Home > Recent Judgements > Section 13 Of Commercial Courts Act Doesn’t Provide Any Independent Right To Appeal In Arbitration Matters
Jan 20, 2025
INTRODUCTION
The case between Synergies Casting Ltd vs National Research Development Corporation & Anr. In a repeated emphasis, the Delhi High Court stated that Section 13 of the Commercial Courts Act does not create an independent right to appeal arising from the Arbitration and Conciliation Act, 1996. This is in line with the consistent approach of the court while interpreting the interplay between the two statutes with a view towards creating coherence and clarity in resolution of commercial disputes. The Commercial Courts Act, 2015 was enacted for streamlining and expediting the resolution of commercial disputes. Section 13 of the Arbitration and Conciliation Act provides for appeal from certain orders of commercial courts to commercial appellate courts. In case arbitration is involved, the scope and manner of appeals are governed by provisions of the Arbitration and Conciliation Act, 1996.
SECTION 13 OF ARBITRATION & CONCILIATION ACT,1996
Section 13 of the Arbitration and Conciliation Act, of 1996 deals with the procedure of challenging the arbitrator which says that the challenge has to be with respect to the agreement as agreed upon by both the parties, However, failing the same the challenge will lie before the arbitral tribunal. It is pertinent to note that the arbitration proceedings are voluntary proceedings and section16 of the Act explicitly mentions the jurisdiction of the tribunal to decide upon its competence. However, the principle of natural justice ” Nemo in propria causa judex esse debet” (no one should be made a judge in his own cause), rights of the parties, speedy disposal of the arbitration proceedings and powers of the tribunal need to be placed in an understandable balance. Furthermore, the balance has to be with the objective of giving an upper hand to impartiality in the arbitration proceedings, as the foremost intent of the legislature before any special legislation has always been the fair and just application of that legislation.
KEY ISSUES
- Does an order under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 direct an award to be made whereby the order directing the appellant to pay the awarded sum to the Registrar General qualifies for appeal?
- Whether Section 13 of the Commercial Courts Act, 2015 provides an independent right to appeal orders related to arbitration matters that are not explicitly covered under Section 37 or 50 of the Arbitration & Conciliation Act?
- Whether an order in dispute can be classified to come under Order 43, Rule 1 of Code of Civil Procedure, 1908, as held for appeal consideration with the section 13 of Commercial Courts Act and section 10 of the Delhi High Court Act, 1966?
JUDGMENT
A recent case concerning the Delhi High Court held that a Section 13 of the Commercial Courts Act, 2015 cannot be invoked for an appeal filed under its provisions in a decree passed under the Arbitration Act. Once again, reiterated was the legal position that Section 13 confers no extra or independent right to appeal in arbitrations. It clarified that appeals in this regard strictly fall within the ambit of the provision of Section 37 of the Arbitration and Conciliation Act. The reason the court arrived at was that allowing Section 13 to override the specifics of the Arbitration and Conciliation Act, 1996 would disrupt the legislative scheme designed to ensure the speedy and limited intervention by courts in arbitration proceedings. The Delhi High Court’s judgment serves as an important reminder of the limited scope of appeals in arbitration matters. By reaffirming the primacy of the Arbitration Act over the Commercial Courts Act in this context, the court has upheld the legislative intent to promote arbitration as an effective dispute resolution mechanism. Litigants and practitioners must take note of this interpretation to avoid futile litigation and ensure compliance with the law.
OBSERVATION
The court has stated that section 37 of the Arbitration and Conciliation Act, 1996 is a detailed and illustrative provision of what orders are appealable. In such circumstances, an attempt by section 13 of the Commercial Courts Act to expand the appealability scope would defeat the Arbitration Act’s purpose.
The Arbitration Act, having been stated as a special legislation, enlists its applicability in derogation of common and general statutes enacted under its control, namely the Commercial Courts Act. Herein too, that very legislative policy promotes arbitration through swift and expedient alternative mechanism dispute resolution that no court’s delay would debar.
The court reminded the fact that judicial interpretation of statutes should be done in a way that ensures harmony rather than inconsistency. It ruled that Section 13 of the Commercial Courts Act must be read along with Section 37 of the Arbitration and Conciliation Act, 1996 to uphold the legislative scheme.
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