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2017 Supreme(P&H) 948

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ANIL KSHETARPAL, J.
Lakshmi Precision Screws limited - Petitioner
Versus
M/s Bharat Industries - Respondent
Civil Revision No.6940 of 2017 (O&M)
Decided On : 02-11-2017

Advocates Appeared:
For the Petitioner:Mr. Chetan Mittal, Sr. Advocate, with Mr. Vivek Singla, Advocate and Mr. Ramesh Kadian, Advocate

The absence of an agreement conferring exclusive territorial jurisdiction does not exclusively confer jurisdiction on the place where arbitration proceedings were held, and the enforcement/execution of the decree is governed by the provisions of the Code of Civil Procedure, 1908.

Headnote:

Arbitration - Territorial Jurisdiction - Arbitration and Conciliation Act, 1996, Code of Civil Procedure - Section 36 of the Arbitration and Conciliation Act, 1996

Fact of the Case:

The judgment concerns the execution of an award of the Arbitrator, equivalent to a decree, and the issues of territorial jurisdiction and the applicability of the Code of Civil Procedure for enforcement.

Finding of the Court:

The Court held that the place where the arbitration proceedings were held cannot exclusively confer territorial jurisdiction on the Courts at that place in the absence of an agreement between the parties. The enforcement/execution of the decree shall be governed by the provisions of the Code of Civil Procedure, 1908.

Issues: The issues involved were (i) whether the execution of a decree can only be filed at the place where arbitration proceedings took place without an agreement conferring exclusive territorial jurisdiction, and (ii) whether the provisions of Section 36 of the Arbitration and Conciliation Act, 1996, for enforcement/execution, would be governed by the provisions of the Code of Civil Procedure.

Ratio Decidendi: The Court interpreted the provisions of the Arbitration and Conciliation Act, 1996 and the Code of Civil Procedure to determine territorial jurisdiction and the enforcement/execution of the decree. It emphasized the absence of an agreement conferring exclusive territorial jurisdiction and the applicability of the Code of Civil Procedure for enforcement.

Final Decision: All the revision petitions were dismissed by the Court.

JUDGMENT :

ANIL KSHETARPAL, J.

1. This judgment shall dispose of Civil Revision Nos.6940, 6941, 6942, 6943, 6945 and 7091 of 2017, as common issue is involved.

2. In this case, judgment debtor is trying to avoid/delay the execution of the award of the Arbitrator, which is equivalent to a decree, by taking hyper technical objections.

3. In the considered opinion of this Court, two issues arise in the present cases.

(i) Whether execution of a decree (award of the Arbitrator) can only be filed at a place where arbitration proceedings took place, even in the absence of any agreement conferring exclusive territorial jurisdiction of a Court of a particular place or not?

(ii)Whether as the provisions of Section 36 of the Arbitration and Conciliation Act, 1996, for the purpose of enforcement/execution, provisions of the Code of Civil Procedure would apply or not?

4. It is not in dispute before this Court that the awards passed by the learned Arbitrator have become final between the parties as no objections under Section 34 of the Arbitration and Conciliation Act, 1996 have been filed.

5. There was no arbitration agreement between the parties. Arbitration took place in accordance with the provisions of Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as 'the MSMED Act). Section 18 is extracted as under:-

“18.Reference to Micro and Small Enterprises Facilitation Council.—

(1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council.

(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996(26 of 1996)shall apply to such a dispute as if the conciliation was initiated under Part III of that Act.

(3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section(1) of section 7 of that Act.

(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.

(5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference.”

6. The respondent filed application before the Chairman, Haryana Micro, Small and Medium Enterprises Facilitation Council, Chandigarh, for getting the recovery from the petitioner-company. Initially, council made efforts to bring the parties to some settlement through conciliation as per Section 18(2) of the MSMED Act, however, on failure of the conciliation proceedings, the dispute in all the cases were referred to the Arbitrator in accordance with Section 18(3) of the MSMED Act. Learned Arbitrator held proceedings at Gurgaon.

7. Both the parties i.e., petitioner and the respondent are carrying on their business at Rohtak. It is further not in dispute that in most of the cases, petitioner herein, had filed applications under Section 9 of the Arbitration and C



























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