# KANDLA EXPORT CORPORATION & ANR v. M/S OCI CORPORATION & ANR

- **Citation:** [2018] 1 S.C.R. 915
- **Court:** Supreme Court of India
- **Decided:** 2018-02-07
- **Case number:** Civil Appeal Nos. 1661-1663 of 2018
- **Bench:** R. F. Nariman, Navin Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kandla-export-corporation-anr-v-m-s-oci-corporation-anr-32858
- **Pages:** 22

## Headnote

Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015:
s.13(1) - Appeal under - Against enforcement of foreign award
- Maintainability of - Commercial Division of High Court passed
order enforcing foreign award - Appeal against u/s. 13(1) -
Dismissed on the ground that since an appeal did not lie from a
judgment enforcing a foreign award under s. 50 of Arbitration Act,
no such appeal would be maintainable under Commercial Courts
Act - On appeal, held: s.50 is a provision contained in a selfcontained code on matters of arbitration - s.13(1) is a general
provision vis-a-vis arbitration - Applying the doctrine of harmonious
construction of both the statutes, they are best harmonised by giving
effect to the special statute i.e. Arbitration Act vis-a-vis the more
general statute i.e. Commercial Courts Act - Therefore, an appeal
not maintainable u/s. 50 of Arbitration Act would not be maintainable
u/s. 13(1) of Commercial Courts Act - An interpretation contrary to
this would be directly contrary to the object sought to be achieved
by Commercial Courts Act viz. speedy resolution of disputes -
Arbitration and Conciliation Act 1996 - s.50 - Interpretation of
Statutes - 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 matters
pertaining to arbitration, and which is exhaustive in nature. It
carries the negative import mentioned in*Fuerst Day Lawson*
 [2018] 1 S.C.R. 915
 915
A
B
C
D
E
F
G
H
916
SUPREME COURT REPORTS
[2018] 1 S.C.R.
case that appeals which are not mentioned in the Act, are not
permissible. This being the case, it is clear that Section 13(1) of
the Commercial Court, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 (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. [Para
21] [933-B-D]
2. 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 to refer parties to arbitration. Parliament may have found
it necessary to emphasize the fact that an order referring parties
to arbitration under Section 8 is not appealable under Section
37(1)(a) and would, therefore, not be appealable under Section
13(1) of the Commercial Courts Act. Whatever may be the
ultimate reason for including Section 37 of the Arbitration Act in
the proviso to Section 13(1), the ratio decidendi of the judgment
in *Fuerst Day Lawson case would apply, and this being so, appeals
filed under Section 50 of the Arbitration Act would have to follow
the drill of Section 50 alone. [Para 22] [933-E-H; 934-A]
3. This, follows from the language of Section 50 itself. 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
A
B
C
D
E
F
G
H
917
appeals

## Text

_Characters 0–39,822 of 50,486. This is a partial read: ask again with offset=39822 for what follows._

A
B
C
D
E
F
G
H
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 Commercial
Appellate Division of High Courts Act, 2015:
s.13(1) - Appeal under - Against enforcement of foreign award
- Maintainability of - Commercial Division of High Court passed
order enforcing foreign award - Appeal against u/s. 13(1) -
Dismissed on the ground that since an appeal did not lie from a
judgment enforcing a foreign award under s. 50 of Arbitration Act,
no such appeal would be maintainable under Commercial Courts
Act - On appeal, held: s.50 is a provision contained in a selfcontained code on matters of arbitration - s.13(1) is a general
provision vis-a-vis arbitration - Applying the doctrine of harmonious
construction of both the statutes, they are best harmonised by giving
effect to the special statute i.e. Arbitration Act vis-a-vis the more
general statute i.e. Commercial Courts Act - Therefore, an appeal
not maintainable u/s. 50 of Arbitration Act would not be maintainable
u/s. 13(1) of Commercial Courts Act - An interpretation contrary to
this would be directly contrary to the object sought to be achieved
by Commercial Courts Act viz. speedy resolution of disputes -
Arbitration and Conciliation Act 1996 - s.50 - Interpretation of
Statutes - 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 matters
pertaining to arbitration, and which is exhaustive in nature. It
carries the negative import mentioned in*Fuerst Day Lawson*
 [2018] 1 S.C.R. 915
 915
A
B
C
D
E
F
G
H
916
SUPREME COURT REPORTS
[2018] 1 S.C.R.
