2017 Supreme(Cal) 504
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
JYOTIRMAY BHATTACHARYA, SAHIDULLAH MUNSHI, JJ.
MECHON SERVICES – Appellant
Versus
PREDOMINANT ENGINEERS & CONTRACTORS (P) LIMITED – Respondent
GA 2438 of 2016, APOT 285 of 2016, EC 407 of 2016
Decided On : 04-12-2017
Important Points
Subject
Arbitration Law - Enforcement of Arbitral Awards
Act Referred
CIVIL PROCEDURE CODE : S.16, S.17, S.18, S.19, S.20, S.21, S.38, S.39
Headnote
Arbitration and Conciliation Act, 1996 - Execution of Award - Section 36, Section 37, Section 34, Section 38, Section 39 - The judgment discusses the enforcement of an arbitral award under the Arbitration and Conciliation Act, 1996. It emphasizes the importance of the seat of arbitration in determining the jurisdiction for regulating arbitral proceedings. The court clarifies that the seat of the arbitral tribunal dictates the court where the award can be enforced. It also addresses the execution of the award and the transfer of the decree for execution to another court under certain circumstances.
Fact of the Case:
The appeal is against an order refusing to entertain the execution case for lack of jurisdiction of the Court. The question is the competent court to execute the award passed by the Arbitral Tribunal under the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The Original Side of the High Court is the competent court to enforce the award with reference to the seat of the arbitral tribunal. The court holds that the execution will lie before this Court, subject to certain observations.
Issues: Competency of the Court to execute the arbitral award, jurisdiction based on the seat of arbitration, and availability of assets within the jurisdiction of the Court.
Ratio Decidendi: The seat of arbitration determines the exclusive jurisdiction for regulating arbitral proceedings. The court cannot conclusively decide lack of jurisdiction without examining the judgment debtor to ascertain the availability of assets within the jurisdiction.
Final Decision: The impugned order is set aside, and the execution will lie before the Original Side of the High Court, subject to certain observations.
For the Appellant : Mr. Jishnu Chowdhury, Mr. Jayanta Sengupta, Mr. Sagnik Basu, Adv.
For the Respondent: Mr.Supratim Laha, Mr. Balaji Chakaraborty, Adv.
1. This appeal is directed against an order dated 27th July, 2016 passed by a learned Single Judge of this Court refusing to entertain the execution case for lack of jurisdiction of this Court.
2. The learned Single Judge held that the execution case has been unnecessarily carried to this Court without anything in the affidavit in support of the tabular statement justifying the matter being filed in this Court.
3. In this appeal a question has cropped up as to the Court which is competent to execute the award passed by the Arbitral Tribunal under the Arbitration and Conciliation Act, 1996.
4. Section 36 of the Arbitration and Conciliation Act, 1996 provides for enforcement of the award. The said provision makes it clear that where the time for making an application to set aside the arbitral award under Section 34 has expired, then subject to the provisions of sub-Section 2 such award will be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court. The confusion, which was there earlier, with regard to the selection of the forum for regulating arbitral proceeding arising out of the agreement between the parties, has now been dispelled by the Hon’ble Supreme Court in the case of Indus Mobile Distribution Pvt. Ltd. vs. Datawind Innovations (P) Ltd. and Ors., reported in [2017] 7 SCC 678, wherein it was held that seat of the arbitration is the determining factor for identifying the Court where the arbitral proceeding will be regulated. Paragraph 19 of the said judgment is quoted herein below:
“A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suit filed in courts, a reference to “seat” is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of the CPC be attracted. In arbitration law however, as has been held above, the moment “seat” is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties.”
5. Here, the parties have chosen for resolution of their disputes through arbitration by the agreed arbitrator, namely, West Bengal State Micro and Small Enterprises Facilitation Council having its seat at New Secretariat Buildings (9th Floor), 1, Kiran Shankar Roy Road, Kolkata – 700 001. If the seat of arbitral tribunal is taken into consideration, then any order passed by such arbitrator is appealable under Section 37 of the Arbitration and Conciliation Act, 1996 before the Original Side of this Court; even an application for setting aside the award under Section 34 of the said Act will lie before the Original Side of this Court. As such, we have no hesitation to hold that the Original Side of this High Court is the Court where such award can be enforced with reference to the seat of the arbitral tribunal which is within the jurisdiction of the Original Side of this Court.
6. Section 38 of the Code of Civil Procedure provides for that a decree may be executed either by the court, which passed it, or by the court to which it is sent for execution.
7. Section 39 of the Code of Civil Procedure provides for transfer of the decree for execution to the other court under certain circumstances.
8. Thus, when an execution of an award is levied in the Court within whose territorial jurisdiction the seat of arbitral tribunal situates, the