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Delhi High Court Amends Sections of Commercial Courts Ordinance

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The Delhi High Court in the recent judgement of Ascot Estates Pvt. Ltd.v. Bon Vivant Life Style Pvt. Ltd. has read down the provisions of Section 10(1) & (2) of the Commercial Courts Ordinance.

 

Sub-Clause (1) and sub-Clause 2 of Section 10 of the Ordinance provides that all applications or appeals emanating from international and domestic arbitrations respectively governed by the Arbitration and Conciliation Act, 1996, that have been filed on the original side of the High Court, shall be adjudicated by the Commercial Appellate Division constituted in terms of Section 5 of the Ordinance. Now, as per the judgement of the Delhi High Court, the words ‘Commercial Appellate Division’ are to be read as ‘Commercial Division’ concerning applications or petitions against which an appeal lies under Section 37 of the Arbitration and Conciliation Act, 1996.

 

Appeal under Section 37 of the Arbitration Act lie for the following matters:

 

  • Order refusing to refer the parties to arbitration under section 8;
  • Order granting or refusing to grant any measure under section 9;
  • Order 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 to in sub-section (2) or subsection (3) of section 16; or granting or refusing to grant an interim measure under section 17.

 

If the provisions of Section 10 are followed, then the right of appeal under Section 37 would have been immutably foreclosed. Since Section 37 has been retained under the Arbitration Ordinance, the inescapable conclusion is that the law makers consciously chose to retain the right of appeal, thereby negating the hypothesis of its implied repeal.

 

It will be interesting to see how the High Courts of Bombay, Kolkata and Chennai interpret the provision of Section 10 and whether or not they follow the precedent set by the Delhi High Court.