case that appeals which are not mentioned in the Act, are not
permissible. This being the case, it is clear that Section 13(1) of
the Commercial Court, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 (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. [Para
21] [933-B-D]
2. 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 to refer parties to arbitration. Parliament may have found
it necessary to emphasize the fact that an order referring parties
to arbitration under Section 8 is not appealable under Section
37(1)(a) and would, therefore, not be appealable under Section
13(1) of the Commercial Courts Act. Whatever may be the
ultimate reason for including Section 37 of the Arbitration Act in
the proviso to Section 13(1), the ratio decidendi of the judgment
in *Fuerst Day Lawson case would apply, and this being so, appeals
filed under Section 50 of the Arbitration Act would have to follow
the drill of Section 50 alone. [Para 22] [933-E-H; 934-A]
3. This, follows from the language of Section 50 itself. 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
A
B
C
D
E
F
G
H
917
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. [Para 23] [934-B]
4. Given the objects of both the statutes, it is clear that
arbitration itself is meant to be a speedy resolution of disputes
between parties. Equally, enforcement of foreign awards should
take place as soon as possible if India is to remain as an equal
partner, commercially speaking, in the international community.
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 an additional appeal is provided
when Section 50 does away with an appeal so as to speedily enforce
foreign awards, it would be turning the Arbitration Act and the
Commercial Courts Act on their heads. [Para 28] [935-G-H;
936-A]
5. 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, 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.1 crore and over. For this reason also, Section 13(1) of the
Commercial Courts Act must be construed in accordance with
the object sought to be achieved by the Act. Any construction of
Section 13 of the Commercial Courts Act, which would lead to
further delay, instead of an expeditious enforcement of a foreign
award must, therefore, be eschewed. [Para 28] [936-B-D]
 6. Even on applying the doctrine of harmonious construction
of both statutes, it is clear that they are best harmonized by giving
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR.
A
B
C
D
E
F
G
H
918
SUPREME COURT REPORTS
[2018] 1 S.C.R.
effect to the special statute i.e. the Arbitration Act, vis-à-vis the
more general statute, namely the Commercial Courts Act, being
left to operate in spheres other than arbitration. [Para 28]
[936-D-E]
*Fuerst Day Lawson Limited v. Jindal Exports Limited
(2011) 8 SCC 333 : [2011] 11 SCR 1 ; Sumitomo
Corporation 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.
CIT v. Indo-Mercantile Bank Ltd. [1959] 2 Suppl. SCR
256 ; Union of India v. Mohindra Supply Company
[1962] 3 SCR 497- referred to.
Case Law Reference
[2011] 11 SCR 1
relied on
Para 8
[1959] 2 Suppl. SCR 256
referred to
Para 14
[1962] 3 SCR 497
referred to
Para 20
[2008] 3 SCR 309
relied on
Para 24
[2016] 7 SCR 976
relied on
Para 25
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 16611663 of 2018.
From the Judgment and Order dated 28.09.2017 of the High Court
of Gujarat at Ahmedabad in First Appeal Nos. 3096, 3097 and 3098 of
2017.
V. Giri, Sr. Adv, Mahesh Agarwal, Archit Jani, Kirti Kumar
Thakkar, Rishabh Parikh, Nishant Rao, Rajesh Kumar, E. C. Agrawala,
Advs for the Appellants.
Tejas Karia, Ms. Ananya Aggarwal, Ms. Surabhi Lal, Ravinder
Nijhawan, S. S. Shroff, Advs for the Respondents.
A
B
C
D
E
F
G
H
919
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 whether
an appeal, not maintainable under Section 50 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as "the Arbitration Act"),
is nonetheless maintainable under Section 13(1) of the Commercial
Courts, Commercial Division and Commercial Appellate Division of High
Courts Act, 2015 (hereinafter referred to as "the Commercial Courts
Act").
