1. Dispute arising from a contract where a Section 9 application was filed in one court, followed by a Section 11(6) application in a different High Court. (Para 3 , 4 )
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2022 Supreme(SC) 623
SUPREME COURT OF INDIA
M.R. SHAH, B.V. NAGARATHNA, JJ.
General Manager East Coast Railway Rail Sadan and Another – Appellants
Versus
Hindustan Construction Co. Ltd. – Respondent
Civil Appeal No. 4747 of 2022
Decided On : 22-07-2022
Advocates appeared:
For the Appellant(s) :K.M. Nataraj, ASG Vivek Gupta, Kanu Agrawal, Shailesh Madiyal, Deepabali Dutta, A. Srinivas Udupa, Amrish Kumar, Advocates
For the Respondent(s):Amit Dubey, Anurag Dubey, Sarthak Dubey, Atishi Dipankar, Advocates
For the Appellant(s) :K.M. Nataraj, ASG Vivek Gupta, Kanu Agrawal, Shailesh Madiyal, Deepabali Dutta, A. Srinivas Udupa, Amrish Kumar, Advocates
For the Respondent(s):Amit Dubey, Anurag Dubey, Sarthak Dubey, Atishi Dipankar, Advocates
IMPORTANT POINT
Appointment of Arbitrator – There cannot be multiple seats of arbitration.
Headnote:
Arbitration and Conciliation Act, 1996 – Section 11(6) read with Sections 9 and 42 – Appointment of Arbitrator – Before filing application under Section 11(6) of Act before High Court of Orissa at Cuttack, respondent-claimant moved application before Court at Visakhapatnam under Section 9 of Arbitration Act – In that view of matter considering Section 42 of Arbitration Act, High Court of Andhra Pradesh at Hyderabad alone would have jurisdiction to decide subsequent applications arising out of Contract Agreement and further arbitral proceedings shall have to be made in High court of Andhra Pradesh at Amaravati alone and in no other court – High Court of Orissa at Cuttack has committed serious error in entertaining application under Section 11(6) of Act before it and appointing Sole Arbitrator – Impugned judgment and order passed by High Court of Orissa quashed and set aside solely on the ground that High Court of Orissa at Cuttack would have no jurisdiction to entertain application under Section 11(6) of Act with respect to contract agreement for which respondent claimant earlier initiated arbitration proceedings under Section 9 of Arbitration Act in Court at Vishakhapatnam. (Paras 7.1 and 8)
Facts of the case:
Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Orissa at Cuttack in Arbitration Petition No.10 of 2021 by which the High Court in exercise of powers under Section 11(6) of Arbitration and Conciliation Act, 1996 has appointed an Arbitrator to adjudicate the dispute between the parties, the original informant – General Manager, East Coast Railway, have preferred present appeal.
Findings of Court:
It will be open for the respondent claimant to submit/move an application under Section 11(6) of the Act before competent High Court having jurisdiction namely the High Court of Andhra Pradesh at Amaravati and if such an application is made before the High Court of Andhra Pradesh at Amaravati within a period of four weeks from today, the same be dealt with and considered in accordance with law and on its own merits at the earliest.
Result : Appeal allowed.
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Table of Contents
2. Whether a High Court has jurisdiction under Section 11(6) when a prior application under Section 9 was filed in a court within another High Court's jurisdiction. (Para 4 , 6 )
3. Not opposing the appointment of an arbitrator does not confer jurisdiction upon a court if it otherwise lacks jurisdiction under the law. (Para 6 )
4. Under Section 42 of the Arbitration Act, the court where the first application is made has exclusive jurisdiction over all subsequent applications arising from that agreement. (Para 7 )
5. Impugned order quashed and set aside; respondent permitted to move a Section 11(6) application before the competent High Court. (Para 8 , 9 )
6. Does the lack of opposition to the appointment of an arbitrator confer jurisdiction on a court?
No. The court held that even if a party does not oppose the appointment of an arbitrator in principle, such a fact does not confer jurisdiction upon a court if it otherwise lacks jurisdiction under the law. (Para 6 )
7. What is the effect of Section 42 of the Arbitration and Conciliation Act, 1996 regarding jurisdiction?
Section 42 mandates that if any application under the Act is made in a court with respect to an arbitration agreement, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement. (Para 7 )
8. If a Section 9 application is filed in a district court, which High Court has jurisdiction for a subsequent Section 11(6) application?
The High Court that has jurisdiction over the court where the Section 9 application was filed shall have exclusive jurisdiction to entertain subsequent applications, such as those under Section 11(6). (Para 8 )
JUDGMENT :
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Orissa at Cuttack in Arbitration Petition No. 10 of 2021 by which the High Court in exercise of powers under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) has appointed an Arbitrator to adjudicate the dispute between the parties, the original informant-General Manager, East Coast Railway Rail Sadan and Another, have preferred the present appeal.
2. As such the dispute in the present appeal is in a very narrow compass.
3. The dispute arose between the appellant and the respondent with respect to the contract/agreement dated 29.11.2018. That the respondent herein original claimant initiated the proceedings under Section 9 of the Arbitration Act before the learned Additional District Judge, Visakhapatnam seeking interim injunction against the encashment of Performance Bank Guarantee and forfeiture of security deposit. The said application came to be allowed by the learned Additional District Judge vide order dated 06.11.2019 restraining the appellants herein from forfeiting security deposit for period of six months except on the special circumstances.
4. That thereafter the respondent vide letter dated 01.12.2019 requested the appellant to constitute the Arbitral Tribunal raising five claims. It appears that in terms of the Arbitration Agreement, arbitration proceedings were initiated by the appellants by appointing an arbitrator to adjudicate the dispute between the parties. That the Arbitrator issued notices calling upon the parties to submit their respective claims. The respondent herein sought time vide letter dated 02.04.2020 for filing the claim in view of Covid-19 Pandemic. The Arbitrator adjourned the proceedings to 03.04.2020. Instead of submitting the claim, vide letter dated 01.09.2020 the respondent questioned the validity of arbitral tribunal. Thereafter the respondent filed the Arbitration Petition No. 10 of 2021 before the High Court of Orissa at Cuttack under Section 11(6) of the Act seeking appointment of an Arbitrator. The said application was opposed by the appellants relying upon Section 42 of the Arbitration Act and it was the case on behalf of the appellants that in view of Section 42 of the Arbitration Act, the application under Section 11(6) of the Act shall lie before the High Court of Andhra Pradesh at Amaravati as the respondent itself earlier filed Section 9 application before the Court at Vishakhapatnam. It was also submitted on behalf of the appellants that procedure dated 16.11.2016 upon which reliance has been placed by the respondent was superseded by GCC issued by Railway Board in November, 2018. Despite the above jurisdictional issue raised and without addressing on the jurisdiction of the Orissa High Court, by the impugned judgment and order the High Court of Orissa at Cuttack has appointed the Arbitrator solely by observing that since the appellant, East Coast Railways in principle, is not opposing the appointment of an Arbitrator there is little purpose served in relegating the respondent (original petitioner) to the appropriate High Court as that will only delay the adjudication of the disputes.
5. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Orissa at Cuttack, the original respondent-General Manager-East Coast Railway has preferred the present appeal.
6. We have heard Shri K.M. Natraj, learned ASG appearing on behalf of the appellants and Shri Amit Dubey, learned Counsel appearing on behalf of the respondent. We have gone through the impugned judgment and order passed by the High Court. A specific objection was raised by the appellant herein before the High Court on the entertainability and/or maintainability of the application under Section 11(6) of the Arbitration Act before the Orissa High Court. Reliance was placed on Section 42 of the Arbitration Act and it was
