2018 Supreme(Bom) 1016
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. PATEL, J.
Nandbala Nathala Mayani - Decree Holder
Versus
Jaswantrai Chhaganlal Mayani & Ors - Judgment Debtor
Execution Application No. 530 of 2011 with Chamber Order No. 916 of 2012 in with Chamber Summons No. 1170 of 2017 in with Notice of Motion (L) No. 1538 of 2018 with Garnishee Notice No. 1302, 1303 of 2017
Decided on : 16-07-2018
Advocate Appeared:
For the Decree Holder : Mr Kamal Khata, with Mr Ashish Anand, Siddhi Vora, I/b Nityoah Suneel & Associates.
For the Judgment Debtor : Dr Abhinav Chandrachud, with Mr Akshay Udeshi, I/b Sanjay Udeshi & Co, Mr NJ Devashrayee.
The main legal point established in the judgment is the interpretation of the word 'court' in Section 36 of the Arbitration & Conciliation Act, 1996, and its implications on the enforcement of arbitral awards.
Headnote:
Arbitration Act - Enforcement of Arbitral Award - Section 36 - [ARBITRATION ACT, 1996, SECTION 36] - The court discussed the interpretation of Section 36 of the Arbitration & Conciliation Act, 1996, specifically focusing on the use of the word 'court' in different contexts and its implications on the enforcement of arbitral awards. The court emphasized the distinction between 'court' and 'Court' as defined in Section 2(1)(e) and highlighted the legislative intent behind the amendments to the Act. The judgment also referenced relevant case law and the Law Commission's recommendations to support its interpretation of Section 36.
Fact of the Case:
The judgment debtor raised an objection regarding the enforcement of an arbitral award under Section 36 of the Arbitration & Conciliation Act, 1996, based on the use of the word 'court' in different contexts and its implications.
Finding of the Court:
The court analyzed the interpretation of Section 36 and emphasized that the use of 'court' in lower case in Section 36(1) should be detached from the definition of 'Court' in Section 2(1)(e). The court disagreed with the judgment debtor's interpretation and highlighted the legislative intent behind the amendments to the Act.
Issues: The key issue revolved around the interpretation of the word 'court' in Section 36 of the Arbitration & Conciliation Act, 1996, and its implications on the enforcement of arbitral awards.
Ratio Decidendi: The court's decision was based on the interpretation of the legislative intent behind the amendments to the Act and the distinction between 'court' and 'Court' as defined in Section 2(1)(e). The court also relied on relevant case law and the Law Commission's recommendations to support its interpretation of Section 36.
Final Decision: The court declined the judgment debtor's objection and emphasized that the enforcement of an arbitral award under Section 36(1) should not be limited to a 'Court' as defined in Section 2(1)(e), highlighting the generalised use of the word 'court' in the provision.
1. There is a preliminary objection — at least that is how it is described — by the Judgment Debtor represented by Dr Chandrachud. Respondent No.1 is a partner of the Judgment Debtor firm. It is, I think, something of a misnomer to say that there is anything preliminary about this objection. The Award dated 21st January 2011 has been in execution for some time. The Execution Application itself is now seven years old. There have been Garnishee Proceedings against banks and amounts have been received in this Court. Those are the subject matter of separate orders. The Award itself was in the amount of Rs.40,57,895/- (inclusive of legal expenses of Rs.2,25,000/-).
2. The objection on behalf of the Judgment Debtors is this. According to them, following the 2015 amendment with effect from 23rd October 2015 to the Arbitration & Conciliation Act, 1996 (“the Arbitration Act”), Section 36 uses the word “Court” in quite distinct contexts in its sub-section. Section 36 of the Arbitration & Conciliation (Amendment) Act, 2015 as amended reads:
“36. Enforcement — Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:
Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908.” (Emphasis added)
3. The distinction that Dr Chandrachud draws is in the use of the lower case ‘court’ in Section 36(1) as opposed to the capitalised ‘Court’ in sub-sections 2, 3 and in Section 34 of the Act, There is an inconsistency in the printed copies of the Arbitration & Conciliation (Amendment) Act, 2015. The publication from Universal Law Publishing Co. Pvt. Ltd. uses the lower case “c”. The one from Professional Book Publishers uses the capitalised “C” throughout. In this judgment, I have referred to the Gazette copy of the Act. It is his submission that Section 2(1)(e) contains a definition of only the latter use, i.e. Court with the upper case “C” and it reads thus:
“2(1)(e) “Court” means—
(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court”
4. He therefore submits that the enforcement of an award under Section 36(1) must be through a ‘court’ that has the necessary pecuniary