3. The brief facts necessary to decide the aforesaid issue are as
follows. On 28th April, 2014, an arbitration award 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 under Section 48 of the Arbitration Act on 29th June, 2015 by
the Respondents before the District Court, Gandhidham-Kutch. On 7th
March, 2016, the Appellants filed their objections to the said petition. On
12th September, 2016, the Respondents preferred an application before
the High Court of Gujarat, under Section 15(5) of the Commercial Courts
Act, for an appropriate order to transfer the execution petition to the
High Court. By an order dated 11th November, 2016, the High Court
transferred the aforesaid execution petition to the Commercial Division
of the High Court of Gujarat, and a Special Leave Petition against the
said order was dismissed by this Court on 3rd March, 2017.
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR.
A
B
C
D
E
F
G
H
920
SUPREME COURT REPORTS
[2018] 1 S.C.R.
6. On 8th August, 2017, the High Court of Gujarat dismissed the
objections that were filed by the Appellants and allowed the execution
petition filed by the Respondents. Being aggrieved by this judgment, the
Appellants filed an appeal under the Commercial Courts Act, which
was dismissed by the impugned judgment dated 28th September, 2017,
stating that the Commercial Courts Act did not provide any additional
right of appeal which is not otherwise available to the Appellants under
the provisions of the Arbitration Act. Considering the fact that Section
50 of the Arbitration Act only provided for an appeal in case a petition to
enforce a foreign award was rejected, the High Court held, keeping in
view the legislative policy of the Arbitration Act, (which was to speedily
determine matters relating to enforcement of foreign awards) that since
an appeal did not lie from a judgment enforcing a foreign award under
the said section, no such appeal would be maintainable under the
Commercial Courts Act.
7. Shri V. Giri, learned senior counsel appearing on behalf of the
Appellants, has taken us through the Commercial Courts Act in
painstaking detail. He relied upon Sections 3 to 7 of the said Act and
then took us to Section 13. According to the learned counsel, Section
13 provided an appeal to any person aggrieved by the decision of a
Commercial Division of a High Court, and as Section 50 of the Arbitration
Act found no place in the proviso to Section 13(1) of the Commercial
Courts Act, it is clear that the wide language of Section 13(1) would
confer a right of appeal, notwithstanding anything contained in Section
50 of the Arbitration Act. This, according to him, became even clearer
when read with 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
A
B
C
D
E
F
G
H
921
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 accordance with the provisions
of the Act. According to the learned counsel, the scheme of the Act
would show that, in all matters over Rs.1 crore, the legislative intent is to
provide an appeal, given the stakes involved, which will, under Section
14, be expeditiously disposed of within a period of 6 months from the
date of filing of such appeal. Learned counsel also referred us to Section
5 of the Arbitration Act, which contains a non-obstante clause insofar
as Part I of the Arbitration Act is concerned, and stated that the absence
of a similar non-obstante clause, so far as Part II of the Arbitration Act
is concerned, is significant. Therefore, this is not even a case where
there are competing non-obstante clauses and, therefore, Section 21 of
the Commercial Courts Act must be given full play. According to him,
Section 49 of the Arbitration Act also makes it clear that the award shall
be deemed to be a decree of the Court that enforces it. This being the
case, an appeal from such decree is provided by Section 13(1) of the
Commercial Courts Act, which, as has been argued by him, speaks of
"decisions", "judgments" and "orders". He relied upon several judgments
of this Court and the High Courts to buttress his submissions.
8. Shri Tejas Karia, learned counsel appearing on behalf of the
Respondents, on the other hand, relied strongly upon Sections 10 and 11
of the Commercial Courts Act. According to the learned counsel, the
Explanation to Section 47 of the Arbitration Act, when read with Section
11 of the Commercial Courts Act, would make it clear that the nonobstante clause contained in Section 21 of the Commercial Courts Act
has to give way to Section 11, and that since Section 50 of the Arbitration
Act impliedly bars appeals against an application allowing execution of a
foreign award, Section 13 would be out of harm's way, insofar as his
client is concerned. He relied strongly on the judgment of this Court in
Fuerst Day Lawson Limited v. Jindal Exports Limited, (2011) 8
SCC 333, and stated that the Arbitration Act is a self-contained Code on
all matters pertaining to arbitration, which would exclude the applicability
of the general law contained in Section 13 of the Commercial Courts
Act. Also, according to him, the object of both the Acts is to speedily
determine matters pertaining to arbitration and/or commercial disputes
and, the providing of an extra appeal by the Commercial Courts Act,
which is impliedly excluded by the Arbitration Act, would militate against
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR. [R.F. NARIMAN, J.]
