SUMITOMO CORPORATION versus CDC FINANCIAL SERVICES (MAURITIUS) LTD. & ORS.

Citation: [2008] 3 S.C.R. 309 · Decided: 22-02-2008 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Dismissed
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Judgment (excerpt)

[2008] 3 S.C.R. 309 
SUMITOMO CORPORATION 
A 
II. 
CDC FINANCIAL SERVICES (MAURITIUS) LTD. & ORS. 
(Civil Appeal No. 1496 of 2008) 
FEBRUARY 22, 2008 
B 
[TARUN CHATTERJEE AND P. SATHASIVAM, JJ.] 
~ 
Companies Act, 1956 - ss.10(1)(a), 10F - Appeal -
Territorial jurisdiction - Order of Company Law Board refusing 
to refer the parties to arbitration uls. 45 of the Arbitration Act -
c 
· Appeal against - Held: Shall lie to the High Court within 
;urisdiction of which the Registered Office of the company in 
issue is situatea - Arbitration and Conciliation Act, 1996 -
ss.50,45. 
Respondent Nos.1 to 5 filed company petition before D 
~ 
the Company Law Board (CLB) seeking redressal under 
ss.397, 398 and 402 of the Companies Act, 1956 for 
oppression and mismanagement on the part of Appellant 
and the nominee directors of Appellant in the management 
and conduct of the affairs of Respondent No.6, the E 
company in issue. In the company petition, Appellant filed 
an application seeking reference to arbitration under s.45 
of the Arbitration and Conciliation Act, 1996. The CLB 
passed order refusing to refer tlie parties to arbitration . 
._, 
Appellant filed appeal before the High Court under. s.50 
F 
of the said Arbitration Act. High Court dismissed the appeal 
not on merits but for lack of territorial jurisdiction holding 
that s.10(1)(a) of the Companies Act will take precedence 
over s.50 of the Arbitration Act. 
In the present appeal, the question which arose for G 
consideration is whether the order passed by the CLB 
refusing to refer the parties to arbitration under s.45 of 
y 
the Arbitration Act was liable to be challenged before the 
forum under s.50 of the Arbitration Act or before the forum 
309 
H 
310 
SUPREME COURT REPORTS 
[2008] 3 S.C.R. 
A under s.10(1)(a) of the Companies Act. 
Dismissing the appeal, the Court 
HELD: 1.1. The reading of s.50 of the Arbitration Act 
clearly suggests that an appeal shall lie from the order of 
B the CLB to the Court authorized by law to hear the appeals 
from such order of the CLB. To make it clear that in the 
event the order under s.45 is passed by the CLB, the forum 
;; 
which is provided under law for hearing the appeal from 
the order of the CLB, will be the Appellate Forum. In other 
c words, while s.50 of the Arbitration Act provides for the 
orders which can be made the subject-matter of the 
appeal, the forum to hear the appeal is to be tested with 
reference to the appropriate law governing the authority 
or forum which passed the original order, that is, in the 
D case on hand, the CLB. S.10F read with s.10(1)(a) of the 
Companies Act provides for such forum to hear the appeal 
.... 
from the orders of the CLB as the High Court within the 
jurisdiction of which the Registered Office of the company 
in issue is situated. [Para 9J [320-E"H; 321-AJ 
E 
1.2. An appeal against any order of the CLB including 
an order passed refusing reference to arbitration shall lie 
to the High Court within the jurisdiction of which the 
Registered Office of the company is situated. That is the 
reason s.50 of the Arbitration Act' purposively uses the 
, .. 
F expression "authorized by law to hear the appeal". 
[Para 1 OJ [321-A, BJ 
1.3. It cannot be that an order passed by the CLB 
becomes appealable to a civil court or a court exercising 
civil jurisdiction when Parliament has chosen to provide 
G for a specific appellate forum which should hear the appeal 
from the orders of the CLB. [Para 1 OJ (321-B, CJ 
1.4. Ouster of jurisdiction arises only in regard to 
original jurisdiction and it cannot have any application to 
H appellate jurisdiction as the one provided in s.50 of the 
SUMITOMO CORPN. v. CDC FINANCIAL SERVICES 
311 
¥ 
(MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.) 
Arbitration Act. The appeal is a statutory remedy and it A 
can lie only to the specified forum. The appellate forum 
cannot be decided on the basis of cause of action as 
applicable tll original proceedings such as suit which 
could be filed in any court where part of cause of action 
arises. [Para 12] [323-C, D, E] 
B 
;i. 
Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway 
Petroleums, (2003) 6 SCC 503; Bhatia International vs. Bulk 
Trading S.A., (2002) 4 SCC 105; Smt. Ganga Bai v. Vijay 
Ku.mar and Ors. (1974) 2 SCC 393; Stridewell Leathers (P) c 
Ltd. and Ors. v. Bhankerpur Simbhaoli Beverages (P) Ltd., 
and Ors. (1994) 1 SCC 34; Hind Samachar Ltd. Jalandhar v. 
Smt. Sudarshan Chopra and Ors. (2002)
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