VANIK INCORPORATION LTD v. L. D. SILVA AND OTHERS

010-SLLR-SLLR-2001-V-1-VANIK-INCORPORATION-LTD-v.-L.-D.-SILVA-AND-OTHERS.pdf


VANIK INCORPORATION LTD
v.L.D. SILVA AND OTHERS
SUPREME COURTS.N. SILVA, CJ.
WIJETUNGA, J. AND .
BAND ARAN AYAKE, J.
SC APPEAL NO. (CHC) 27/98HC (CIVIL) 10/97/ARB22nd MARCH. 2000
Arbitration – Arbitration award ■ Enforcement – Jurisdiction of the HighCourt – Parts VII and VIII of the Arbitration Act, No. 11 of 1995 – Whetherthe High Court of the Western Province ("Commercial High Court") hasjurisdiction to enforce the Award – Section 2(1) of the High Court of theProvinces (Special Provisions) Act. No. 10 of1996 – Appeal to the SupremeCourt – Section 37 of Act. No. 11 of 1995 – Appeal lodged under wrongstatute – Validity of the appeal.
The appellant, acting in terms of parts VII and VIII of the Arbitration Act.No. 11 of 1995 made an application to the High Court of Sri Lanka holdenin the Judicial Zone of Colombo (High Court of the Western Province) forthe enforcement of an award. The caption to the application described thecourt as Western Province Commercial High Court." It was filed beforethe High Court Judge of the court appointed by the Minister undersection 2(1) of the High Court of the Provinces (Special Provisions) Act.No. 10 of 1996 to exercise exclusive jurisdiction in respect of certaincivil matters arising out of "commercial transactions" specified in the131 schedule to the Act. For administrative convenience one of the Judgesof the High Court of the Western Province sitting at Colombo has beendesignated for this purpose: and the court is described as the"Commercial High Court."
The Court having entertained the application upheld a preliminaryobjection that as the “Commercial High Court" is exercising a "specialjurisdiction" it had no jurisdiction in respect of applications under theArbitration Act, No. 11 of 1995; and that the application was a “nullity".From that decision an application was made to the Supreme Court interms of section 5(2) of the High Court of the Provinces (SpecialProvisions) Act. No. 10 of 1996.
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Vanik Incorporation Ltd. v. LD. Silva and Others
(S.N. Silva. CJ.)
Ill
Held :
Notwithstanding the description of the Court as the "CommercialCourt" and statutory complications in the several names ascribed tothe court in the relevant statutes the true character of the courtbefore which the application was filed is that of “the High Court ofSri Lanka, holden in the Judicial Zone of Colombo" referred to in theinterpretation section 50ofAct. No. 11 of 1995: hence the applicationwas correctly made to the High Court referred to in parts VII and VIIIof the Arbitration Act, No. 11 of 1995. As such the court hadjurisdiction to enforce the award subject, however, to an appropriateamendment to the caption of the application.
The appeal to the Supreme Court, though erroneously made undersection 5(2) of the High Court of the Provinces (Special Provisions)Act, No. 10 of 1996. is referable to section 37 of the Arbitration. Act.No. 11 of 1995 in terms of which an appeal lies to the Supreme Courton a question of law, with leave. Hence the mistaken reference shallnot result in the rejection of the appeal.
Per S.N. Silva, CJ.
“This finding in favour of the appellant should not be constrained asa licence to make mistakes of this nature as noted above."
APPEAL from the judgement of the High Court Colombo.
K.N. Choksy. P.C. with Mrs. M. Petris. Ms. Kirisan Wyetunga and Mrs.
M. Dias for appellant.
R.K.W. Goonesekera. with Palilha Kumarasinghe. for respondents.
Cur. adv. vult.
August 24, 2000.
S.N. SILVA, CJ.This is an appeal from the decision of the High Court dated
03. 1998. By that decision the Judge held that the Courthas no jurisdiction in respect of the application of theAppellant. The application was dismissed on the basis thatthe “invocation" of jurisdiction was a nullity. The Courtabsolved itself so fully with the application to the extent of evenrefusing to make an order for costs.
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(2001] 1 SriUR.
The Appellant filed the said application by way of a petitionand affidavit on 09. 07. 1997 to enforce an arbitration awarddated 07. 11. 96 (marked B). It appears from the documentthat the award itself was made pursuant to a settlement.The caption of the petition states that the application wasbeing made in terms of Parts VII. and VIII of the ArbitrationAct, No. 11 of 1995. According to the proceedings of14. 11. 1997 the Court entertained the application by noting –
that it was presented within the period specified by section31(1) of the Arbitration Act:
the contents of the Arbitration agreement and the award:
that no application has been made to set aside the award:
that it is a local arbitration and the provisions of sections33 and 34 of the Arbitration Act which relate to foreignarbitral awards will not apply.