A
B
C
D
E
F
G
H
922
SUPREME COURT REPORTS
[2018] 1 S.C.R.
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 Rs.1 crore, admittedly, no appeal would lie. However,
merely because the amount contained in the foreign award in question
was above Rs.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 Law
Commission of India.
10. The Statement of Objects and Reasons for the Commercial
Courts Act, inter alia, provides:
"The proposal to provide for speedy disposal of high value
commercial disputes has been under consideration of the
Government for quite some time. The high value commercial
disputes involve complex facts and questions of law. Therefore,
there is a need to provide for an independent mechanism for their
early resolution. Early resolution of commercial disputes shall
create a positive image to the investor world about the independent
and responsive Indian legal system.
xxx
6. It is proposed to introduce the Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Bill,
2015 to replace the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Ordinance, 2015
which inter alia, provides for the following namely:-
(i) constitution of the Commercial Courts at District level except
for the territory over which any High Court is having ordinary
original civil jurisdiction;
A
B
C
D
E
F
G
H
923
(ii) constitution of the Commercial Divisions in those High Courts
which are already exercising ordinary civil jurisdiction and they
shall have territorial jurisdiction over such areas on which it has
original jurisdiction;
(iii) constitution of the Commercial Appellate Division in all the
High Courts to hear the appeals against the Orders of the
Commercial Courts and the Orders of the Commercial Division
of the High Court;
(iv) the minimum pecuniary jurisdiction of such Commercial Courts
and Commercial Division is proposed as one crore rupees; and
(v) to amend the Code of Civil Procedure, 1908 as applicable to
the Commercial Courts and Commercial Divisions which shall
prevail over the existing High Courts Rules and other provisions
of the Code of Civil Procedure, 1908 so as to improve the
efficiency and reduce delays in disposal of commercial cases.
7. The proposed Bill shall accelerate economic growth, improve
the international image of the Indian Justice delivery system, and the
faith of the investor world in the legal culture of the nation."
11. The relevant provisions of the Commercial Courts Act for the
purpose of deciding these appeals are as follows:
"2. Definitions. (1) In this Act, unless the context otherwise
requires, _
(i) "Specified Value", in relation to a commercial dispute, shall
mean the value of the subject-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.
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR. [R.F. NARIMAN, J.]
A
B
C
D
E
F
G
H
924
SUPREME COURT REPORTS
[2018] 1 S.C.R.
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 experience in dealing with commercial
disputes 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 a
Specified Value filed in a High Court having ordinary original civil
jurisdiction shall be heard and disposed of by the Commercial
Division of that High Court:
Provided that all suits and applications relating to commercial
disputes, stipulated by an Act to lie in a court not inferior to a
District Court, and filed or pending on the original side of the High
Court, shall be heard and disposed of by the Commercial Division
of the High Court:
Provided further that all suits and applications transferred to the
High Court by virtue of sub-section (4) of section 22 of the Designs
Act, 2000 or section 104 of the Patents Act, 1970 shall be heard
and disposed of by the Commercial Division of the High Court in
all the areas over which the High Court exercises ordinary original
civil jurisdiction.
10. Jurisdiction in respect of arbitration matters.-Where the
subject-matter of an arbitration is a commercial dispute of a
Specified Value and--
(1) If such arbitration is an international commercial arbitration,
all applications or appeals arising out of such arbitration under the
provisions of the Arbitration and Conciliation Act, 1996 that have
been filed in a High Court, shall be heard and disposed of by the
Commercial Division where such Commercial Division has been
constituted in such High Court.
A
B
C
D
E
F
G
H
925
(2) If such arbitration is other than an international commercial
arbitration, all applications or appeals arising out of such arbitration
under the provisions of the Arbitration and Conciliation Act, 1996
that have been filed on the original side of the High Court, shall be
heard and disposed of by the Commercial Division where such
Commercial Division has been constituted in such High Court.
