashtra Act of 1986. This Court, following Fuerst DayLawson (supra), repelled the aforesaid contention in the followingterms:

“25. The aforesaid provision clearly lays down that a forum isGcreated i.e. Commercial Appellate Division. Section 50(1)(b) ofthe 1996 Act provides for an appeal. Section 50(1)(b) has notbeen amended by the Act that has come into force on 23-10-2015. Thus, an appeal under Section 50(1)(b) of the 1996 Actbefore the Division Bench is maintainable.

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26. Thus analysed, we find that the impugned judgment [IntegratedSales Services Ltd. v. DMC Management Consultants Ltd.,2016 SCC OnLine Bom 4445] of the learned Single Judge underSection 50(1)(b) of the 1996 Act is passed in the Original Side ofthe High Court. Be that as it may, under Section 13 of the Act, theSingle Judge has taken the decision. Section 13 bars an appealunder the Letters Patent unless an appeal is provided under the1996 Act. Such an appeal is provided under Section 5 of the Act.The letters patent appeal could not have been invoked if Section50 of the 1996 Act would not have provided for an appeal. But itdoes provide for an appeal. A conspectus reading of Sections 5and 13 of the Act and Section 50 of the 1996 Act which hasremained unamended leads to the irresistible conclusion that aletters patent appeal is maintainable before the Division Bench. Ithas to be treated as an appeal under Section 50(1)(b) of the 1996Act and has to be adjudicated within the said parameters.”

26. What is important to note is that it is Section 50 that providesfor an appeal, and not the letters patent, given the subject matter ofappeal. Also, the appeal has to be adjudicated within the parameters ofSection 50 alone. Concomitantly, where Section 50 excludes an appeal,no such appeal will lie.

27. In this view of the case, it is unnecessary to advert to ShriGiri’s arguments based on Section 21 of the Commercial Courts Act.Section 21 would only apply if Section 13(1) were to apply in the firstplace, which, as has been found, cannot be held to apply for the reasonsgiven hereinabove. Equally, it is unnecessary to advert to the argumentsof the learned counsel for the Appellants based on Section 11 of theCommercial Courts Act.

28. The matter can be looked at from a slightly different angle.Given the objects of both the statutes, it is clear that arbitration itself ismeant to be a speedy resolution of disputes between parties. Equally,enforcement of foreign awards should take place as soon as possible ifIndia is to remain as an equal partner, commercially speaking, in theinternational community. In point of fact, the raison d’être for theenactment of the Commercial Courts Act is that commercial disputesinvolving high amounts of money should be speedily decided. Given theobjects of both the enactments, if we were to provide an additional appeal, AB

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Awhen Section 50 does away with an appeal so as to speedily enforceforeign awards, we would be turning the Arbitration Act and theCommercial Courts Act on their heads. Admittedly, if the amountcontained in a foreign award to be enforced in India were less thanRs. one crore, and a Single Judge of a High Court were to enforce suchaward, no appeal would lie, in keeping with the object of speedyBenforcement of foreign awards. However, if, in the same factcircumstance, a foreign award were to be for Rs.one crore or more, ifthe Appellants are correct, enforcement of such award would be furtherdelayed by providing an appeal under Section 13(1) of the CommercialCourts Act. Any such interpretation would lead to absurdity, and wouldCbe directly contrary to the object sought to be achieved by the CommercialCourts Act, viz., speedy resolution of disputes of a commercial natureinvolving a sum of Rs.1 crore and over. For this reason also, we feelthat Section 13(1) of the Commercial Courts Act must be construed inaccordance with the object sought to be achieved by the Act. Anyconstruction of Section 13 of the Commercial Courts Act, which wouldDlead to further delay, instead of an expeditious enforcement of a foreignaward must, therefore, be eschewed. Even on applying the doctrine ofharmonious construction of both statutes, it is clear that they are bestharmonized by giving effect to the special statute i.e. the ArbitrationAct, vis-à-vis the more general statute, namely the Commercial CourtsEAct, being left to operate in spheres other than arbitration.

29. The appeals are, therefore, dismissed with no order as to costs.

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Appeals dismissed.

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