Allahabad High Court: Special Appeal Or Letters Patent Appeal Against Order Under Section 11 Of Arbitration Act Not Maintainable

Allahabad High Court: Special Appeal Or Letters Patent Appeal Against Order Under Section 11 Of Arbitration Act Not Maintainable

The Allahabad High Court ruled that due to Section 11(7) of the Arbitration and Conciliation Act, 1996, special appeals and letters patent appeals against orders issued under Section 11(4), (5), and (6) of the Act are not admissible. The Court clarified that as the Amending Act of 2019, which abolished Section 11(7), had not been officially gazetted, the restriction imposed by Section 11(7) remains effective.

Section 11(7) of the Arbitration and Conciliation Act, 1996, prohibits any appeal, including letters patent appeals, against an order issued under Sections 11(4), (5), and (6) of the Act by the Supreme Court or the High Court. Through Section 3 of the Arbitration and Conciliation (Amendment) Act, 2019, Section 11(7) was removed from the 1996 Act.

In the appeal lodged against the decree, it was claimed that the judge who adjudicated the petition under Section 11(4) of the Act had previously served as counsel for one of the parties. Nonetheless, upon scrutinizing the case records cited for such an alleged appearance, the Court noted that the judge, if involved at all, had acted as an assistant to their senior and had not endorsed the vakalatnama for any of the parties.

The Court noted that this argument was never raised before the Single Judge during the original application hearing or during the review process. It concluded that expecting the Single Judge to recall an incidental mention made in an appeal 15 years prior while acting as an assistant to their senior was unreasonable.

“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.”

Deeming the aforementioned argument presented by the appellant as unfounded, the Court scrutinized the question of the appeal's admissibility as raised by the respondent's counsel.

The appellant's counsel contended that an appeal against an order under Section 11 of the Act was not among the orders exempted from appeal under Chapter VIII Rule 5 of the Allahabad High Court Rules, 1952. Additionally, it was asserted that Section 11(7) had been abolished through an amendment to the 1996 Act.

The Court noted that Section 1(2) of the Arbitration and Conciliation (Amendment) Act, 2019 stipulated that the enforcement date of the amending act would be determined upon notification by the Central Government in the Official Gazette. Furthermore, it stipulated that distinct commencement dates would be designated for various provisions, and any mention of the commencement of this Act in any such provision would be interpreted as a reference to the enactment of that specific provision.

Additionally, the Court noted that through a notification dated August 30, 2019, the Ministry of Law and Justice specified the appointment dates for Section 1, Sections 4 to 9 (inclusive), Sections 11 to 13 (inclusive), and Section 15 of the Amending Act 2019. However, no specific date was provided for Section 3 of the Act, which omitted Section 11(7) of the Act.

The bench, comprising 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 ruled that due to the explicit prohibition on appeals against orders under Section 11(4), (5), and (6) in the 1996 Act, the Allahabad High Court Rules cannot be interpreted in opposition to them.

As a result, the special appeal was rejected.