2020 (8) TMI 645 - AT - Companies Law

Appeals forum clarified: Judicial order under Arbitration Act not appealable under Companies Act. Seek relief through authorized court.

The Appellate Tribunal held that the order of refusal by the Judicial Authority under Section 45 of the Arbitration Act was not appealable under Section ... Appealable order or not - whether the order of refusal passed by the Judicial Authority (National Company Law Tribunal) under Section 45 of the ‘Arbitration and Conciliation Act, 1996’ is appealable under Section 421 of the Companies Act, 2013? HELD THAT:- Since promulgation of the Companies Act, 2013, the power of the Hon’ble High Court vested under different provisions stands transferred to ‘National Company Law Tribunal’ in terms of Section 434 of the Companies Act, 2013 and the appeal power is not vested with the Hon’ble High Court but before this Appellate Tribunal. The Hon’ble Supreme Court in SUMITOMO CORPORATION VERSUS CDC FINANCIAL SERVICES (MAURITIUS) LTD. [2008 (2) TMI 627 - SUPREME COURT] observed in paragraph 25 of the said judgment that the expression ‘court’ not simpliciter but qualified by the wording “authorised by law to hear appeals from such order”. - In the present case, the order having passed by the Judicial Authority under Section 45 of the ‘Arbitration and Conciliation Act, 1996’ and in absence of any power delegated under the ‘Arbitration and Conciliation Act, 1996’, it is held that the appeal is not maintainable. Appeal disposed off. Issues:1. Appealability of the order of refusal passed by the Judicial Authority under Section 45 of the Arbitration and Conciliation Act, 1996 under Section 421 of the Companies Act, 2013.Analysis:The Appellant filed an application under Section 45 of the Arbitration and Conciliation Act, 1996 before the National Company Law Tribunal, seeking arbitration in proceedings under Sections 241 and 242 of the Companies Act, 2013. The Tribunal refused to refer the matter for arbitration. The key issue in this appeal was whether the order of refusal by the Tribunal under Section 45 of the Arbitration Act is appealable under Section 421 of the Companies Act, 2013.In a previous case, the Appellate Tribunal held that appeals under Section 421 of the Companies Act lie before the competent forum based on the capacity in which the Tribunal passes the order. If the Tribunal acts as a judicial authority under Section 45 of the Arbitration Act, the appeal does not lie under Section 421 of the Companies Act but before an appropriate forum. The Appellate Tribunal reiterated this position in the present case.Referring to the Supreme Court's decision in 'Sumitomo Corporation vs. CDC Financial Services (Mauritius) Ltd.', it was argued that under the Companies Act, 2013, the power to hear appeals against orders of the National Company Law Tribunal is vested in the National Company Law Appellate Tribunal, not the High Court. The Supreme Court's observations highlighted the jurisdictional aspects of appeals under Section 45 of the Arbitration Act.The Appellate Tribunal concluded that the order passed by the Judicial Authority under Section 45 of the Arbitration Act is not appealable under Section 421 of the Companies Act. Citing the 'Sumitomo Corporation' case and their previous decision, the Tribunal held that the appeal was not maintainable before them. However, the Appellant was not precluded from approaching the appropriate court authorized under the law for relief under Section 50 of the Arbitration Act.Therefore, the appeal was disposed of with the finding that the order of refusal by the Judicial Authority under Section 45 of the Arbitration Act was not appealable under Section 421 of the Companies Act, 2013, before the National Company Law Appellate Tribunal.