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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
RITU RAJ AWASTHI, SURAJ GOVINDARAJ, JJ.
ITI Limited rep by its authorized signatory Mr. Raja Ram Pandey – Appellant
Versus
Alphion Corporation – Respondent
Commercial Appeal No. 32 of 2022
Decided on : 16-02-2022
COMAP - Commercial Appeal - Arbitration and Conciliation Act, 1996 (Section 34) - Commercial Courts Act, 2015 (Section 4, 5, 10) - The judgment discusses the maintainability of a Commercial Appeal under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an International Commercial Arbitration Award. It interprets the provisions of the Commercial Courts Act, 2015, and determines the jurisdiction and classification of cases for such challenges.
Fact of the Case:
The appellant filed a Commercial Appeal challenging an International Commercial Arbitration Award under Section 34 of the Arbitration and Conciliation Act, 1996. The dispute arose from a Technology Collaboration Agreement (TCA) executed between the parties for developing products and services in the telecom sector.
Finding of the Court:
The court found that a challenge to an International Commercial Arbitration Award can be made before the High Court of Karnataka. It determined that such challenges should be considered by a Commercial Division consisting of a Single Judge, and the pecuniary jurisdiction for the Single Judge would be unlimited. The court also clarified the appellate remedy and directed reclassification and transfer of pending proceedings to the Single Judge.
Issues: The court addressed the maintainability of a Commercial Appeal under Section 34 of the Arbitration and Conciliation Act, 1996, for challenging an International Commercial Arbitration Award. It also considered the jurisdiction, classification of cases, and the appellate remedy for such challenges.
Ratio Decidendi: The court interpreted the provisions of the Arbitration and Conciliation Act, 1996, and the Commercial Courts Act, 2015, to establish the jurisdiction and classification of cases for challenges to International Commercial Arbitration Awards. It emphasized the need for a Commercial Division consisting of a Single Judge and clarified the appellate remedy for such challenges.
Final Decision: The court held that challenges to International Commercial Arbitration Awards can be made before the High Court of Karnataka and should be considered by a Commercial Division consisting of a Single Judge. It directed reclassification and transfer of pending proceedings to the Single Judge and referred the matter to the Hon’ble Chief Justice for necessary administrative orders.
ORDER :
SURAJ GOVINDARAJ, J.
1. Upon the filing of the above matter, the registry has raised an objection as regards how a Commercial Appeal (COMAP) is maintainable when filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, ‘A & C Act, 1996’), since an award dated 07.10.2021 is sought to be set aside.
2. In response to the same, the appellant has filed a memo dated 26.01.2022 stating that the Commercial Division of this Court would have Jurisdiction to determine the dispute raised being a challenge to an award passed in an International Commercial Dispute. It is also stated that if this Court were to be of the opinion that a Commercial Appeal is not maintainable, leave be granted to convert the Commercial Appeal to an Arbitration Case or any such other case type as this Court deems fit. COMAP
3. Vide order dated 03.02.2022, a Co-ordinate Bench of this Court considering the submission of Sri.Nanda Kumar C.K., learned Senior Counsel appearing for the appellant that the proceedings of this nature would have to be considered by a Single Bench since the appellant will lose a forum of the appeal under Section 37 of the A & C Act, 1996, directed the Registrar (Judicial) to examine and put up a note on that behalf. Pursuant thereto, the Registrar (Judicial) has submitted a report on 10.02.2022. The said report reads as under:-
This Hon’ble Court vide order dated 03.02.2022 in Commercial Appeal No.32/2022 has passed the following order”
“Sri. Nandakumar C.K. learned Senior Advocate appearing for the appellant submits that in vide of Section 2(1),(II) of the Arbitration and Conciliation Act, 1996, a petition will be maintainable before a Court which has original jurisdiction. Therefore, the matter will have to be considered by Hon’ble Single Judge, otherwise the appellant will lose a forum of appeal under Section 37 of the Act. The Registrar (Judicial) shall examine and put up a note in this behalf.
Call on 10.02.2022”.
2. Section 4 of the Commercial Courts Act, reads as under:
“4(1) In all High Courts, having (ordinary original civil jurisdiction), the Chief Justice of the High Court may, by order, constitute Commercial Division having one or more Benches consisting of a single Judge for the purpose of exercising the jurisdiction and powers conferred on it under this Act.
4(2) The Chief Justice of the High court shall nominate such Judges of the High Court who have experience in dealing with commercial disputes to be Judges of the Commercial Division”
3. Section 10(1) of the Commercial Courts Act reads as under:
“10. Jurisdiction in respect of arbitration matters.- Where the subject-matter of an arbitration is a commercial dispute of a Special Value and –
(1) If such arbitration is an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation act 1996 (26 of 1996) that have been filed in a High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court.”
4. It is submitted that in the instant case, the appellant has called in question the International Arbitration Award before this Hon’ble Court Under Section 34 of the Arbitration and Conciliation Act by way of Commercial Appeal.
5. It is submitted that since out High Court does not have original civil jurisdiction, Commercial Division cannot be constituted as contemplated under Section 4 of the Commercial Court Acts and further all applications arising out of International Commercial Arbitration cannot be heard and disposed off by the Commercial Division.
6. It is submitted that Section 34 of the Arbitration and Conciliation Act makes provision for filing of application for setting aside the Arbitral Award. It is further submitted that the word "Court" has been defined under Section 2(1)(e)(ii) of the Arbitration and Conciliation Act as under:-
"2(1)(e)(ii) - in the case of international commercial
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