Special Appeal/ Letters Patent Appeal Against Order U/S.11 Of Arbitration Act Not Maintainable: Allahabad High Court

The Allahabad High Court has held that by virtue of Section 11(7) of the Arbitration and Conciliation Act, 1996, special appeal and letters patent appeal against orders passed under Section 11(4), (5) and (6) of the Act is not maintainable. The Court held that since the Amending Act of 2019 which did away with Section 11(7) had not been notified by way of Official Gazette, the bar placed by Section 11(7) is still in force.

Section 11(7) of the Arbitration and Conciliation Act, 1996 bars any appeal, including letters patent appeals against an order passed under Section 11(4), (5) and (6) of the Act by the Supreme Court or the High Court. By way of Section 3 of the Arbitration and Conciliation (Amendment) Act, 2019, Section 11(7) was omitted from the Act of 1996.

Case Background

In the appeal filed against the order of a Single Judge, it had been alleged that the Judge who decided the application under Section 11(4) of the Act had been the counsel for either party. However, when the Court perused the records of the case in which such appearance was alleged, the Court observed that the Single Judge, if at all, had held brief of his senior and had not signed the vakalatnama for any of the parties.

It was observed that this ground was never taken before the Single Judge during the hearing of the original application nor at the time of review. The Court held that it was not possible for the Single Judge to remember a mention he made in some appeal, 15 years ago while holding brief of his senior.

“The only reason we have narrated these facts is that in our view it is unfair to expect the learned Single Judge to remember that he had by chance appeared in some matter that too on behalf of his Senior in an application for recall and had informed the Division Bench in the aforesaid First Appeal From Order No. 718 of 2008 15 years ago in an appeal filed by the appellant that some proceedings had already been initiated elsewhere and then to recuse himself from hearing of the Application under Section 11 (4) of the Act 1996, 15 years thereafter, without being informed about the said fact.”

Holding the aforesaid ground taken by the appellant as untenable, the Court examined the issue of maintainability of the appeal as raised by the counsel for respondent.

Counsel for appellant argued that appeal against order under Section 11 of the Act did not fall under the orders excluded from the ambit of appeal under Chapter VIII Rule 5 of the Allahabad High Court Rules, 1952. It was further stated that Section 11(7) had been done away with by way of an amendment to the Act of 1996.

High Court Verdict

The Court observed that Section 1(2) of the Arbitration and Conciliation (Amendment) Act, 2019 provided the date of enforcement of the amending Act as the date on which it would be notified by the Central Government in the Official Gazette. It was further provided that different appointment dates shall be provided for different provisions and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Further the Court observed that vide notification dated 30.08.2019, Ministry of Law and Justice notified the appointing dates for Section 1, Sections 4 to 9 (both inclusive), Sections 11 to 13 (both inclusive) and Section 15 of the Amending Act 2019. However, no such date was given for Section 3 of the Act which omitted Section 11(7) of the Act was notified.

The bench comprising of Justice Rajan Roy and Justice Om Prakash Shukla held that

“Now, when we peruse the Amending Act 2019, we find that no date has been appointed for coming into force of Section 3 of the Amending Act 2019 by which Section 11 (7) of the original Act 1996 is sought to be omitted, meaning thereby, sub-Section (7) of Section 11 of the Act 1996 barring a Letters Patent Appeal/Special Appeal against an order passed under Section 11 (4) (5) (6) of the Act 1996, still exists, therefore, the bar continues so long as Section 3 of the Amending Act 2019 is not notified.”

The Court held that there being a specific bar on appeals against orders under Section 11(4), (5) and (6) in the Act of 1996, the Allahabad High Court Rules cannot be read contrary to it.

Accordingly, the special appeal was dismissed.

Case Title: M/S Moksh Innovations Inc. Lko. Thru. Manager Jitendra Singh Bisht vs. E City Property Management And Services (P) Ltd. New Delhi Thru. Property Manager And Others 2024 LiveLaw (AB) 324 [SPECIAL APPEAL DEFECTIVE No. - 266 of 2024]

Citation: 2024 LiveLaw (AB) 324

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