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IN THE HIGH COURT AT CALCUTTA
BISWANATH SOMADDER & SANKAR ACHARYYA, JJ.
Lafarge India Private Limited - Appellant
Versus
Kishore Kumar Sahoo - Respondent
FMA 30 of 2015 (FMAT 1011 of 2014) (Assigned)
Decided On : 10-01-2017
ARBITRATION - JURISDICTION - SECTION 34 APPLICATION - MAINTAINABILITY - COURT'S JURISDICTION TO HEAR SECTION 34 APPLICATION - APPLICATION FILED BEFORE COURT PRIOR TO APPLICATION FILED BEFORE DISTRICT JUDGE - MAINTAINABILITY OF PRIOR APPLICATION - SECTION 42 OF ARBITRATION AND CONCILIATION ACT, 1996 - APPLICABILITY.
Fact of the Case:
The appellant filed an application under section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award. The respondent challenged the maintainability of the application, arguing that the Court lacked jurisdiction due to the bar under section 42 of the Act. The respondent contended that the Orissa High Court had jurisdiction to entertain the application under section 34 and that no other courts, including the Court of the learned Additional District Judge at Alipore, had jurisdiction.
Finding of the Court:
The Court held that the application under section 34 of the Arbitration and Conciliation Act, 1996, filed by the appellant was maintainable before the learned Court below. The Court observed that applications under section 11 are not to be moved before the “Court” as defined under clause (e) of sub-section (1) of section 2 of the Arbitration and Conciliation Act, 1996, but before the Chief Justice of either the High Court or the Supreme Court, as the case may be or their delegates. As a necessary corollary, section 42 would not apply in respect of applications made before the Chief Justice or his delegate for the simple reason that the Chief Justice or his delegate is not a “Court” as defined under section 2(1)(e) of the Arbitration and Conciliation Act, 1996.
Issues: 1. Whether the application under section 34 of the Arbitration and Conciliation Act, 1996 was maintainable before the learned Court below? 2. Whether the Court had jurisdiction to hear the section 34 application in light of the bar under section 42 of the Act?
Ratio Decidendi: The Court relied on the Supreme Court's decision in State of West Bengal & Ors. vs. Associated Contractors, wherein it was held that Section 42 of the Arbitration Act, 1996 applies to applications made under Part I of the Act only if they are made to a “court” as defined under Section 2(1)(e). Since applications under Section 11 are made to the Chief Justice or his designate, who are not “courts” as defined, such applications would be outside the ambit of Section 42.
Final Decision: The Court allowed the appeal, set aside the impugned judgment and order of the learned Additional District Judge at Alipore, South 24-Parganas, and directed the learned Court below to proceed to dispose of the application under section 34 of the Arbitration and Conciliation Act, 1996 filed by the appellant herein on its merit, as expeditiously as possible.
Biswanath Somadder, J.
1. The instant appeal arises out of a judgment and order dated 5th August, 2014, passed by the learned Additional District Judge, 7th Court at Alipore, District – South 24-Parganas, dismissing an application under section 34 of the Arbitration and Conciliation Act, 1996, being Misc. Case No. 39 of 2012, taken out by Lafarge India Private Limited – the appellant herein – on the ground that the said application was not maintainable before it.
2. The genesis of the matter is that certain disputes and differences arose between the appellant and one Kishore Sahoo, who is a Commission Agent, during the course of their business transactions which gave rise to issuance of a notice dated 11th April, 2006, by Kishore Sahoo to the appellant requesting for appointment of a Sole Arbitrator to adjudicate certain disputes pertaining to an agreement dated 12th February, 2001. On 22nd May, 2006, Kishore Sahoo filed an application under section 11(6) before the Orissa High Court and by an order dated 9th March, 2007, a former Judge of the said High Court was appointed as the Sole Arbitrator. In the meanwhile, the appellant herein had filed an application before the Calcutta High Court on 17th August, 2006, under section 11 of the Arbitration and Conciliation Act, 1996. After the order was passed by the Orissa High Court on 9th March, 2007, in the section 11 application filed before it, an application was taken out by the appellant before the said Court on 7th September, 2007, seeking recall of the order dated 9th March, 2007, whereby a former Judge of the Orissa High Court was appointed as Arbitrator. That application was dismissed which resulted in filing of a SLP before the Hon’ble Supreme Court of India by the appellant herein. The following order was passed by the Supreme Court on 25th March, 2009 :-
“Leave granted. Without examining the various points urged, we feel interest of justice would be best served by appointing an arbitrator different from the one appointed by the High Court by the impugned order. It shall not be construed that we have expressed any opinion about competence of the concerned retired Judge who was appointed. But considering the nature of the controversy, it would be appropriate to appoint some other arbitrator. The parties have agreed that Shri H.L. Agarwal, retired Chief Justice of Orissa High Court be appointed as the arbitrator. The terms of the arbitration, fees, etc. shall be fixed by Justice Agarwal. The appeal is accordingly disposed of.”
3. Subsequently, the arbitration proceedings took place and finally an award was passed by the learned Arbitrator on 12th December, 2011. The appellant herein preferred an application under section 34 of the Arbitration and Conciliation Act, 1996 challenging the award dated 12th December, 2011. The said application, registered as Misc. Case No. 39 of 2012, was filed on 3rd March, 2012, which was dismissed by the judgment and order dated 5th August, 2014, giving rise to the present appeal.
4. It appears that the learned Court below while hearing out the section 34 application also took into consideration a petition filed by the respondent herein challenging the maintainability of the section 34 application on the ground that the Court had no jurisdiction to hear the setting aside application in view of the bar provided under section 42 of the Arbitration and Conciliation Act, 1996.
5. According to the respondent, in view of the judgment of the Orissa High Court having been upheld by the Hon’ble Supreme Court of India, the competent Court in Orissa had the jurisdiction to entertain the application under section 34 of the Arbitration and Conciliation Act, 1996 and no other Courts, including the Court of the learned Additional District Judge at Alipore, had jurisdiction to entertain the application under section 34 of the Arbitration and Conciliation Act, 1996. The respondent, as it appears, further contended before the learned Court below that the app
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