TaxTMI 
TaxTMI 
2016 (11) TMI 1701
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....96 (for short 'the 1996 Act). Be it stated, while expressing the view that the Code of Civil Procedure is applicable to an appeal preferred Under Section 37 of the Act, the High Court has in the impugned order opined that the cross objection preferred by the Respondent herein was maintainable and accordingly entertained the same after condoning the delay. 3. Assailing the said order, it is submitted by Mr. N.K. Kaul, learned Additional Solicitor General, appearing for the Appellant, that the scheme of the 1996 Act does not grant any space or make any provision as regards the applicability of Code of Civil Procedure unlike the Arbitration Act, 1940 (for short 'the 1940 Act') and in the absence of any express provision, the legislative intendment is not to make it applicable. It is his further submission that Sections 5, 34, 37 and 50 of the 1996 Act constitute a complete code and it clearly provides the measures for adjudging or deciding the validity of an award or even to adjudge the defensibility of an interim order. It is urged by him that recourse to any other mode under the Code of Civil Procedure to challenge an order or the award passed under the Act would crea....
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....1940, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. It is widely felt that the 1940 Act, which contains the general law of arbitration, has become outdated. The Law Commission of India, several representative bodies of trade and industry and experts in the field of arbitration have pro-posed amendments to this Act to make it more responsive to contemporary requirements. It is also recognised that our economic reforms may not become fully effective if the law dealing with settlement of both domestic and international commercial disputes remains out of tune with such reforms. Like arbitration, conciliation is also getting increasing worldwide recognition as an instrument for settlement of disputes. There is, however, no general law on the subject in India. 2. The United Nations Commission on International Trade Law (UNCITRAL) adopted in 1985 the Model Law on International Commercial Arbitration. The General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specif....
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....s, every arbitral award made in a country to which one of the two international Conventions relating to foreign arbitral awards to which India is a party applies, will be treated as a foreign award. 5. The Bill seeks to achieve the above objects. 7. Section 5 of the 1996 Act provides the extent of judicial intervention. It reads as follows: Extent of judicial intervention.--Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. The aforesaid provision is specific and has a definite purpose. The language employed in the aforesaid provision provides the exclusive path for judicial intervention and does not countenance any other method. The same would be clearly demonstrable when we appreciate the scheme of the Act. 8. Section 9 of the 1996 Act provides for interim measures etc. by Court. Section 11 of the 1996 Act deals with appointment of Arbitrators. Chapter 4 that contains Sections 16 & 17 deals with jurisdiction of the Arbitral Tribunals. Section 34 provides for application for setting aside arbitral Award. Section 37 ....
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.... On a perusal of the said provision, in juxtaposition with the provisions contained in 1996 Act, it seems to us that the legislature has intentionally not kept any provision pertaining to the applicability of the Code of Civil Procedure. On the contrary, Section 5 of 1996 Act lays the postulate, that notwithstanding anything contained in any other law for the time being in force in matters covered by Part I, no judicial authority shall intervene except so provided wherever under this Act. 12. In ITI Ltd. (supra) the assail was to the judgment and order of the 10th Additional City Civil Judge, Bangalore passed in a Misc. Appeal. The said appeal was preferred against an interim order passed by the arbitral tribunal. The principal question that emerged for consideration before this Court is whether a revision petition Under Section 115 of the Code of Civil Procedure lies to the High Court against an order made by the Civil Court in an appeal preferred Under Section 37 of the Act. It is necessary to note here that the Appellant therein instead of moving the High Court had approached this Court directly. Be that as it may. Hegde, J in his opinion, analysing the scope of Section 5 has....
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....ming the subject matter of the arbitration if the same had been the subject-matter of the suit". The power of appeal having conferred on a civil court all procedural provisions contained in the Code would apply to the proceedings in appeal. Such proceedings in appeal are not open to second appeal as the same is clearly barred under Sub-section (3) of Section 37. But I agree with the conclusion reached by Brother Hegde, J. that the supervisory and revisional jurisdiction of the High Court Under Section 115 of the Code of Civil Procedure is neither expressly nor impliedly barred either by the provisions of Section 37 or Section 19(1) of the Act. Section 19(1) under Chapter V of Part I of the Act merely states that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure. The said action has no application to the proceedings before the civil court in exercise of powers in appeal Under Section 39(2) of the Act. 15. In International Security & Intelligence Agency Ltd. (supra), a three-Judge bench was dealing with maintainability of a cross objection under Order XLI Rule 22 of the Code of Civil Procedure. It is apt to mention here that the controversy arose in the conte....
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....cedure. 20. Once we hold that by taking cross objection what is being exercised is the right of appeal itself, it follows that the subject-matter of cross objection and the relief sought therein must conform to the requirement of Section 39(1). In other words, a cross objection can be preferred if the applicant could have sought for the same relief by filing an appeal in conformity with the provisions of Section 39(1) of the Act. If the subject-matter of the cross objection is to impugn such an order which does not fall within the purview of any of the categories contemplated by Clauses (i) to (vi) of Sub-section (1) of Section 39 of the Act, the cross objection shall not be maintainable." 16. After so stating, the Court adverted to the fate of cross-objections if the appeal itself is held not competent or not maintainable. We are not concerned with the aforesaid delineation and, therefore, construe it inessential to advert to the said facet. Suffice it to mention that the decision was rendered in the backdrop of 1940 Act and hence, it is distinguishable. 17. In Pandey & Co. Builders (P) Ltd. (supra), the Court reproduced a passage from the treatise "Law and Practice....
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....uote para 89 in its entirety: 89. It is thus, to be seen that Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan) was held to be a self-contained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carried with it "a negative import that only such acts as are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done". In other words, a letters patent appeal would be excluded by the application of the one of the general principles that where the special Act sets out a self-contained code the applicability of the general law procedure would be impliedly excluded. 20. Slightly earlier, we have mentioned that the court has referred to a seri....
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.... status of the arbitral tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court Under Article 226 or 227 of the Constitution of India. Such an intervention by the High Courts is not permissible. 46. The object of minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached Under Article 227 of the Constitution of India or Under Article 226 of the Constitution of India against every order made by the arbitral tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the arbitral tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them Under Section 37 of the Act even at an earlier stage. 23. We are absolutely conscious that the principle stated in the aforesaid verdict pertaining to interference of exercise of jurisdiction was in relation to any order passed by the arbitral tribunal. However, we have....
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....s Act, 2015 would not be applicable to an arbitration appeal. The High Court opined that the appeal was maintainable. A two-Judge Bench of the Court analyzing various provisions and the earlier precedents came to hold that: 23. The aforesaid provision clearly lays down that a forum is created, i.e., Commercial Appellate Division. Section 50(1)(b) of the 1996 Act provides for an appeal. Section 50(1)(b) has not been amended by the Act that has come into force on 23.10.2015. Thus, an appeal Under Section 50(1)(b) of the 1996 Act before the Division Bench is maintainable. 24. Thus analysed, we find that the impugned judgment of the learned Single Judge Under Section 50(1)(b) of the 1996 Act is passed in the original side of the High Court. Be that as it may, Under Section 13 of the Act, the single Judge has taken the decision. Section 13 bars an appeal under Letters Patent unless an appeal is provided under the 1996 Act. Such an appeal is provided Under Section 50 of the Act. The Letters Patent Appeal could not have been invoked if Section 50 of the 1996 Act would not have provided for an appeal. But it does provide for an appeal. A conspectus reading of Sections 5 a....