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21 February 2017

Appeal to High Court in a Commercial dispute – Delhi HC clarifies on appealable orders

A two-judge bench of the Hon’ble Delhi High Court, in HPL (I) Ltd. v. QRG Enterprises [FAO (OS) (COMM) No. 12/2017], has recently issued a ruling limiting the types of orders from which an appeal is permitted for a Commercial Dispute governed by the recently enacted Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015 (‘Commercial Courts Act’). The High Court has effectively held that the Commercial Courts Act does not expand the scope of orders other than decrees that are normally appealable under the Indian Code of Civil Procedure, 1908.

 

Facts in brief:

The Appellants in this case, including HPL (India) Limited, filed an appeal against an order dated 20.12.2016 passed by a Single Judge of the Delhi High court allowing the filing of new documents by way of examination-in-chief of new witnesses. The maintainability of this appeal was challenged.

 

Decision:

A Division Bench (DB) comprising 2-judges of the Delhi High Court held that the appeal was not maintainable and thus, dismissed the appeal.

 

Analysis:

The bone of contention between the parties came down to some ambiguous wordings in the appeal provision of the Commercial Courts Act. Although stating that an appeal will lie from a ‘decision’, when prescribing the timeline for such an appeal, Section 13 (1) of the Commercial Courts Act, uses the word ‘judgement’ or ‘order’. The term, ‘judgment’ in ordinary sense, refers to the statement of reasons given by a Court or Judge, and may apply to decrees passed after trial as well as to any other order. This broad language suggests that any and every order of a Court under the Commercial Courts Act would be appealable.

The DB observed that the Commercial Courts Act was enacted for the purpose of providing a method for speedy disposal of high value commercial disputes. Based on a more holistic heading of the legislation, the DB held that the word ‘judgement’ appearing in Section 13(1) of the Commercial Courts Act is a misnomer and actually relates more to a ‘decree’ issued after trial. The DB was primarily guided by the proviso to Section 13 that specifically limited the right to appeal from orders to those which are enumerated under Order XLIII of the CPC and nothing more. Therefore, when it comes to appeals against orders issued during the pendency of a suit, the Commercial Courts Act does not add or subtract from what is allowed under the Code of Civil Procedure applicable to normal civil suits.

The Commercial Courts Act was a special enactment passed to mandatorily conduct expedited trials for all commercial disputes beyond a certain minimum value. This includes intellectual property related disputes as well.

 

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