Arbitration placed in fast lane

When the Commercial Courts Act is invoked as against the Arbitration and Conciliation Act in a dispute between companies, it is the latter which will prevail as it is a special law. The object of both laws is an expeditious settlement of disputes. Therefore, in the interest of speedy decision, an appeal, which is not maintainable under the Arbitration Act, cannot be taken to a commercial court set up in the high courts. This observation was made by the Supreme Court last week while dismissing the appeal case, Kandla Export Corporation vs Oci Corporation. In this dispute, the foreign award went against the Kandla Corporation, which sold grain to the other party. It was asked to pay a total of $ 815,000 with a compound interest at the rate of 4 per cent. Its appeals before the English courts were dismissed. Oci Corporation then approached a Gujarat civil court for execution of the award. It was challenged by Kandla Corporation without success. On appeal, the high court dismissed the objection and allowed execution of the award. Aggrieved by that order, the Kandla Corporation filed an appeal under the Commercial Courts Act, which was later dismissed by the high court stating that the Act did not provide any additional right of appeal. Upholding that view, the Supreme Court asserted that in all arbitration cases of enforcement of foreign awards, it is the Arbitration Act (Section 50) alone that provides an appeal. The court also observed that “enforcement of foreign awards should take place as soon as possible if India is to remain as an equal partner, commercially speaking, in the international community... Given the objects of both the enactments, if we were to provide an additional appeal, we would be turning the Arbitration Act and the Commercial Courts Act on their heads.”