In an appeal filed before the Lucknow Bench of the Allahabad High Court under Chapter VIII Rule 5 of the Allahabad High Court Rules, 1952, to challenge a judgment of a Single Judge of this Court functioning as a commercial division under the Commercial Courts Act, 2015, a Division Bench of Justice Rajan Roy and Justice Rajeev Bharti did not find any infirmity in the impugned judgment and refused to interfere with the same while dismissing the special appeal.
The respondent initially filed an application under Section 36 of the A&C Act for enforcement of the award, but, as found not maintainable, withdrew it from the district commercial court and filed it before the commercial division of the High Court.
The Court perused Chapter VIII, Rule 5 of the Court Rules, and said that since the Single Judge had exercised his original jurisdiction under the 2015 Act, along with the Arbitration and Conciliation Act, 1996, the exclusion clause in the said provision was not applicable and the appeal was maintainable.
The Court noted that the question in the present matter was whether such an award is to be enforced through the commercial courts established at the district level or the commercial division of the High Court. The Court referred to Section 36 of the A&C Act and noted that it did not specifically provide for the forum or court for the execution of an award, including one issued in the context of international commercial arbitration.
The Court stated that domestic awards in domestic arbitrations are enforced by the district commercial courts, whereas foreign awards in international commercial arbitration are enforceable by the High Court in view of the explanation to Section 47. It was further stated that the question arising here was which Court would execute the award if the arbitration is an international commercial arbitration, but the seat of the arbitration is in India, and the award is domestic?
The Court stated that the definition of international commercial arbitration as per Section 2(1)(f) would apply in such a case. Reference was made to Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552 (BALCO Case), as well as PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited (2021) 7 SCC 1, and it was stated that international commercial arbitration in Section 2(2) would not apply to the present case.
Further, the Court stated that Section 2(1)(e)(i) applies to a case of arbitration ‘other than an international commercial arbitration’, which makes it inapplicable to the present case. However, it was said that Section 2(1)(e)(ii) would be applicable since, as per the first part of the provision, the High Court having jurisdiction to decide the subject matter of the arbitration if the same was the subject matter of a suit, will be the Court in international commercial arbitrations. As per the second part, i.e., in cases where the High Court does not have original jurisdiction, a High Court having jurisdiction to hear appeals from decrees of subordinate courts would be the Court in international commercial arbitration.
The Court stated that since the Allahabad High Court does not have original civil jurisdiction to decide the subject matter of the arbitral award, the second part of Section 2(1)(e)(ii) would apply to the present case. The Court went on to state that wherever Part I of the A&C Act would apply, the definition of Court contained in Section 2(1)(e) would apply.
The Court said that merely because of the addition of an explanation in Section 47 of Part II of the A&C Act, no inference could be drawn that for the enforcement of a domestic award in an international commercial arbitration, the commercial court at the district level would be the competent forum, since these two issues are separate and governed by different parts of the A&C Act. The Court stated that Part II of the A&C Act is separate from Part I and that there is no interplay of the provisions of the two parts.
The Court also referred to Section 10(1) of the 2015 Act, which provided that, in matters of international commercial arbitration, all appeals lie before the High Court. Hence, this provision was found to be in sync with Section 2(1)(e)(ii) and the Explanation to Section 47 of the A&C Act.
The Court opined that the judgment of the Single Judge did not suffer from any error, as it rejected the appellants’ objections to the maintainability of the respondents’ application under Section 36. Thus, the appeal was dismissed.
Appearances:
For Appellants – Mr. Rajeev Sharan, Mr. Amal Rastogi, Mr. Devesh Bahadur Singh
For Respondents – Anurag Tyagi