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2018 Supreme(P&H) 3596

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Surya Kant, Sudip Ahluwalia, JJ.
Nhpc Ltd - Appellant
Versus
Jaiparkash Associates Ltd. And Others - Respondent
First Appeal From Order (Carb) No. 13 of 2018, 14 of 2018, 15 of 2018; First Appeal From Order (Com) No. 1 of 2018, 2 of 2018, 4 of 2018
Decided On : 12-09-2018

Advocates Appeared:
Aman Arora, Adv., Puneet Bali, Adv., Gaurav Chopra, Adv., Paramveer Singh, Adv., Arunabh Chowdhary, Adv., Vaibhav Tomar, Adv., Manju Goyal, Adv., Sumeet Goel, Adv., Manav Bajaj, Adv., Amitesh Mishra, Adv., Niteen Sinha, Adv., Alankar Narula, Adv.

The Court clarified that in a case where more than one place has been agreed upon for Arbitration and the Arbitration and Conciliation Act, 1996 applies in all those places, neither party can be debarred from approaching the Court of its choice where the proceedings have terminated after pronouncement of the arbitral Award, and supervisory control of the Court under whose jurisdiction the proceedings were held has not been invoked at any earlier stage.

Headnote:

The Appellant-Corporation awarded Contracts to the Respondents for Projects in North-Eastern States. Disputes arose, and Arbitration was invoked in New Delhi. The final Award was challenged under Section 34 in Faridabad. The Court held it had no jurisdiction, directing return of the objections. The Appellant contended that Faridabad was the appropriate 'Seat of Arbitration' as per the original Agreement. The issues were (I) maintainability of the Appeal under Section 37, and (II) the finding of the Court below on the jurisdiction to entertain the dispute. The Court held that the Act overrides the Code of Civil Procedure, and the impugned order was appealable. The Court also determined that the refusal to entertain the objections, if the Court was actually possessed of territorial jurisdiction, would amount to an incorrect 'refusal to set aside' a disputed award under Section 34. The Court concluded that the objections should be entertained by the Commercial Court for Faridabad at Gurugram.

JUDGMENT

Sudip Ahluwalia, J. - A common question for determination has arisen in all these Appeals arising out of similar orders passed by the Special Commercial Court at Gurugram, whereby the separate Applications Under Section 34 of the Arbitration and Conciliation Act, 1996 (for short "the Act") filed on behalf of the Appellant were ordered to be returned in view of the objections/contentions raised on behalf of Respondents challenging the territorial jurisdiction of the said Court to entertain those applications.

2. For the sake of convenience and brevity, the factual background is being extracted from FAO-COM No.1 of 2018. The Appellant-Corporation had awarded Contracts in favour of the respective Sets of Respondents for completion of certain Projects to be accomplished in some of the NorthEastern States of the Country. However, the disputes arose between the parties on account of which, the Arbitration was invoked in pursuance of the relevant Clause No.67 of the Agreement, in which it was stipulated as follows -

    ".....Arbitration proceedings shall be held at New Delhi/Faridabad, India and the language of the Arbitration proceedings and that of all documents and communications between the parties shall be English."

    3. The parties nominated their respective Arbitrators, who in turn jointly appointed the Presiding Arbitrator to arbitrate upon the disputes. The final Award after completion of the Arbitration Proceedings was passed on 3.5.2013, after which the Appellant filed its Objections against the same Under Section 34 of the Act before the Civil Court at Faridabad. Those objection petitions were later on transferred to the Special Commercial Court, Gurugram on it being constituted under the Commercial Courts (Commercial Division and Commercial Appellate Division of High Courts) Act, 2015. It was resisted on behalf of the Respondent by way of filing of an application U/S 2 (1) (e) (i) of the Act challenging jurisdiction of the Civil/Commercial Court, Haryana to entertain the objections, which after hearing was allowed by the said Court, by holding that it had no territorial jurisdiction to entertain the proceedings, and therefore, directed return of the objections to the Appellant in following the provisions of Order VII Rules 10/11 of the Code of Civil Procedure for being presented to the Court of Competent Jurisdiction at Delhi.

    4. The Appellant's side is aggrieved that the Ld. Court below misconstrued its own jurisdiction and thereby wrongly refused to entertain its objections Under Section 34 of the Act. It is the Appellant's contention that the said Civil/Commercial Court is possessed of Territorial jurisdiction to entertain any proceedings in the District of Faridabad, which according to the Appellant was meant to be the appropriate 'Seat of Arbitration' in terms of the original Agreement between the parties in view of Clause No.67, reproduced in Para 2 earlier. The appeal has nevertheless been contested on behalf of the Respondents with a two-fold contention, firstly that the Appeal itself is not maintainable in view of the Statutory Bar Under Section 37 of the Act, and secondly, that actually only the competent Court in New Delhi is possessed of jurisdiction to entertain the objections Under Section 34, which has also been determined by the Special Commercial Court, Gurugram, and so there is no illegality or impropriety in its impugned Order.

    5. The questions which have therefore, arisen before us are -

      (I)Whether the present Appeal itself is maintainable in view of the bar under Section 37 of the Act, as urged by the Respondents ?,

        (II)If so, whether the finding of the Ld. Court below that in the given facts and circumstances, only the competent Court in Delhi would have jurisdiction to entertain the dispute, is correct or not ?

          Our observations Re: Question (I) -

          6. The submission regarding non-maintainability of the instant Appeal(s) has been stressed on behalf of the Respondents by way of referring to Sections

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