Appeal In Commercial Dispute Arising From Arbitration Act Must Be Filed Before Commercial Appellate Court, Not HC: Orissa High Court

The Orissa High Court bench of Justice S.K. Panigrahi has held that a plain reading of Sections 6 and 10(3) of the Commercial Courts Act, 2015, leads to the conclusion that the appropriate 'court' to consider a commercial dispute, even if it arises under the Arbitration and Conciliation Act, would be the commercial court and an appeal would, therefore, lie only before the Commercial Appellate Court being the District Court. Brief Facts: The appellant is the owner of 4 acres 875 decimals of land, and he entered into a bipartite agreement with the respondent for the development of that land. The appellant also entered into a tripartite agreement with the respondent and Kesari Estates Pvt. Ltd for the development of a portion of their land. The respondent was not able to complete the work on time and a supplementary agreement was executed between the parties for an extension of time for the completion of work on part payment of compensation of Rs. 30,00,000. Then, a dispute arose related to payment and the respondent invoked arbitration. The Arbitral Tribunal passed an award in which Rs. 2,12,13,336/- at 18% interest p.a. was awarded in favour of the respondent and Rs. 15,00,000/- at 18% interest p.a. was awarded in favour of the appellants towards the counter claims. Thereafter, the appellant filed a petition under Section 34 of the Arbitration & Conciliation Act, 1996 seeking modification of the award. The Commercial Court dismissed the application under Section 34 of the Act for being devoid of merits. Aggrieved by this, the appellant filed an appeal under Section 37 of the Act seeking to set aside the judgment passed by the Commercial Court. Issue: Whether the appeal under Section 37 of the Act arising out of the order passed by the Commercial Court being an order passed at a level lower than that of a District Judge is maintainable before this court? Observation of the court: The court analyzed the provisions of the Commercial Courts Act, 2015 and noted that except for places where the High Court exercises original civil jurisdiction, there exists a Commercial Court competent to try cases with specified value at the district level. Then, the court analysed the provisions of the Arbitration & Conciliation Act, 1996 and observed that as per the scheme of the Arbitration Act, the original court of competent jurisdiction would be the District Court, and the appellate court would be the High Court. Thereafter, the court held that the Commercial Courts Act, 2015 being a subsequent Central enactment, the legislative intent can only be presumed to have taken into consideration the prevailing provisions of the Arbitration Act. Consequently, the court held that a plain reading of the provisions of the statute especially Sections 6 and 10(3) of the Commercial Courts Act would lead us to the inescapable conclusion that the court for the purpose of considering a commercial dispute even if it arises under the Arbitration and Conciliation Act, 1996 would be the commercial court and the appeal would, therefore, lie only to the Commercial Appellate Court, that is, the District Court in the instant case. Finally, the court disposed of the appeal and returned the appeal without examining the merits of the case to enable the appellants to approach the Commercial Appellate Court which has the necessary jurisdiction to decide this dispute. Case Title: M/s. Jaycee Housing Private v. Neelachal Buildtech & Resorts Pvt. Case Number: ARBA No.7 of 2024 Counsel for the Appellant: Mr. Yasobant Das, Sr. Adv. along with associates Counsel for the Respondents: Mr. Banshidhar Baug, Adv Date of Judgment: 08.01.2025 Click Here To Read/Download The Order

Appeal In Commercial Dispute Arising From Arbitration Act Must Be Filed Before Commercial Appellate Court, Not HC: Orissa High Court

Soumya Chakrabarti

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