Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2019 Supreme(Bom) 704

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. PATEL, J.
Global Asia Venture Company - Appellant
Versus
Arup Parimal Deb - Respondent
Comm Execution Application No. 58 of 2017; Chamber Summons No. 706 of 2017, 66 of 2016; Comm Chamber Summons (L) No. 599 of 2019; Comm Execution Application (L) No. 2113 of 2018, 2195 of 2018; Comm Chamber Summons No. 1030 of 2018, 1131 of 2018
Decided On : 26-04-2019

Advocates Appeared:
Sharan Jagtiani, Adv., Siddharth Rathod, Adv., Riya Chopra, Adv., Nishith Desai Associates, Adv., Jyoti Sinha, Adv., Devangshu Nath, Adv., Pratiksha Basarkar, Adv., Khaitan & Co, Adv., Nitesh Jain, Adv., Juhi Mathur, Adv., Atika Vaz, Adv., Shardul Amarchand Mangaldas, Adv., Prashant Pratap, Adv., Kumar Abhishek Singh, Adv., Shubham Agrahari, Adv., Nishant Bhatiya, Adv., Jahnavi Agrawal, Adv., Nishaan Shetty, Adv., Anoma Law Group Llp, Adv., Pravin Samdani, Adv., Prathamesh Kamat, Adv., Anchal Singhania, Adv., Nivit Srivastava, Adv., Sneha Patil, Adv., Maniar Srivastava Associates, Adv., Yogesh Dandekar, Adv., Md Shahid, Adv., Mayur Khandeparkar, Adv., M.B. Kale, Adv., Juhi Bhogle, Adv., G.N.P. Legal, Adv., S.S. Prabhune, Adv.

The main legal principle established in the judgment is that the enforcement of arbitral awards transcends territorial barriers and can be filed wherever in the country a decree can be executed.

Headnote:
Territorial Jurisdiction - Code of Civil Procedure 1908 - Section 39(4) - The court discussed the interpretation and application of Section 39(4) of the Code of Civil Procedure 1908 in the context of enforcement of arbitral awards or orders under the Arbitration and Conciliation Act 1996. The court analyzed the jurisdictional issues and the applicability of the Code in execution proceedings for enforcement of arbitral awards.
Fact of the Case:

The respondents in three execution applications questioned the maintainability of the claimants' execution proceedings based on territorial jurisdiction. The respondents argued that the enforcement of arbitral awards or orders under the Arbitration and Conciliation Act 1996 could not be maintained in the court due to the assets being outside the local limits of the court's jurisdiction.
Finding of the Court:

The court analyzed the definition of 'Court' under Section 2(1)(e)(i) of the Arbitration and Conciliation Act 1996 and discussed relevant case laws such as Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc. (BALCO), Sundaram Finance Ltd v Abdul Samad & Anr, and Gemini Bay Transcription Pvt Ltd., Nagpur v Integrated Sales Service Ltd & Ors. The court held that the enforcement of arbitral awards transcends territorial barriers and can be filed wherever in the country a decree can be executed.
Issues: The main issue was the maintainability of the claimants' execution proceedings based on territorial jurisdiction and the applicability of Section 39(4) of the Code of Civil Procedure 1908 in the context of enforcement of arbitral awards.
Ratio Decidendi: The court's decision was based on the interpretation of the definition of 'Court' under Section 2(1)(e)(i) of the Arbitration and Conciliation Act 1996, relevant case laws, and the principle that the enforcement of arbitral awards transcends territorial barriers.
Final Decision: The court held that there was no substance to the preliminary objection and allowed the execution to proceed in the court. The court scheduled further orders for the execution applications and associated chamber summons.

JUDGMENT :

G.S. PATEL, J.

1. The respondents in all three execution applications question the maintainability of the claimants' execution proceedings. The objection is of territorial jurisdiction or territoriality, namely, that the respondents in execution, or the parties against whom execution is sought in these proceedings, and their assets are all outside the local limits of the jurisdiction of this Court. Therefore, the respondents argue, Section 39(4) of the Code of Civil Procedure 1908 ("the Code") will govern. Since a court that passed the decree cannot execute it against any person or property outside the local limits of its jurisdiction, therefore, these execution proceedings, although they are not in execution of a court decree but in enforcement of arbitral awards or orders under the Arbitration and Conciliation Act 1996 (as amended), cannot be maintained in this Court. The submission is that the claimants must move the local district courts for enforcement.

2. I am not today making any order at all on the merits of the execution applications or the Chamber Summonses filed for specific reliefs in each. I have clubbed these three matters together because the respondents raised an identical objection in each. The matters are therefore tagged and clubbed together only for convenience, not because they share any commonality on facts. I will note the facts to the limited extent necessary.

3. In Global Asia Venture Company v. Arup Parimal Deb (Commercial Execution No. 58 of 2017 and associated applications), the arbitration agreement is dated 18th September 2007. The amended award is dated 16th February 2015. The agreement provides that the seat of the arbitration is in Mumbai. There is no express provision in the agreement about a jurisdictional Court.

4. In Matrix Partners India Investment Holdings v. Shailendra Bhadauria and Ors (Commercial Execution No. 2113 of 2018 and associated applications), there was an interim order under Section 17 of the Arbitration Act. The arbitration agreement in question said that the courts in Mumbai would have exclusive jurisdiction. Clause 17.3 said that the seat of arbitration was Mumbai and clause 17.4 said that enforcement would be in any court of appropriate jurisdiction. The Shareholders Agreement in question was dated 27th December 2012, and the interim order of 4th July 2018 required a deposit of Rs. 190 crores.

5. In Reliance Nippon Life Asset Management Ltd v. BV Satya Sai Prasad & Anr (Commercial Execution Application (L) No. 2195 of 2018 and associated applications), the seat of the arbitration was stated in the arbitration agreement to be in Mumbai. There was a consent award made in Mumbai, and the arbitration agreement specifically said that courts in Mumbai alone would have jurisdiction.

6. In each of these cases, as I have noted, the opposition is that the respondents and their assets are all outside Mumbai and, therefore, enforcement cannot be sought in this Court.

7. I have heard Mr. Jagtiani and Mr. Khandeparkar for the Applicants, and Mr. Pratap, Mr. Samdani and Ms Sinha for the Respondents in opposition.

8. Mr. Jagtiani begins with a consideration of the definition of Court under Section 2(1)(e)(i) of the Arbitration and Conciliation Act 1996 ("Arbitration Act"). It is true that this clause was substituted by the 2015 amendment, but, for our purposes, the relevant portion remains unchanged. This is how 'Court' is defined in that clause:

"2. In the Arbitration and Conciliation Act, 1996 (26 of 1996) (hereinafter referred to as the principal Act), in section 2, -

(1) in sub-section (1) -

(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 do

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2019 Supreme(Bom) 704

The main legal principle established in the judgment is that the enforcement of arbitral awards transcends territorial barriers and can be filed wherever in the country a decree can be executed.

Cases Referred (4)