This case is a part of our Annual Arbitration Review 2018.
Citation: 2018 SCC OnLine Del 12688
Court: High Court of Delhi
Coram: Navin Chawla, J.
Date: 28th November 2018
Keywords: foreign award, original jurisdiction, investors, commercial arbitration, Section 47, Section 26.
This case deals with the effect of an amendment to the procedural law of the High Court of Delhi on a petition for enforcement of a foreign award.
The present enforcement petition was filed in the high court of Delhi seeking enforcement of the Foreign Award dated 04.04.2014 passed by the Sole Arbitrator under the London Maritime Arbitrators Association Rules in London. When the present petition was filed, the High Court had the pecuniary jurisdiction to entertain the same.
The learned Senior Counsel for the Respondent has urged that with the promulgation of the Delhi High Court (Amendment) Act, 2015 (hereinafter referred to as the “Delhi High Court Act”), read with the Notification/Office Order dated 24th November 2015, this Court would lack pecuniary jurisdiction to further entertain the present petition and, therefore, the same should be transferred to the District Court.
The learned Counsel for the Petitioner on the other hand, contended that under Explanation to Section 47 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act"), as amended by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as the "Amendment Act"), only the High Court with original jurisdiction can hear the petition.
Whether this petition should be transferred to a jurisdictional subordinate Court or continue to be heard by this Court following the passage of the Delhi High Court (Amendment) Act, 2015?
A comparative reading of the pre-amendment and post-amendment explanation to Section 47 of the Act clearly shows that prior to the amendment, the petition seeking enforcement of a Foreign Award had to be filed before the Principal Civil Court of original jurisdiction. Whereas post the amendment, the petition could only be heard by the High Court having original jurisdiction.
The Court referred to the Law Commission of India's 246th Report, which documented the object and purpose of the amendment. The amendment intended those international commercial arbitrations, involving foreign parties would be heard expeditiously to provide confidence to foreign investors as well as mitigate the risk faced by the Government of India from claims by foreign investors under the relevant Investment Treaty negotiated by the Government of India with other countries.
The Court stated that the enforcement petition was rightly instituted before the High Court of Delhi under the pre-amended Act. However, under the Delhi High Court Act, as amended with effect from 26th October 2015, read with the Notification/Office order dated 24th November 2015, based on the pecuniary value, the petition was to be transferred to the District Court. The only question, therefore, was whether the Amendment Act, which came into effect on 23rd October 2015, would affect such a transfer of the petition.
The Court held that despite the coming into force of the Amendment Act, the present petition could not be transferred to the District Court. It referred to the cases of Jogendra Lal Saha v. State of Bihar and Others [i], and P.V. Hemalatha v. Kattamkandi Puthiya Maliackal Saheeda and Others. Both the cases uphold the principles expressed in the maxims Generalia Specialibus Non Derogant and Specialia Generalibus Derogant which state that a special provision made on a certain matter would prevail over the general provision in its application. The Court noted that the Act is a special statute as compared to the Delhi High Court Act, which would be a general statute dealing with the jurisdiction and procedure of the High Court. Hence, the provisions of the Delhi High Court Act cannot be made applicable to the petitions seeking enforcement of the Foreign Awards. The court cited the case of Kandla Export Corporation and Anr. v. M/s. OCI Corporation and Another to support its conclusion.
The Court also stated that the Explanation to Section 47 of the amended Act was merely procedural in nature and thus would apply retroactively unless the amending statute provided otherwise. Section 26 of the Amendment Act does not exclude the application of the amended Explanation to Section 47 of the Act to proceedings pending in the High Court on that date.
The Court held that the petition would continue before the High Court of Delhi while upholding two main principles of law. First, a specific law prevails over a general law. Second, a procedural amendment has a retrospective effect unless otherwise stated in the statute.
[i] Jogendra Lal Saha v. State of Bihar and Others, 1991 Supp (2) SCC 654.