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2023 Supreme(All) 1368

IN THE HIGH COURT OF ALLAHABAD
PANKAJ BHATIA, J.
Bharat Petroleum Corporation Ltd. - Petitioner
Versus
Anoop Kumar Modi - Respondent
Matters Under Article 227 Nos. 2703, 2704 of 2023
Decided On : 18-10-2023

Advocates Appeared:
For the Petitioner: S.M. Singh Royekwar.
For the Respondent: Girish Chandra Sinha

The main legal point established is that the Commercial Court has jurisdiction to entertain execution proceedings arising from an award under the Arbitration and Conciliation Act, and the award holder has the choice to file executions at any place of their choice.

Headnote:

Arbitration - Jurisdiction - Commercial Court Act, 2015 - Section 10(3) - Section 36 of the Arbitration and Conciliation Act, 1996 - Kerala High Court judgment - Supreme Court judgments - Execution proceedings arising out of an award passed under the Arbitration and Conciliation Act, 1996 - Territorial jurisdiction of Commercial Court at Lucknow - Interpretation of Section 10(3) of the Commercial Court Act - Choice of award holder to file executions at any place of their choice

Fact of the Case:

The petitioner challenged the orders dismissing objections to execution applications filed by the respondent. The dispute arose from an agreement with an Arbitration Clause, resulting in an award in favor of the respondent. The petitioner objected to the execution applications on grounds of lack of jurisdiction and territorial jurisdiction of the Commercial Court at Lucknow.

Finding of the Court:

The Court rejected the petitioner's objections, holding that the Commercial Court at Lucknow had jurisdiction to entertain the execution proceedings and territorial jurisdiction to hear the execution application. The Court emphasized the choice of the award holder to file executions at any place of their choice.

Issues: (i) Whether the Commercial Court under The Commercial Courts Act, 2015 can hear and decide the execution proceedings arising out of an award passed under the Arbitration and Conciliation Act, 1996? (ii) Whether the Commercial Court at Lucknow had the territorial jurisdiction to hear the execution application?

Ratio Decidendi: The Court interpreted Section 10(3) of the Commercial Court Act, emphasizing that the phrase 'all applications' or 'appeals' arising out of such arbitration under the provisions of the 1996 Act includes the application for execution under Section 36 of the Arbitration and Conciliation Act. The Court also highlighted the choice of the award holder to file executions at any place of their choice.

Final Decision: The Court dismissed the petitioner's applications, upholding the orders passed by the Commercial Court at Lucknow rejecting the objections filed by the petitioner.

JUDGMENT :

1. Heard Shri S.M. Singh Royekwar, learned counsel for the petitioner and Shri Girish Chandra Sinha, learned counsel for the respondent.

2. Both the applications under Article 227 being common in nature are being decided by means of this common judgment.

3. The present applications have been filed challenging the orders dated 24.04.2023 passed by Presiding Officer, Commercial Court No.2, Lucknow whereby the objection filed by the petitioner resisting the executions filed by the respondent came to be dismissed.

4. The facts in brief are that in between the petitioner and the respondent there was an agreement providing for an Arbitration Clause and on account of a dispute arising out of the said agreement, an Arbitral Tribunal was constituted. The Abitrator passed an award in favour of the respondent herein vide award order dated 04.04.2020. In the said award, the Arbitrator issued two directions to the respondents; firstly directing for reinstatement of the dealership and secondly awarding Rs.50,000/- as costs per month from the date of termination i.e. 20.06.2017 till the actual date of restoration of the dealership. The respondent, purporting to enforce the said award filed two applications for execution before the Commercial Court at Lucknow being Execution Case No.185 of 2022 and Execution Case No.498 of 2022. The said execution applications were objected by the petitioner by filing an application mainly on two grounds; firstly that the Commercial Court at Lucknow lacks inherent jurisdiction to entertain the execution application; and secondly on the ground that the court at Lucknow lacked territorial jurisdiction also. Both the said pleas were negated by two separate impugned orders which has led to challenge of the said order by means of present applications.

5. The admitted facts are that dispute before the Abitrator was pertaining to termination of an agreement through which the respondent was running a petroleum outlet at Bahraich. The award in question was delivered by the Arbitral Tribunal at Lucknow and the execution application was filed at Lucknow.

6. The contention of the counsel for the petitioner in brief is that after the Abitrator delivers the award, in terms of the mandate of the Section 32 of the Arbitration and Conciliation Act, 1996, all the abritral proceedings stand terminated. He further argues that Section 10(3) of the Commercial Courts' Act confers the jurisdiction on the Commercial Court in respect of "all applications or appeals arising out of the arbitration" under the provision of Arbitration and Conciliation Act, which after the termination of the arbitration by virtue of Section 32 would not include the execution proceedings as deliberately the word 'Application arising out of arbitration' has been used under Section 10(3) of the Commercial Courts Act and thus the Commercial Courts at Lucknow lacked inherent jurisdiction to entertain the execution proceedings and have erred in rejecting the objections filed by the petitioner to that extent. In respect of his argument that the Commercial Court at Lucknow lacked territorial jurisdiction, he argues that the retail outlet of the respondent was situated at Bahraich, although the award was delivered at Lucknow, it is only the retail sales office of the petitioner-corporation situated at Gonda which can restore the dealership of the respondent in terms of the award and thus, no execution petition could have been filed at Lucknow.

7. The counsel for the petitioner places reliance on the judgment of the Kerala High Court in case of Beta Exim Logistics (P) Ltd. Versus Central Railside Warehouse Co., Ltd. reported in 2023 SCC Online Ker 1392 as well as the judgment of the Supreme Court in the case of Sundaram Finance Limited Versus Abdul Samad and another reported in (2018) 3 SCC 622 as also the judgement of the Supreme Court in the case of State of West Bengal Versus Associated Contractors, (2015) 1 SCC 32.

8. The counsel for the respondent, on the ot

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