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.

Surinder Mehta & Others Versus Prime Meiden Ltd. & Others

Surinder Mehta & Others Versus Prime Meiden Ltd. & Others - TMI 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.