IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Deepak Kumar Tiwari, J.
M/s. N.T.P.C. Ltd., P.O. Ujwalnagar, District Bilaspur (C.G.) - Petitioner
Versus
M/s. P.M.A. Constructions Co., Nagpur, Maharashtra - Respondent
W.P.(227) No.533 of 2022
Decided On : 18-11-2022
Arbitration and Conciliation Act, 1996 - Section 34, 2(e), 37, (1), 8, 9 - Commercial Courts Act, 2015 - Section 13(1A) – Code of Civil Procedure, 1908 - Order XLIII Rule(1)(a), Rule 10, (1) of Order VII - Arbitration - Challenging Order - Petition has been filed challenging order whereby, application preferred by Petitioner against award passed by Arbitrator has been dismissed by holding that Commercial Court is not vested with territorial jurisdiction to consider Petition – Held, It is vivid that as no order has been passed under Section 34 of Act of 1996 either setting aside or refusing to set aside an arbitral award therefore, objection raised by Respondent is not acceptable that an Appeal shall lie under Section 37 of Act of 1996, therefore, it is held that against impugned order, Writ Petition (227) is maintainable - Indisputably, subject matter of arbitration lies in jurisdiction of Chhattisgarh and contract has also been executed within territory of Chhattisgarh - Hence, this Court is of considered view that learned Commercial Court has misconstrued about seat of jurisdiction as same is clearly situated at Chhattisgarh and application is liable to be entertained before Commercial Court - For foregoing reasons, order impugned is quashed and it is directed that Commercial Court, shall decide application filed under Section 34 of Act of 1996 in accordance with law - Petition disposed of.
ORDER :
1. With the consent of learned Counsel for the parties, the matter is heard finally.
2. This Petition has been filed challenging the order dated 07.07.2021 passed by the Commercial Court (District Level), Raipur in MJC No.20/2020 whereby, the application preferred by the Petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) against the award dated 16.09.2020 passed by the Arbitrator Mr. Amrendra Prasad Choudhary, Ex. CMD, RINL at Delhi, has been dismissed by holding that the Commercial Court is not vested with the territorial jurisdiction to consider the Petition filed by the Petitioner and accordingly returned the original Petition to the Petitioner for instituting the same before the Court having jurisdiction.
3. Shri Majumdar, learned Counsel for the Petitioner submits that it is not disputed that the contract has been signed at Bilaspur and as per clause-2.0 of the condition of the contract, the work is to be executed in the area required by NTPC-Sipat, District Bilaspur and the earnest money has also been accepted which was payable at Bilaspur, therefore, as per Section 2(e) of the Act of 1996, the subject matter of the arbitration is in the area of Chhattisgarh. He further submits that the seat of arbitration between the parties is clearly at Bilaspur as all the contracts have been executed in the said area as per the contract agreement, therefore, the Commercial Court, Nava Raipur, Chhattisgarh clearly has jurisdiction for hearing the application filed under Section 34 of the Act of 1996. He placed reliance on the order passed by this Court in the matter of South Eastern Coalfields Limited Vs. M/s Sri Balaji Metals & Minerals in W.P.(227) No.393/2021 and other connected matters dated 17.11.2021.
4. On the other hand, Shri Singh submits that against the order passed under Section 34 of the Act of 1996, the remedy lies only under Section 37 of the said Act and the Writ Petition is not maintainable.
5. In reply, Shri Majumdar submits that such question has come up for consideration before the Hon’ble Supreme Court in the matter of BGS SGS Soma JV vs. NHPC Limited reported in (2020) 4 SCC 234 and the relevant paragraphs i.e. 14, 16 & 20 are as under:-
“1. Appeal from orders.- An appeal shall lie from the following orders under the provisions of Section 104, namely-
(a) an order under Rule 10 of Order VII returning a plaint to be presented to the proper Court except where the procedure specified in rule 10A of Order VII has been followed;”
This provision is conspicuous by its absence in Section 37 of the Arbitration Act, 1996, which alone can be looked at for the purpose of filing appeals against orders setting aside, or refusing to set aside awards under Section 34. Also, what is missed by the impugned judgment is the words “under Section 34”. Thus, the refusal to set aside an arbitral award must be under Section 34, i.e., after the grounds set out in Section 34 have been applied to the arbitral award in question, and after the Court has turned down such grounds. Admittedly, on the facts of these cases, there was no adjudication under Section 34 of the Arbitration Act, 1996 - all that was done was that the Special Commercial Court at Gurugram allowed an application filed under Section 151 read with Order VII Rule 10 CPC, determining that the Special Commercial Court at Gurugram had no jurisdiction to proceed further with the Section 34 application, and therefore, such application would have to be returned to the competent court situate at New Delhi.”
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“16. Shri Chowdhury also referred to another Delhi High Court judgment reported as Hamanprit Singh Sidhu v. Arcadia Shares & Stock Brokers ( P ) Ltd .,( 2016) 234 DLT 30, in which a learned Single Judge of the Delhi High Court allowed an application for
BGS SGS Soma JV vs. NHPC Limited
Hamanprit Singh Sidhu v. Arcadia Shares & Stock Brokers (P) Ltd.
It is well settled that where more than one court has jurisdiction, it is open for parties to exclude all other courts.
The designated seat of arbitration establishes exclusive jurisdiction for related applications, affirming that the Commercial Court in Ranchi has jurisdiction over Section 34 applications.
Venue of arbitration does not equate to its jurisdictional seat; petitions under the Arbitration Act must be filed where arbitration took place, as established in prior Supreme Court rulings.
The seat of arbitration is the place where the arbitration proceedings are held and not the place where the cause of action arose. The courts at the seat of arbitration have exclusive jurisdiction to....
The jurisdiction for arbitration-related applications is governed by the parties' contractual agreement, and courts at the designated location have exclusive jurisdiction, regardless of where the arb....
The Court emphasized the importance of pecuniary jurisdiction, the designation of the proper Court as per the arbitration clause, and the non-exclusivity of jurisdiction under the 1996 Act.
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