Introduction 

• This is a landmark judgment which talks about the interplay between right to appeal under Section 13 (1) of the Commercial Court Act and Section 50 of the Arbitration and Conciliation Act, 1996.  
• The Judgment was delivered by a single judge bench consisting of Justice RF Nariman. 

Facts

• On 28th April, 2014, an arbitration award was passed by the Grain and Feed Trade Association (GAFTA) ordering the Appellants (sellers) to pay the Respondents (buyers) US$846,750 plus 4% compound interest. 
• On 16th April, 2015, the Appellate Tribunal modified the award to US$815,000 plus 4% compound interest. 
• The Appellants challenged this award in the UK through multiple appeals (Queen's Bench, Commercial Court, Court of Appeal), but all appeals were rejected. 
• Meanwhile, on 29th June, 2015, the Respondents filed an Execution Petition in the District Court of Gandhidham-Kutch, India under Section 48 of the Arbitration and Conciliation Act, 1996 (A & C Act) to enforce the foreign award. 
• The Execution Petition was transferred to the Commercial Division of the Gujarat High Court. 
• On 8th August, 2017, the Gujarat High Court dismissed the Appellants' objections and allowed the execution of the foreign award. 
• The Appellants filed an appeal against this decision under the Commercial Courts Act, which was dismissed by the High Court on 28th September, 2017. 
• The High Court ruled that Section 50 of the A & C Act only allows appeals when petitions to enforce foreign awards are rejected, not when they are allowed. 
• The case now involves a legal question about whether the Commercial Courts Act provides an additional right of appeal that isn't available under the Arbitration Act.

Issue Involved

• Whether an appeal not maintainable under Section 50 of A & C Act is nonetheless maintainable under Section 13 (1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (CCA)?  

Observation 

• The Court in this case first of all laid down the rules for interpreting proviso appended to the main provision: 
  • An exception has been carved out in the form of proviso in this case. 
  • The primary purpose of the proviso is to qualify the generality of the main part by providing an exception. 
  • It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. 
  • The proviso carves out an exception to the main provision to which it has been enacted as a proviso and to no other. 
• The proviso to Section 13 of CCA states that an appeal lies from orders passed by the Commercial Division of High Court that are specifically enumerated under Order XLIII of Civil Procedure Code, 1908 (CPC) and Section 37 of the A & C Act. 
• Thus, orders that are not mentioned in Order XLIII of CPC are not appealable and only appeals that are mentioned in Section 37 of A & C Act alone are appeals that can be made to the Commercial Appellate Division of a High Court. 
• An order which refers the parties to arbitration under Section 8 of the A & C Act is not appealable under Section 37 (1) (a) and therefore it is also not appealable under Section 13 (1) of CCA. 
• Similar is with respect to appeal rejecting the plea referred to in Section 16 (2) and (3) of the A & C Act.   
• The Court further clarified that in all arbitration cases of enforcement of foreign awards, it is Section 50 alone which provides for appeal.  
• Section 50 properly read would, therefore, mean that if an appeal lies under the said provision, then Section 13(1) of the CCA alone would be attracted as laying down the forum which will hear and decide such an appeal. 
• Further, the Court held that the objective of the Act should also be considered. Any construction of Section 13 (1) of CCA which would lead to further delay should be eschewed. 
• Therefore, the Court dismissed the appeal.

Conclusion

• This is a landmark judgment which lays down that in all cases involving enforcement of foreign awards it is Section 50 of A & C Act alone which provides for appeal. 
• Section 13 (1) of CCA would only lay down forum in which will hear the appeal.