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2022 Supreme(SC) 1691

SUPREME COURT OF INDIA
M.R. Shah, M.M. Sundresh, JJ.
Yashpal Chopra And Co. – Appellant
Versus
Union of India & Ors. – Respondents
Petition for Special Leave to Appeal (C) No. 18324 of 2022 (Arising Out of Impugned Final Judgment and Order Dated 04-05-2022 in Arba No. 31 of 2012 Passed by the High Court of Orissa at Cuttack)
Decided On : 31-10-2022

Advocates appeared:
Ms. Meenakshi Arora, Sr. Advocate, Mr. Tushar Arora, Advocate, Ms. Reena Pandey, Advocate, Ms. Manjulika Pal, Advocate, Mr. Anurag Pandey, Advocate, For the Appellant.

The appropriate 'Court' for proceedings under Section 34 of the Arbitration Act is determined based on the original jurisdiction, as defined under Section 2(e) of the Arbitration Act.

Headnote:

Arbitration Act - Jurisdiction - The High Court of Orissa does not possess original jurisdiction, and therefore, the proceedings under Section 34 of the Arbitration Act against the award passed by the Arbitrator shall lie before the concerned District Court, as defined under Section 2(e) of the Arbitration Act.

Fact of the Case:

The High Court of Orissa allowed an appeal and set aside the order passed by the District Court, remanding the matter to the District Court to decide and dispose of the Section 34 application on its merits.

Finding of the Court:

The High Court's decision was upheld, stating that the concerned District Court is the appropriate 'Court' for proceedings under Section 34 of the Arbitration Act.

Issues: Jurisdiction under Section 34 of the Arbitration Act.

Ratio Decidendi: The High Court of Orissa does not possess original jurisdiction, and therefore, the concerned District Court is the appropriate 'Court' for proceedings under Section 34 of the Arbitration Act.

Final Decision: The Special Leave Petition was dismissed, and the impugned judgment and order passed by the High Court were not required to be interfered with.

Legal Category Hierarchy

  • practice and procedure
    • arbitration law
      • jurisdiction
        • section 34 applications (Para 3, 4)

Table of Contents

1. Challenge to High Court order remanding a Section 34 Arbitration Act application to the District Court after the District Court had dismissed it as not maintainable. (Para 1 )

2. Contention that only the High Court exercising jurisdiction under Section 11 of the Arbitration Act constitutes the Court for filing applications under Section 34. (Para 2 )

3. The High Court of Orissa lacks original jurisdiction; thus, the principal Civil Court of original jurisdiction in the district is the Court under Section 2(e). (Para 3 , 4 )

4. Where the High Court lacks original jurisdiction, the principal Civil Court of original jurisdiction in a district is the Court for Section 34 applications. (Para 3 , 4 )

5. Special Leave Petition dismissed; High Court order remanding the Section 34 application to the District Court upheld. (Para 4 )

6. Which court has jurisdiction over Section 34 applications under the Arbitration Act in regions where the High Court lacks original jurisdiction?

The principal Civil Court of original jurisdiction in the district is the designated Court for such applications, as per Section 2(e)(i) of the Arbitration Act. (Para 3 , 4 )

7. Does the High Court's exercise of jurisdiction under Section 11 make it the exclusive Court for Section 34 applications?

No, the Court for Section 34 applications is determined by Section 2(e), which considers the court's ordinary original civil jurisdiction rather than its Section 11 appointment powers. (Para 2 , 3 , 4 )

ORDER

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 04.05.2022 passed by the High Court of Orissa at Cuttack in Arbitration Appeal No. 31 of 2012 by which the High Court has allowed the said Appeal and set aside the order passed by the concerned District Court dismissing the application under section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Arbitration Act') as not maintainable and has consequently remanded the matter to the concerned District Court to decide and dispose of Section 34 application on merits, the original respondent before the High Court has preferred the present Petition.

2. Ms. Meenakshi Arora, learned Senior Advocate appearing on behalf of the petitioner has heavily relied upon Section 42 of the Arbitration Act and Section 11 of the Arbitration Act, as amended, in support of her submission that the High Court, who has exercised the jurisdiction under Section 11 of Arbitration Act alone can be said to be 'Court' and, therefore, Section 34 application shall lie before the concerned High Court only.

3. The aforesaid has no substance. It is an admitted position that so far as Orissa High Court is concerned, the same does not possess the original jurisdiction. The 'Court' is defined under Section 2 (e) of the Arbitration Act, which reads as under-

'2(e) 'Court' means-

(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;'

4. Therefore, in the absence of the High Court of Orissa having original jurisdiction, the concerned District Court can be said to be 'Court' and, therefore, the proceedings under Section 34 of the Arbitration Act against the award passed by the Arbitrator shall lie before the concerned District Court, as defined under Section 2(e) of the Arbitration Act. In that view of the matter, the High Court has not committed any error in passing the impugned judgment and order and remanding the matter to the concerned District Court/Court to decide Section 34 application in accordance with law and on its own merits. Therefore, in the facts and circumstances of the case, impugned judgment and order passed by the High Court is not required to be interfered with. The Special Leave Petition stands dismissed.

5. Pending application(s) shall stand disposed of.

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