(3) If such arbitration is other than an international commercial
arbitration, all applications or appeals arising out of such arbitration
under the provisions of the Arbitration and Conciliation Act, 1996
that would ordinarily lie before any principal civil court of original
jurisdiction in a district (not being a High Court) shall be filed in,
and heard and disposed of by the Commercial Court exercising
territorial jurisdiction over such arbitration where such Commercial
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 order or decree of a Commercial Division or
Commercial Court otherwise than in accordance with the
provisions of this Act.
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR. [R.F. NARIMAN, J.]
A
B
C
D
E
F
G
H
926
SUPREME COURT REPORTS
[2018] 1 S.C.R.
14. Expeditious disposal of appeals. - The Commercial
Appellate Division shall endeavour to dispose of appeals filed
before it within a period of six months from the date of filing of
such appeal.
15. Transfer of pending cases. - (1) All suits and applications,
including applications under the Arbitration and Conciliation Act,
1996, relating to a commercial dispute of a Specified Value pending
in 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 the
Arbitration and Conciliation Act, 1996, relating to a commercial
dispute of a Specified Value pending in any civil court in any district
or area in respect of which a Commercial Court has been
constituted, shall be transferred to such Commercial Court:
Provided that no suit or application where the final judgment has
been reserved by the Court prior to the constitution of the
Commercial Division or the Commercial Court shall be transferred
either under sub-section (1) or sub-section (2).
(3) Where any suit or application, including an application under
the Arbitration and Conciliation Act, 1996, relating to a commercial
dispute of Specified Value shall stand transferred to the
Commercial Division or Commercial Court under sub-section (1)
or sub-section (2), the provisions of this Act shall apply to those
procedures that were not complete at the time of transfer.
(4) The Commercial Division or Commercial Court, as the case
may be, may hold case management hearings in respect of such
transferred suit or application in order to prescribe new timelines
or issue such further directions as may be necessary for a speedy
and efficacious disposal of such suit or application in accordance
with Order XIV-A of the Code of Civil Procedure, 1908:
Provided that the proviso to sub-rule (1) of Rule 1 of Order V of
the Code of Civil Procedure, 1908 shall not apply to such transferred
suit or application and the court may, in its discretion, prescribe a
new time period within which the written statement shall be filed.
(5) In the event that such suit or application is not transferred in
the manner specified in sub-section (1), sub-section (2) or sub-
A
B
C
D
E
F
G
H
927
section (3), the Commercial Appellate Division 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 is in four parts. Part I, with which we are not
concerned in the present appeals, speaks of domestic as well as
international commercial arbitration that takes place in India. Part II,
with which we are directly concerned, speaks of enforcement of foreign
awards. A foreign award is defined in Section 44 as meaning an arbitral
award on differences between persons arising out of legal relationships
considered commercial, inter alia, in pursuance of an agreement in
writing for arbitration to which the New York Convention set forth in the
First Schedule applies. Sections 49 and 50, with which we are directly
concerned, read as under:
"49. Enforcement of foreign awards.-Where the Court is
satisfied 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 order
refusing to -
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR. [R.F. NARIMAN, J.]
A
B
C
D
E
F
G
H
928
SUPREME COURT REPORTS
[2018] 1 S.C.R.
(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."
13. By the Amendment Act of 2015, pursuant to a Law
Commission Report, large scale amendments were made to various
provisions contained in Part I. So far as Part II is concerned, an
explanation was added to Section 47 which reads as under:
"Explanation.-In this section and in the sections following in
this Chapter, "Court" means the High Court having original
jurisdiction to decide the questions forming the subject-matter of
the arbitral award if the same had been the subject-matter of a
suit on its original civil jurisdiction and in other cases, in the High
Court having jurisdiction to hear appeals from decrees of courts
subordinate to such High Court."
14. Section 13(1) of the Commercial Courts Act, with which we
are immediately concerned in these appeals, is in two parts. The main
provision is, as has been correctly submitted by Shri Giri, a provision
which provides for appeals from judgments, orders and decrees of the
Commercial Division of the High Court. To this main provision, an
exception is carved out by the proviso. The primary purpose of a proviso
is to qualify the generality of the main part by providing an exception,
which has been set out 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.
A
B
C
D
E
F
G
H
929
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
other."