Accordingly the Court directed that notice be issued onthe Respondent to consider whether judgment should beentered in terms of the award. The Respondents raised certainobjections, the one relevant to this appeal is to the jurisdictionof the Court. This objection which found acceptance withthe Judge relates to the description of the Court in the captionas “Western Province Commercial High Court” (a directtranslation of the original document in Sinhala). The objectionwas upheld by the Judge on the basis that the “CommercialHigh Court” is exercising a special jurisdiction in terms of theHigh Court of the Provinces (Special Provisions) Act No. 10 of1996 and that it has no jurisdiction in respect of applicationsunder the Arbitration Act No. 11 of 1995. Accordingly it washeld that the invocation of jurisdiction was a “nullity” as notedabove.
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Vanik Incorporation Ltd. v. L.D. Silva and Others
(S.N. Silva, CJ.)
113
The Petitioner filed this appeal by way of an application forleave to appeal In terms of Section 5(2) of the High Court of theProvinces (Special Provisions) Act, No. 10 of 1996. Leave toappeal was granted on the question whether the High CourtJudge erred In coming to the finding that the Court had nojurisdiction to entertain the application for enforcement in termsof the Arbitration Act, No. 11 of 1995. The Respondent wasgranted leave to appeal on the question whether this Courtshould entertain the application for leave to appeal since thedecision is a judgment from which a final appeal should be filed.
The several provisions adverted to by Counsel refer to theCourts described as the High Court of the Republic of Sri Lanka,High Court of the Province, High Court of a judicial zone andthe Commercial High Court. The complications that manifestat the surface, pursuant to the several names ascribed to theCourt, may be untangled if the history of these institutions istraced.
The High Court was at first established in Sri Lanka as aZonal Court exercising original criminal jurisdiction by theAdministration of Justice Law, No. 44 of 1973. It therebysucceeded to the original criminal jurisdiction of the SupremeCourt established under the Courts Ordinance. Articles105(1 )(c) and 111(1) of the Constitution at the time of itsenactment in 1978 stated that the High Court of the Republicof Sri Lanka shall be the “highest Court of First Instanceexercising criminal jurisdiction.” The Judicature Act, No.2 of1978 provided for the exercise of this jurisdiction within judicialzones. Accordingly Judges are appointed by the President tothe High Court in terms of Article 111(2) of the Constitudonand each person so appointed is known as a “Judge of the HighCourt” in terms of Section 4 of the Judicature Act. Section 17 ofthe Judicature Act empowers the Chief Justice to “nominateand assign” a Judge of the High Court to exercise jurisdiction inany specific zone.
The Eleventh Amendment to the Constitution effected in1987 substituted a new provision as Article 111(1) which
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removed the description that it is “the highest court of FirstInstance exercising criminal jurisdiction." The substitutedprovision reads thus :
“There shall be a High Court of Sri Lanka, which shallexercise such jurisdiction and powers as Parliament mayby law vest or ordain.”
However Article 105( 1 )(c) which describes the “High Courtof the Republic of Sri Lanka” as being one of the courts of FirstInstance was not amended. Be that as it may, the EleventhAmendment in effect paved the way for the Court to be vestedwith original and appellate jurisdiction.
The next significant change was effected by the ThirteenthAmendment also enacted in 1987. It introduced Article 154P( 1)which provides for a High Court for each Province. Article154P(2) empowers the Chief Justice to "nominate, from amongJudges of the High Court of Sri Lanka such number of judgesas may be necessary to each such (Provincial) High Court." TheCourt thus constituted is vested with an extensive jurisdictioncovering original criminal jurisdiction, appellate jurisdiction andwrit jurisdiction. The High Court of the Provinces (SpecialProvisions) Act, No. 19 of 1990 and the amendments to theWorkmen’s Compensation Ordinance vested further appellatejurisdiction in this Court.
It is in the wake of this rapid expansion of the jurisdictionof the institution previously known as the High Court of SriLanka (vide Article 105( 1)(c) and Article 111(1)) that theenactments with which we are immediately concerned, weremade. The Arbitration Act, No. 11 of 1995 was intended as isevidenced by its recital “to make comprehensive legal provisionfor the conduct of arbitration proceedings and the enforcement
of awards” An examination of the provisions of the Act shows
that the High Court is vested with jurisdiction referable to variousstages of the arbitral process, to aid and assist the process andto give it the thrust of judicial sanction, where needed. The HighCourt has jurisdiction to enforce awards and to set aside awards
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Vanik Incorporation Ltd. v. L.D. Silva and Others
(S.N, Sllua, CJ.)
115
In given situations. The sections In the body of the Act describethe Court vested with this jurisdiction plainly as the “HighCourt.” The interpretation clause of the Act (section 50) definesthe phrase “High Court’” to mean the High Court of Sri Lanka,holden in the judicial zone of Colombo or holden in such otherzone, as may be, designated by the Minister with the concurrenceof the Chief Justice, by Order published in the Gazette."
