Vipul Ganda is an Independent Litigation Counsel with over 14 years of experience and a proven track record in Litigation and Dispute Resolution.
Prasar Bharti Versus M/S Stracon India Limited & Anr.
Court / Forum : High Court of Delhi Citation : EFA(OS) (COMM) 4/2020 Coram : Ms. Justice Hima Kohli & Mr. Justice Subramonium Prasad Subject : Section 36 of Arbitration and Conciliation Act, 1996 (1996 Act) | Section 13 of the Commercial Courts Act, 2015 (2015 Act) Date of Decision : 2020-06-04
The Appellant entered into an agreement (Agreement) with the Respondents whereby the Respondents were granted exclusive global marketing rights, multi-media rights and other rights relating to the telecast/broadcast of cricketing events conducted in India by the BCCI.
The dispute arose between the parties on account of alleged shortfall of 17 days on the part of the Appellant, in providing cricketing days under the Agreement and the same was referred to arbitration.
The Sole Arbitrator passed an award and held that the Respondents are entitled to US$ 5,509,259/- from the Appellant along with pendente lite interest @ 18% per annum. The Respondents were also awarded costs of Rs.35,50,000/-.
The Appellant challenged the award by filing a petition under Section 34 of the 1996 Act on the Original Side of this court, numbered as O.M.P (COMM) 225/2017 (First Appeal). The Respondents filed a petition, registered as OMP (ENF) (COMM) 232/2018 (Enforcement Petition) for enforcing the said award.
In the Enforcement Petition the Ld. Single Judge directed the Appellant herein to deposit, a sum of Rs. 15,37,03,465/- assessed as the shortfall of 7 cricketing days along with pendente lite interest @ 9 per cent per annum in the Registry. Accordingly, the Appellant deposited a sum of Rs.33,69,94,847/- in the Registry.
On the other hand, vide judgement dated March 13,2020 the First Appeal was partly allowed wherein the Ld. Single Judge held that the Respondents are entitled only to claim a shortfall of 7 cricketing days.
Pursuant to the said judgment dated March 13,2020, the Respondents filed an application in the Enforcement Petition for release of Rs.33,69,94,847/-, deposited by the Appellant with the Registry.
Thereafter, the Ld. Single Judge held that the Appellant is entitled to recovery of only a sum of Rs. 22,43,55,126/- from the Respondents herein and therefore it would be appropriate to withhold a sum of Rs.22,43,55,126/- out of the sum of Rs.33,69,94,847/-. Resultantly, the Ld. Single Judge ordered the Registry to release a sum of Rs. 11 crores in favour of the Respondents vide order dated June 15, 2020 (Impugned Order) in the Enforcement Petition which has been challenged by the Appellant by way of the present appeal.
Whether the present appeal arising out enforcement proceedings under section 36 of the 1996 Act, directed against an order passed in arbitration proceedings, is maintainable under Section 13 of the 2015 Act?
The Court relied upon the case of Kandla Export Corporation & Anr. vs M/s OCI Corporation & Anr., 2018 14 SCC 715, where, while deciding with an appeal arising from a decision of the High Court of Gujarat that had dismissed an enforcement appeal which had arisen from an order passed in an execution proceeding under the 1996 Act, in respect of a foreign award the Supreme Court had observed as under:-
"14. The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order 43 of the Code of Civil Procedure Code, 1908, and Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order 43 CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that can be made to the Commercial Appellate Division of a High Court.
15. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act.
Further, in the matter of South Delhi Municipal Corporation vs. M/s Tech Mahindra EFA(OS) (COMM) 3/2019, the Court held that an appeal is a creation of a statute and cannot be claimed as a matter of right.
The Court for the aspect of maintainability of an appeal against an order passed in exercise of powers under Section 36 of the 1996 Act, relied on the judgement of in Kakade Construction Company Ltd. vs. Vistra ITCL (India) Ltd. 2019 SSC OnLine Bombay 1521, where the following was observed as under:-
25. The Supreme Court thus has clarified that in respect of the orders under the Act of 1996, only those appeals mentioned in Section 37 of the Act of 1996 are maintainable before Commercial Appellate Division. The Supreme Court held that the Act of 1996 is a self-contained code on the matters pertaining to arbitration, and which is exhaustive. The Supreme Court then adverted to the foundational logic of making the Arbitration Act a self-contained code. it was held that the Act of 2015 provided no additional right of appeal otherwise than the appeal otherwise than the appeals under the Act of 1996. Though this case arose before the Supreme Court in a foreign award and under Section 50, the underlying principle equally applies to the Section 37 of the Act of 1996. The dicta in Kandla Export is clear that in respect of the orders arising from the Act of 1996; an appeal will lie only to the extent provided under Section 37 of the Act of 1996.".
"The learned Single Judge by the impugned order has allowed the chamber summons filed by the Respondents- Claimants and has appointed receiver regarding the properties specified in the order. This order has been passed while exercising power under Section 36 of the Act of 1996 being an executory mechanism. This order not being under the Code of Civil Procedure, the only other category enumerated in Section 13 of the Commercial Courts Act, 2015 is Section 37 of the Arbitration Act, 1996. Section 37 of the Act of 1996 provides appeal only in limited cases. These are order: refusing to refer the parties to arbitration under Section 8; granting or refusing to grant any measure under Section 9; setting aside or refusing to set aside an arbitral award under Section 34. An appeal shall also lie to a Court from an order of the arbitral tribunal accepting the plea referred in sub-Section (2) or sub-Section (3) of Section 16; or granting or refusing to grant an interim measure under Section 17. These are the only orders that have been made appealable."
Thus, under Section 13 of the 2015 Act only an appeal from orders passed by a Commercial Division of a High Court to the Commercial Appellate Division of that High Court, which are enumerated under Order XLIII of the Code of Civil Procedure, 1908 (CPC), or from orders which are mentioned in Section 37 of the 1996 Act shall lie.
Thus, the Court held that under Section 37, no appeal is maintainable from any order passed under Section 36 of the 1996 Act. Further, Section 36 of the 1996 Act does not attract the provisions of the CPC. Since the statue does not provide for an appeal against and order passed under Section 36, it is axiomatic that the present appeal is also not maintainable. The Impugned Order would neither fall under Order XLIII of the CPC, nor under Section 37 of the 1996 Act. Therefore, the present appeal filed under Section 13 of the 2015 Act was held not maintainable and accordingly, dismissed.
Vipul Ganda is a Delhi based Advocate practicing largely at the Delhi High Court. His practice focus is Dispute Resolution and Litigation and his practice areas include Arbitration, Commercial, Civil, Constitutional, Corporate and Criminal Litigation.