Lord Macmillan in Madras & Southern Maharatta Railway
Co. v. Bezwada Municipality [(1944) LR 71 IA 113, 122] laid
down the sphere of a proviso as follows:
"The proper function of a proviso is to except and deal with a
case which would otherwise fall within the general language
of the main enactment, and its effect is confined to that case.
Where, as in the present case, the language of the main
enactment is clear and unambiguous, a proviso can have no
repercussion on the interpretation of the main enactment, so
as to exclude from it by implication what clearly falls within its
express terms."
The territory of a proviso therefore is to carve out an exception to
the main enactment and exclude something which otherwise would
have been within the section. It has to operate in the same field
and if the language of the main enactment is clear it cannot be
used for the purpose of interpreting the main enactment or to
exclude by implication what the enactment clearly says unless
the words of the proviso are such that that is its necessary effect.
(Vide also Corporation of City of Toronto v. Attorney-General
for Canada [(1946) AC 32, 37] .)"
15. The proviso goes on to state that an appeal shall lie from such
orders passed by the Commercial Division of the High Court that are
specifically enumerated under Order XLIII of the Code of Civil Procedure
Code, 1908, and Section 37 of the Arbitration Act. It will at once be
noticed that orders that are not specifically enumerated under Order
XLIII of the CPC would, therefore, not be appealable, and appeals that
are mentioned in Section 37 of the Arbitration Act alone are appeals that
can be made to the Commercial Appellate Division of a High Court.
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR. [R.F. NARIMAN, J.]
A
B
C
D
E
F
G
H
930
SUPREME COURT REPORTS
[2018] 1 S.C.R.
16. Thus, 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.
17. So far, so good. However, it is Shri Giri's main argument that
Section 50 of the Arbitration Act does not find any mention in the proviso
to Section 13(1) of the Commercial Courts Act and, therefore,
notwithstanding that an appeal would not lie under Section 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 Court in that case is
the identical submission made by Shri Giri before us that Section 37
contains the expression "and from no others" which is conspicuous by
its absence in Section 50 of the Arbitration Act. This was answered by
the Court as follows:
"60. It is also evident that Part I and Part II of the Act are quite
separate and contain provisions that act independently in their
A
B
C
D
E
F
G
H
931
respective fields. The opening words of Section 2 i.e. the definition
clause in Part I, make it clear that meanings assigned to the terms
and expressions defined in that section are for the purpose of that
part alone. Section 4 which deals with waiver of right to object is
also specific to Part I of the Act. Section 5 dealing with extent of
judicial intervention is also specific to Part I of the Act. Section 7
that defines "arbitration agreement" in considerable detail also
confines the meaning of the term to Part I of the Act alone. Section
8 deals with the power of a judicial authority to refer parties to
arbitration where there is an arbitration agreement and this
provision too is relatable to Part I alone (corresponding provisions
are independently made in Sections 45 and 54 of Chapters I and
II, respectively of Part II). The other provisions in Part I by their
very nature shall have no application insofar as the two chapters
of Part II are concerned.
61. Once it is seen that Part I and Part II of the Act are quite
different in their object and purpose and the respective schemes,
it naturally follows that Section 37 in Part I (analogous to Section
39 of the 1940 Act) is not comparable to Section 50 in Part II of
the Act. This is not because, as Mr Sundaram contends Section
37 has the words in parenthesis "and from no others" which are
not to be found in Section 50 of the Act. Section 37 and Section
50 are not comparable because they belong to two different
statutory schemes. Section 37 containing the provision of appeal
is part of a much larger framework that, as seen above, has
provisions for the complete range of law concerning domestic
arbitration and international commercial arbitration. Section 50 on
the other hand contains the provision of appeal in a much limited
framework, concerned only with the enforcement of the New
York Convention Awards. In one sense, the two sections, though
each containing the appellate provision belong to different statutes."
 (at pages 356-357)
The Court 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
KANDLA EXPORT CORPORATION & ANR. v. M/S OCI
CORPORATION & ANR. [R.F. NARIMAN, J.]
A
B
C
D
E
F
G
H
932
SUPREME COURT REPORTS
[2018] 1 S.C.R.
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, thus, to be seen that the Arbitration Act, 1940, from its
inception and right through to 2004 (in P.S. Sathappan [(2004) 11
SCC 672]) was held to be a self-contained code.