The Minister has not designated any court as provided inthe second part of the definition. Hence the Court vested withjurisdiction under the Arbitration Act is the one referred to inArticle 105(1 He) and 111 of the Constitution and section 4 ofthe Judicature Act as the High Court of Sri Lanka. The territorialjurisdiction of the particular court is stated with reference tothe division of the country into zones effected in terms of section3 of the Judicature Act. The particular zone identified is thejudicial zone of Colombo. Thus on a plain interpretation of thedefinition in section 50 of the Arbitration Act, the High Court ofSri Lanka held in the judicial zone of Colombo, will havejurisdiction as provided for in the Act including the jurisdictionto enforce arbitral awards. A fortiori a Judge of the High Courtof Sri Lanka holding court in the judicial zone of Colombo mayexercise that jurisdiction. The Judge who made the impugnedorder has at all material times been a Judge of the High Courtof Sri Lanka holding Court under the territorial limits of theJudicial Zone of Colombo. In addition to that the records showthat on 10.10.1996 the Chief Justice has nominated him toexercise the jurisdiction of the High Court in terms of theArbitration Act, No. 11 of 1995.
In the circumstances the Judge who made the impugnedorder and the Court in which he presided was amply seizedwith jurisdiction to hear and determine the application for theenforcement of the arbitral award. The proceedings of14.11.1997 referred to above have been taken on a clearassumption of jurisdiction. The Judge appears to have swayedto the contrary view by the description of the Court in the captionas the “Commercial High Court.” This leads me to advert to thelast description of the High Court mentioned at the
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commencement of the Judgment. The High Court of theProvinces (Special Provisions) Act, No. 10 of 1996 was enactedto empower the Provincial High Court to exercise Jurisdiction inrespect of certain civil matters. The First Schedule to the Actspecifies that such jurisdiction shall be exercised in relation toactions where the cause of action has arisen out of commercialtransactions. The Minister has in terms of section 2(1) of theAct appointed the High Court of the Western Province and interms of section 2(2)(a) the High Court of the Western Provincesitting at Colombo will exercise that jurisdiction. Foradministrative convenience one of the Judges of the High Courtof the Western Province sitting at Colombo is specially designatedfor this purpose and for similar reasons there is a separateRegistry. These administrative arrangements have resulted inthe Court exercising this jurisdiction being described as the“Commercial Court." The appendage “Commercial” should betaken merely as a reference to the administrative arrangementsreferred above and no more. The Petitioner was in error whenhe described the Court in the caption as “Western ProvinceCommercial High Court" as noted above. However, immediatelybeneath that description the Petitioner has recited that theapplication is being made in terms of Parts 7 and 8 of theArbitration Act, No. 11 of 1995. Therefore in my view there is aproper invocation of the jurisdiction of the High Court. Therewas certainly no basis to consider the application to be a nullityas stated in the impugned order. The proper course of actionwould have been for the Judge, who is vested with jurisdiction,to direct an amendment of the caption to bring it in line withthe recital that appears beneath the name of the Court. In thecircumstances I would answer the first question on which leaveto appeal has been granted in favour of the Appellant.
The second question relates to the manner in which theapplication for leave to appeal has been presented to this Court.Where an application has been made to the High Court for theenforcement of an arbitral award an appeal lies to this Court interms of Section 37 of the Arbitration Act on a question of law,with leave. The Petitioner has correctly addressed the application
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Vanik Incorporation Ltd. v. L.D. Silva and Others
(S.N. Silva, CJ.)
117
for leave to appeal to this Court but has erred in the recital bystating that it is an application in terms of section 5(2) of Act,No. 10 of 1996. This recital is incorrect since the provisions ofAct, No. 10 of 1996 have no bearing on the proceedings at issue,as noted above. In the application to the High Court thePetitioner has made a mistake in the description of the Courtbut described the application correctly in the recital. On theother hand, in the application for leave to appeal, the Petitionerhas described the Court correctly but has erred in citing anincorrect legal provision in the recital. Since the Court is properlydesignated and the application is for leave to appeal, as it shouldbe in terms of section 37 of the Arbitration Act, I am of the viewthat the mistaken reference to Act, No. 10 of 1996 should notresult in the rejection of the appeal. This finding in favour of theappellant should not be construed as a licence to make mistakesof this nature as noted above. These mistakes may be the resultof the complications that manifest and surface in the process inwhich the jurisdiction of the High Court has evolved. However,these complications would be untangled if each type ofjurisdiction vested in the Court is seen in its proper perspective.Legal practitioners cannot be absolved from engaging in suchstudy since they too are presumed to know the law.
The appeal is allowed. I set aside the order dated 16.3.1998and refer the matter back for a hearing on the issues other thanthose dealt with in this Judgment. Considering all thecircumstances of the case, I make no order for costs.
WIJETUNGA, J.I agree.BAND ARANAYAKE, J.1 agree.Appeal allowed.