The main legal point established in the judgment is that waiver of rights and the application of arbitration laws are crucial in determining the jurisdiction of the Commercial Court in commercial disputes.

ORDER

1The captioned writ petition is filed by the defendant Nos.1 and 4 assailing the correctness of the order dated 31.03.2022 passed by the Commercial Court on I.A.No.11 filed under Order 7 Rule 11(d) read with Section 151 of CPC and Section 11 of the Commercial Courts Act, 2015.

2. The respondent No.1/plaintiff instituted a suit before the Commercial Court seeking a direction to the present petitioner No.1 to pay a sum of Rs.7,34,12,647/-. The present petitioners, on receipt of summons, have contested the proceedings and have filed the instant application under Order 7 Rule 11(d) read with Section 151 of CPC seeking rejection of plaint as being barred by law. The present petitioners claim that respondent No.1/plaintiff got issued a legal notice calling upon the present petitioner No.1 to resolve the dispute by way of arbitration. Therefore, the present petitioner contended that arbitral proceedings having already commenced at the instance of respondent No.1/plaintiff who has issued a notice, now cannot maintain a suit before the Commercial Court and the only recourse that is available for respondent No.1 is to file an application under Section 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') for appointment of an Arbitrator.

3. The learned Judge having heard both the parties and having examined the material has rejected the application. The learned Judge while rejecting the application has taken judicial note of the reply notice issued by the present petitioners herein. Having examined the reply notice, the learned Judge was of the view that the petitioners having objected for appointment of proposed sole Arbitrator on the ground that dispute does not fall within the arbitration clause, now cannot turn around and say that the present suit is not maintainable. The learned Judge while rejecting the application has also observed that the present petitioners have waived off their rights and therefore, they cannot insist the respondent No.1/plaintiff to adopt a recourse under Section 16 of the Act of 1996. It is this order which is under challenge.

4. Shri R.V.S.Naik, learned Senior Counsel reiterating the grounds urged in the writ petition would contend that the respondent No.1/plaintiff having issued the legal notice on 24.02.2020 has invoked the arbitration clause and therefore, he would contend that arbitration proceedings have already commenced by respondent No.1 and therefore, the suit filed by the respondent No.1/plaintiff before the Trial Court is barred under Section 11 of Commercials Courts Act. Referring to these significant details, he would contend that only recourse that is available to respondent No.1 is to file an application under Section 11 of the Act of 1996 for appointment of an Arbitrator.

5. To buttress his arguments, he has placed reliance on the judgment rendered by the Hon'ble Apex Court in the case of Mohammed Masroor Shaikh vs. Bharat Bhushan Gupta and Others[1]. Referring to the dictum laid down by the Hon'ble Apex Court, he would contend that Arbitral Tribunal is preferred first authority to determine and decide all questions of non-arbitrability. He has further placed reliance on the judgment rendered by the Hon'ble Apex Court in the case of Kvaener Cementation India Limited vs. Bajranglal Agarwal and Another, (2012) 5 SCC 214. He would point out that Hon'ble Apex Court has held that Section 16 of the Act of 1996 makes it explicitly clear that the Arbitral Tribunal has power to rule on its own jurisdiction even when objection is tendered with respect to existence or validity of Arbitration Act agreement. He would further contend that once arbitral proceedings commence, the same can be terminated in the manner known to law under Section 32 of Act of 1996 and therefore, he would contend that the instant suit is therefore wholly without jurisdiction. In support of the said proposition, he would place reliance on the judgment rendered by the Hon'ble Apex Court in the case of A.