Back
IN THE HIGH COURT OF CALCUTTA
SANJIB BANERJEE, ABHIJIT GANGOPADHYAY, JJ.
Debdas Routh And Another - Appellants
Versus
Hinduja Leyland Finance Limited And Another - Respondents
APO No. 26 of 2018, GA No. 252 of 2018 In AP No. 145 of 2017, With APO No. 27 of 2018, GA No. 253 of 2018 In AP No. 180 of 2017, With APO No. 39 of 2018, GA No. 371 of 2018 In AP No. 181 of 2017, With APO No. 42 of 2018, GA No. 373 of 2018 In AP No. 182 of 2017, With APO No. 37 of 2018, GA No. 370 of 2018 In AP No. 535 of 2017, With APO No. 38 of 2018, GA No. 369 of 2018 In AP No. 330 of 2017
Decided On : 11-09-2018
The ratio decidendi in Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited is contrary to the express finding in Balco and is per incuriam. The dictum in Indus Mobile is flawed since such aspect of the matter was not taken into consideration and passed sub silentio. The perceived dictum in Indus Mobile is inapplicable to domestic arbitration. The extent of party autonomy is limited and the choice of court is governed by Section 2(1)(e)(i) of the Arbitration and Conciliation Act, 1996 read with Section 42 thereof and, subject to the parameters under such provisions being adhered to, it is governed by any agreement between the parties.
Fact of the Case:
The appellants and respondents entered into arbitration agreements containing clauses selecting the seat of arbitration and the forum of choice. Disputes arose between the parties and the respondents claimed that a large sum was due and owing from the appellants to the respondents. The arbitration clause contained in the agreement was invoked by the respondents and an arbitrator was appointed by the respondents. The appellants objected to the appointment and called upon the respondents to withdraw its notice. Two petitions were then filed by the respondents before the Delhi High Court, one under Section 9 of the said Act and the other under Section 11 thereof. Both the petitions were disposed of by the judgment and order impugned before the Supreme Court.
Finding of the Court:
The court held that the ratio decidendi in Indus Mobile is contrary to the express finding in Balco and is per incuriam. The dictum in Indus Mobile is flawed since such aspect of the matter was not taken into consideration and passed sub silentio. The perceived dictum in Indus Mobile is inapplicable to domestic arbitration. The extent of party autonomy is limited and the choice of court is governed by Section 2(1)(e)(i) of the Arbitration and Conciliation Act, 1996 read with Section 42 thereof and, subject to the parameters under such provisions being adhered to, it is governed by any agreement between the parties.
Issues: Whether the ratio decidendi in Indus Mobile is applicable to domestic arbitration.
Ratio Decidendi: The ratio decidendi of the court is that the ratio decidendi in Indus Mobile is contrary to the express finding in Balco and is per incuriam. The dictum in Indus Mobile is flawed since such aspect of the matter was not taken into consideration and passed sub silentio. The perceived dictum in Indus Mobile is inapplicable to domestic arbitration. The extent of party autonomy is limited and the choice of court is governed by Section 2(1)(e)(i) of the Arbitration and Conciliation Act, 1996 read with Section 42 thereof and, subject to the parameters under such provisions being adhered to, it is governed by any agreement between the parties.
Final Decision: The court dismissed the appeals filed by the appellants and allowed the appeal filed by the respondents. The court set aside the order impugned in APO 37 of 2018 and rejected the connected petition under Section 9 of the 1996 Act, AP 535 of 2017, by revoking the leave granted under Clause 12 of the Letters Patent, with liberty to the finance company to carry it to the appropriate court. The court also dismissed APO 26 of 2018, APO 27 of 2018, APO 39 of 2018 and APO 42 of 2018 and passed no order on APO 38 of 2018 since the disputes pertaining to such matter had been resolved.
SANJIB BANERJEE, J.
The extent of the applicability of the dictum in a recent Supreme Court judgment falls for consideration here. The appellants insist that the interpretation rendered in the relevant judgment as to the territorial jurisdiction of a court receiving a matter under the Arbitration and Conciliation Act, 1996 is absolute and not open to question; the respondents assert that the ratio decidendi in the judgment reported at (2017) 7 SCC 678 (Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited) is contrary to the statute and contrary to the very Constitution Bench judgment that it relies on to propound the rule.
2. These appeals arise out of a common judgment and order dated December 15, 2017 rendered by the Arbitration Court, where the dictum in Indus Mobile was found to be inapplicable.
3. The matter involves the interpretation of Section 2(1)(e) of the said Act and how such provision has been seen in Indus Mobile. Section 2(1)(e) of the said Act, prior to the 2015 Amendment, and post-2015 Amendment Section 2(1)(e)(i) are materially similar :
“2. Definitions. – (1) In this Part, unless the context otherwise requires,
(a)…
(b)…
(c)…
(d)…
(e) "Court" means 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 does not-include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;”
“2. Definitions. –(1) In this Part, unless the context otherwise requires, -
(a) …
(b) …
(c) …
(d) …
(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 does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, 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, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;”
4. Section 2(1)(e)(i) [which is in pari materia with pre-2015 Amendment Section 2(1)(e)] of the said Act indicates the court or courts to which a matter under Part-I of the said Act may be carried in the case of an arbitration other than international commercial arbitration. All petitions and applications made to a court under Part-I of the said Act, in the case of an arbitration other than international commercial arbitration, save, for obvious reasons, those under Sections 8 and 11 of the Act, may be carried only to a court answering to that description under Section 2(1)(e)(i) of the Act to receive the same. The essence of Section 2(1)(e)(i) is that if, instead of an arbitral reference, the disputes between the parties had to be carried by way of a plaint as in a civil suit, the court or courts which would be authorised to receive such civil suit would also be the court or courts which would be empowered to receive a petition or application under Part-I of the Act, except for the matters covered by Section 8 and 11 thereof. (Under Section 8 of the Act the application has, per force, to be made to the judicial authority in seisin of the lis which is perceived to be covered by an arbitration agreement; and, under Section 11 of the Act, the request is made to a Chief Justice or his designate.) There is a further qualification which is postulated by Se
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
