Source: Delhi High Court  

Why in News? 

A bench Justice Navin Chawla and Justice Shalinder Kaur ruling clarified that orders neither setting aside nor refusing to set aside an arbitral award are not appealable under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996. The court held that appeals in arbitration cases are limited to those expressly permitted under Sections 37 and 50 of the Act. 

• The Delhi High Court held this in the case of Synergies Casting Ltd. v. National Research Development Corporation & Anr. (2025). 
•  It also held that Section 13 of the Commercial Courts Act, 2015, does not provide an independent right to appeal, reinforcing the restrictive approach to arbitration appeals. 

What was the Background of Synergies Casting Ltd. v. National Research Development Corporation & Anr. (2025)? 

• The case arises from FAO(OS) (COMM) 1/2025, where the appellant challenged an Order dated 10.09.2024 passed by the Single Judge in O.M.P.(COMM) 7/2024. 
• The original case titled "Synergies Casting Ltd. Through its Authorized Representative v. National Research Development Corporation & Anr." was before the Single Judge. 
• The Single Judge had directed the appellant to deposit the principal awarded amount with the Registrar General of the High Court within eight weeks. 
• Upon such deposit, the execution of the Impugned Award was to remain stayed until the pendency of the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act). 
• The appellant filed the appeal with a delay of 29 days, for which condonation was sought and granted. 
• The appellant contended that while the appeal may not be maintainable under Section 37 of the A&C Act, it would be maintainable under Section 13 of the Commercial Courts Act, 2015. 
• The appellant also relied on Order XLIII Rule 1 of the Code of Civil Procedure, 1908, and Section 10 of the Delhi High Court Act, 1966, to support the maintainability of the appeal. 

What were the Court’s Observations? 

• The Court referenced the Supreme Court's decision in Furest Day Lawson Limited v. Jindal Exports Limited, which established that the A&C Act is a self-contained Code carrying negative import against appeals not mentioned therein. 
• The Court cited Kandla Export Corporation v. OCI Corporation, which reaffirmed that no appeal is maintainable in arbitration matters except those expressly provided under Section 37 or 50 of the A&C Act. 
• The Court states BGS SGS Soma JV v. NHPC Ltd., which established that the A&C Act being a Special Act prevails over the Commercial Courts Act, being a General Act. 
• The Court noted that Section 13 of the Commercial Courts Act, 2015 merely provides forums for appeals and does not confer any independent right of appeal. 
• The Court observed that even if an order is generally appealable under Order XLIII Rule 1 of CPC, it must fall within Section 37 of the A&C Act to be appealable. 
• The Court found that the Impugned Order neither set aside nor refused to set aside the arbitral award in challenge before the Single Judge. 
• The Court concluded that the Order did not fall within Section 37(1)(c) of the A&C Act and was therefore not appealable. 
• Based on these observations, the Court held the appeal to be not maintainable and dismissed it accordingly. 

What is the Commercial Courts Act, 2015? 

About:

• The Commercial Courts Act, 2015 is a specialized legislation enacted to address the growing complexity of commercial disputes in India, which came into effect on 23rd October 2015, as Act No. 4 of 2016, establishing a dedicated framework for resolving commercial disputes efficiently. 
• The Act establishes Commercial Courts at the district level with specialized jurisdiction over commercial matters, ensuring accessibility to litigants while maintaining expertise in commercial dispute resolution through specially trained judges who have experience in handling complex commercial matters. 
• It provides a comprehensive definition of "commercial disputes" encompassing various commercial transactions, contracts, and agreements, thereby creating clarity and certainty regarding which matters fall under its jurisdiction and can be adjudicated by Commercial Courts. 
• The legislation mandates strict timelines for different stages of litigation and expeditious disposal of cases, aiming to minimize delays that are typically associated with commercial litigation in regular courts. 
• A distinctive feature of the Act is its creation of a specialized judicial infrastructure with judges having expertise in commercial matters, enabling informed and quick decision-making while fostering confidence among commercial litigants in the dispute resolution process. 
• The Act represents a significant reform in India's commercial dispute resolution mechanism, addressing the specific needs of the business community by providing a streamlined, efficient, and specialized forum for resolving commercial disputes. 

Section 13 of the Commercial Courts Act, 2015: 

• Any aggrieved person can appeal against a judgment/order of a Commercial Court (below District Judge level) to the Commercial Appellate Court within 60 days from the date of judgment/order. 
• For judgments/orders from Commercial Courts at District Judge level or Commercial Division of High Court, appeals lie to the Commercial Appellate Division of that High Court within 60 days. 
• The proviso specifically allows appeals from orders passed by Commercial Division/Commercial Court that are:  
  • Enumerated under Order XLIII of Code of Civil Procedure, 1908 (as amended). 
  • Listed under Section 37 of the Arbitration and Conciliation Act, 1996. 
• No appeal shall lie from any order/decree of Commercial Division or Commercial Court except as provided under this Act, notwithstanding:  
  • Any other law in force. 
  • Letters Patent of a High Court. 
• The Section establishes a two-tier appellate structure based on the level of the Commercial Court:  
  • Lower courts to Commercial Appellate Court. 
  • District Judge/High Court Division to Commercial Appellate Division. 
• The time limit of 60 days is uniform for both levels of appeal, calculated from the date of judgment or order. 
• The section creates a comprehensive and exclusive appellate mechanism for commercial matters, overriding other general appellate provisions. 
• The section specifically incorporates certain enumerated orders under CPC and Arbitration Act within its appellate jurisdiction while excluding all others. 

What is Section 34 of the Arbitration and Conciliation Act, 1996 ? 

• The Section provides that recourse against an arbitral award can only be made through an application for setting aside the award under subsections (2) and (3). 
• The grounds for setting aside an arbitral award by the Court are divided into two categories:  
  • Where the party making application furnishes proof. 
  • Where the Court itself finds certain issues. 
• Under Section 34(2)(a), a party must furnish proof of:  
  • Party's incapacity 
  • Invalid arbitration agreement 
  • Improper notice of arbitrator appointment or proceedings 
  • Award dealing with disputes beyond arbitration scope 
  • Improper composition of tribunal or procedure 
• Under Section 34(2)(b), the Court may set aside the award if:  
  • The dispute subject matter is not arbitrable under law. 
  • The award conflicts with public policy of India. 
• An award is deemed to conflict with public policy of India only if:  
  • It was induced by fraud or corruption. 
  • It contravenes fundamental policy of Indian law. 
  • It conflicts with basic notions of morality or justice. 
  • For non-international commercial arbitrations, an additional ground exists - the award can be set aside if vitiated by patent illegality appearing on face of award. 
• Time limit for filing application:  
  • Within 3 months of receiving the award. 
  • Additional 30 days possible with sufficient cause. 
  • Prior notice to other party mandatory. 
• The application must be disposed of expeditiously, within one year from the date of service of notice to the other party. 
• The Court may adjourn proceedings to allow the tribunal to resume proceedings or take action to eliminate grounds for setting aside the award.