High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN
Gammon India Ltd., Mumbai
Versus
Sankaranarayana Construction (Bangalore) Pvt. Ltd. rep. by its General Manager
C.R.P.(PD)(MD) No.414 of 2008 & M.P.(MD) Nos.1 & 2 of 2008
Decided on : 11-09-2008
Arbitration - Jurisdiction - Arbitration and Conciliation Act, 1996, Section 42
Fact of the Case:
Disputes arose between the parties regarding a subcontract work for the construction of a dam. The petitioner filed an Application seeking an interim order of injunction, which was initially granted but later vacated. The respondent filed an Application under Section 11 of the Act, and an Arbitrator was appointed. The Arbitrator passed an interim award, which the petitioner sought to set aside.
Finding of the Court:
The Court found that the Court at Chennai did not have jurisdiction to entertain the Application under Section 9, as no part of the cause of action arose within its jurisdiction. However, the Court noted that the question of jurisdiction was not raised at the appropriate time and that the Division Bench closed the Application without considering the jurisdiction issue. The Court held that the Principal District Court, Tirunelveli could not adjudicate upon the question of jurisdiction and therefore dismissed the Civil Revision Petition.
Issues: Jurisdiction of the Court at Chennai to entertain the Application under Section 9, compliance with the provisions of Order 39, Rule 3(a), and the effect of subsequent events on the jurisdiction issue.
Ratio Decidendi: The Court emphasized that Section 42 of the Arbitration and Conciliation Act, 1996 places an embargo upon any other Court entertaining any petition with respect to an arbitration agreement. The Court also noted that the question of jurisdiction was not raised at the appropriate time and that the Principal District Court, Tirunelveli could not adjudicate upon the question of jurisdiction.
Final Decision: The Civil Revision Petition was dismissed, and two weeks' time was granted to the petitioner to take return of the papers in the Original Petition from the Principal District Court, Tirunelveli and re-present it before the Original Side of the Court at Chennai. Both parties were directed to maintain status quo for a period of four weeks to enable the petitioner to represent the papers before the Court at Chennai and move the Court for appropriate interim orders.
This Civil Revision Petition arises out of an order passed by the Principal District Judge, Tirunelveli directing the return of the Original Petition challenging an interim Arbitration Award, for presentation to the appropriate Court in terms of Section 42 of Arbitration and Conciliation Act, 1996.
2. Heard Mr. P.S. Sundaram, learned counsel for the petitioner and Mr. T.A. Srinivasan, learned counsel for the respondent.
3. The petitioner and the respondent entered into an agreement to carry out some subcontract work in respect of construction of Adivinainar Koil Masonry Dam across Tamiraparani River Basin at Mekarai Village, Shenkottai Taluk, Tirunelveli District. Disputes arose between the petitioner and the respondent in the Revision Petition filed on Application in O.A.No.7 of 2003, under Section 9 seeking an interim order of injunction restraining the petitioner herein from invoking bank guarantee. That Application was filed on the Original Side of this Court at Chennai. Initially, an interim order of injunction was granted, but the same was vacated on an Application filed by the petitioner herein in A.No.1255 of 2003.
4. Thereafter, the respondent herein filed O.P.No.538 of 2003, under Section 11 of the Act and the Honble Chief Justice passed an order dated 14. 2005, appointing an Arbitrator.
5. The Arbitrator entered reference and passed an interim award dated 112. 2006, directing the petitioner herein to deposit a sum of Rs.56,63,990/- pending the main proceedings. As against the said interim award, the petitioner herein filed O.P.No.51 of 2007 on the file of the Principal District Judge, Tirunelveli under Section 34 to set it aside.
6. In the said Arbitration O.P.No.51 of 2007, the respondent filed an Application in I.A.No.53 of 2007, for appropriate orders under Section 42. This Application was allowed by the Principal District Court, Tirunelveli by the order under Revision dated 29. 2007.
.7. Section 42 of the Arbitration and Conciliation Act, 1996 reads as follows:
."42. Jurisdiction. – Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any Application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent Applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court".
8. There is no dispute about the fact that an Application under Section 9 and an Application under Section 11 of the Act were filed before the Principal Bench of this Court, at Chennai. However, in view of the decision of the Apex Court in Rodeman India Ltd. v. International Trade Expo Centre, AIR 2006 SC 3456 : (2006) 11 SCC 651 : (2006) 4 MLJ 318, the Chief Justice acting under Section 11 of the Act, is not a Court within the meaning of Section 2(1)(e) of the Act. Therefore, the fact that the Arbitrator was appointed by the Chief Justice in O.P.No.538 of 2003, at Chennai may not be a deciding factor insofar as Section 42 is concerned.
.9. However, insofar as the Application under Section 9 is concerned, Mr. P.S. Sundaram, learned counsel for the petitioner contended that the Original Side of this Court at Madras had no jurisdiction to entertain the Section 9 Application, as no part of the cause of action arose within the jurisdiction of the Court at Chennai. The petitioner herein is in Mumbai, the respondent herein has his office in Bangalore and the site in which work had to be carried out is in Tenkasi, Tirunelveli District. Therefore, neither the parties to the litigation were at Chennai nor any part of the cause of action arose within the jurisdiction of the Courts at Chennai. In such circumstances, the learned counsel for the petitioner contended that the Court at Chennai did not have jurisdiction to entertain the Application under Section 9. Since, Section 2(1)(e) defines Court as one hav
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