Non-Obstante Clause U/S 13(2) Commercial Courts Act Prevails Over S.10 Delhi HC Act: Delhi High Court Dismisses Arbitral Appeals

The Delhi High Court Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela while dismissing an appeal under Section 10, Delhi High Court Act (“DHC Act”) and Section 13(2), Commercial Courts Act (“CC Act”) observed that the expression “any other law for the time being in force” used in Section 13(2), CC Act encompasses in its fold the provisions of Section 10 of the DHC Act as well. Thus, Section 13(2), CC Act overrides Section 10, DHC Act in relation to appeals in commercial matters including those relating to arbitration. Background The case concerns two appeals involving interrelated questions of law and facts, so they have been disposed by a common order. Appeal No. 1 was filed under Section 10, DHC Act questioning the legality of order dated 16.07.2024 passed by Single Judge in an enforcement petition, whereby the Single Judge denied payment of amount of interest on the awarded amount from the date of deposit in the Court till its release (“Impugned Order No.1”) The arbitration proceedings between Ramacivil India Construction Pvt. Ltd. i.e. the Decree Holder (“Ramacivil”) and Union of India i.e. the Judgment Debtor (“UOI”) resulted in an Award dated 28.01.2016 whereby UOI was directed to pay ~ Rs. 3 crore along with simple interest @ 11% p.a. from 29.01.2016 till the date actual payment is made (“Award No.1”). Award No. 1 was challenged by UOI by filing an application under Section 34, ACA. Simultaneously, Ramacivil instituted a petition for enforcement under Section 36, ACA (“Enforcement Proceedings No.1”) The application under Section 34, ACA filed by UOI was dismissed. In the enforcement proceedings, Ramacivil argued that it was entitled to be paid the interest for the period between 06.09.2021 till 19.07.2024, when the deposited amount was permitted to be released by this Court against the bank guarantee. This was vehemently opposed by UOI. The Single Judge vide Impugned Order No.1 disposed of the enforcement petition by holding that Award No.1 stood executed in its entirety, however, denied the interest claimed by Ramacivil. Appeal No.2 has been filed under Section 13, CC Act . Appeal No. 2 arose out of order dated 15.03.2024 passed by Single Judge (“Impugned Order No.2”), whereby enforcement proceedings relating to Award dated 31.03.2019 (“Award No.2”) were closed with the direction to UOI to pay the amount of interest on the award amount for the period when the amount was deposited till it was released. UOI challenged Award No.2 under Section 34, ACA which was dismissed on 14.02.2023. Ramacivil took the same plea that it took in Enforcement Proceedings No.1, which was allowed by the Single Judge vide Impugned Order No.2. Analysis The main issue for consideration of the Court was the maintainability of the appeals under Section 13(1), CC Act and Section 10, DHC Act. The Court first analysed the maintainability of the appeals under Section 13, CC Act. The Court held that in view of the proviso to Section 13, CC Act, apart from an appeal under Section 37, ACA, appeal under the CC Act is permissible only against the orders passed by the Commercial Division or Commercial Court which are enlisted in Order XLIII of CPC. Thus, in an enforcement or execution proceeding pertaining to an Arbitral Award instituted before Commercial Division of this Court, if any order is passed, that is referable to order XLIII Rule 1 (j) or Rule 1 (ja), only then an appeal before the Commercial Appellate Division of this Court would be maintainable under Section 13, CCA. Order XLIII Rule 1(j) relates to setting aside or refusing to set aside a sale and Rule 1(ja) relates to ex-parte orders in execution proceedings. In the view of the Court, no other orders are appealable under Section 13, CC Act. In the present case, the execution proceedings were closed with directions to payment of interest for a certain period to Ramacivil. Such orders neither related to Rule 1(j) nor Rule 1(ja), Order XLIII, CPC. Thus, the present appeals were found to be not maintainable under Section 13, CC Act. Subsequently, the Court considered the maintainability of the appeals under Section 10, DHC Act which provides that where a single Judge of the High Court exercises ordinary original civil jurisdiction, an appeal shall lie from his judgment to a division court of the High Court. The Court highlighted that Section 21, CC Act provides that the provisions of the CC Act will have overriding effect over any other law for the time being in force. Additionally, Court also highlighted that Section 13(2) commences with a non-obstante clause and provides that, even if anything contrary exists in any other law for the time being in force or even in letters patent of High Court, appeal shall not lie, otherwise than in accordance with the provision of the CC Act. The expression “any other law for the time being in force” in...

Non-Obstante Clause U/S 13(2) Commercial Courts Act Prevails Over S.10 Delhi HC Act: Delhi High Court Dismisses Arbitral Appeals

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Non-Obstante Clause U/S 13(2) Commercial Courts Act Prevails Over S.10 Delhi HC Act: Delhi High Court Dismisses Arbitral Appeals

Arpita Pande

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