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IN THE HIGH COURT OF ALLAHABAD
SHEKHAR B. SARAF, J.
M/s. Devi Dayal Trust And Others – Petitioner
Versus
M/s. Rajhans Towers Pvt. Ltd. – Respondent
Matters Under Article 227 No. 2199 Of 2023
Decided On : 17-05-2024
JURISDICTION - ARBITRATION - Section 34, Section 42 of the Arbitration and Conciliation Act, 1996 - The court discussed the jurisdictional exclusivity established by Section 42 of the Arbitration and Conciliation Act, 1996, which mandates that once an application under Part I of the Act is made in a court, that court alone has jurisdiction over all subsequent applications arising from the arbitration agreement. The court interpreted the term 'seat' versus 'venue' in arbitration agreements, emphasizing that the designation of a venue does not automatically confer jurisdiction unless explicitly stated. The court's decision was influenced by the principle of estoppel, preventing parties from contradicting their prior submissions regarding jurisdiction.
Fact of the Case:
The petitioner challenged the order of the Commercial Court, Gautam Buddh Nagar, which held it lacked territorial jurisdiction to adjudicate the application under Section 34 of the Arbitration and Conciliation Act, 1996, after the petitioner had previously filed an application under Section 9 of the Act in the same court. The respondent argued that the venue of arbitration was designated as Delhi, thus conferring exclusive jurisdiction to the courts there.
Finding of the Court:
The court found that the Commercial Court at Gautam Buddh Nagar had failed to exercise its jurisdiction correctly. It emphasized that the application under Section 34 must be heard in the same court where the initial application under Section 9 was filed, in accordance with Section 42 of the Act. The court also noted that the designation of a venue does not equate to the designation of a seat unless explicitly stated in the agreement.
Issues: The primary issues were whether the Commercial Court at Gautam Buddh Nagar had jurisdiction to hear the Section 34 application and whether the designation of Delhi as the venue constituted the seat of arbitration.
Ratio Decidendi: The court held that Section 42 of the Arbitration and Conciliation Act, 1996, provides that once an application is made in a court regarding an arbitration agreement, that court has exclusive jurisdiction over all subsequent applications. The court also clarified that the designation of a venue does not automatically confer jurisdiction unless explicitly stated as the seat of arbitration.
Final Decision: The court set aside the order of the Commercial Court, Gautam Buddh Nagar, and directed it to adjudicate the application under Section 34 of the Act expeditiously, within six months.
JUDGMENT :
(Shekhar B. Saraf, J.) :
1. This is a writ petition under Article 227 of the Constitution of India wherein the petitioner is aggrieved by the order dated March 15, 2022 passed by the Commercial Court, Gautam Buddh Nagar by which the Commercial Court held that it lacks the territorial jurisdiction to adjudicate the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) by the petitioner. The Commercial Court, Gautam Buddh Nagar accordingly, returned the said application with liberty granted to the petitioner to file the said application before the appropriate territorial court.
2. The facts of the instant case are delineated below:
(b) As disputes and differences arose between the parties, the respondent filed an application under Section 9 of the Act before the Commercial Court, Gautam Buddh Nagar on March 20, 2007.
(c) Subsequently, the petitioners filed an application under Section 11 of the Act before the High Court of Delhi. The High Court of Delhi passed an order on September 11, 2007 appointing the sole arbitrator to decide the dispute between the parties. Subsequently, the arbitrator passed an award on July 3, 2017.
(d) Challenging the said award, the petitioners filed an application under Section 34 of the Act before the Commercial Court, Gautam Buddh Nagar which was dismissed for want of territorial jurisdiction vide order dated March 15, 2022. Hence, the instant petition has been filed challenging the said order.
CONTENTIONS OF THE PETITIONERS
3. Counsel appearing for the petitioners has made the following submissions:
(ii) Furthermore, the filing of the application under Section 11 of the Act before the Delhi High Court, as the venue was fixed in Delhi would not make it the seat of arbitration. Reliance is placed upon the judgments rendered in SBP & Co. v. Patel Engineer Ltd. reported in (2005) 8 SCC 618; State of Jharkhand v. Hindustan Constructions reported in (2018) 2 SCC 602; State of West Bengal v. Associated Contractor reported in (2015) 1 SCC 32; Manjusha Premi and Others v. Prakash Gupta and Others reported in (2016) 6 All LJ 695 and Lafarge India Private Limited v. Kishore Kumar Sahoo reported in AIR 2017 Cal 116.
(iii) Since the application under Section 9 of the Act was made before the Commercial Court, Gautam Budh Nagar, all the subsequent applications under Part-I of the Act will have to be made before the same Court.
(iv) Bar placed by Section 42 of the Act does not apply to an application under Section 11 of the Act and, therefore, despite the fact that the Section 11 application was filed before the Delhi High Court, the same would not confer jurisdiction upon the Delhi High Court to hear other applications under the Part-I of the Act.
(v) Relying upon the judgment of the Supreme Court in M/s Ravi Ranjan Developers Pvt. Ltd. case (supra), it is submitted that the doctrine of estoppel would apply upon the respondent as they have themselves filed the application under Section 9 of the Act befo
The principle of jurisdictional exclusivity under Section 42 of the Arbitration and Conciliation Act, 1996, mandates that all applications related to an arbitration agreement must be filed in the sam....
Section 42 of the Arbitration and Conciliation Act, 1996 applies to all applications made before or during the arbitral proceedings or after an Award is pronounced under Part I of the Arbitration Act....
The designated seat of arbitration establishes exclusive jurisdiction for related applications, affirming that the Commercial Court in Ranchi has jurisdiction over Section 34 applications.
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....
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