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IN THE HIGH COURT OF MADHYA PRADESH
Subodh Abhyankar, J.
Parenteral Drugs (India) Limited v. Gati Kintetsu
Express Pvt. Ltd.
Arbitration Appeal No. 16 of 2022 (Indore): against the
order dated 2.3.2022 passed by the Judge of Commercial Court (District Judge Class), Indore in MJCAV No. 175/2019;
Decided on 12.4.2022
(1) Arbitration and Conciliation Act, 1996 -- Ss. 16 and 34 -- territorial jurisdiction of arbitral tribunal -- appellant chose not to appear before Arbitrator -- objection regarding jurisdiction of Arbitrator taken for first time in proceedings u/s. 34 -- plea that arbitral tribunal does not have jurisdiction shall be raised not later than submission of statement of defence -- even if appellant company was of opinion that it had no arbitration agreement with respondent, it ought to have joined proceedings of Arbitrator and challenged same as provided u/s. 16 -- no other recourse available to challenge award. [Paras 9 to 11
(2) Arbitration and Conciliation Act, 1996 -- Ss. 16 and 34 -- territorial jurisdiction of arbitral tribunal -- Cl. 19 of alleged arbitration agreement clearly provides that jurisdiction of Court would be at Hyderabad/Secunderabad of State of Andhra Pradesh, and no other Court shall have jurisdiction -- in such circumstances, when award was passed by Arbitrator at Hyderabad, it cannot be challenged u/s. 34 at Indore. (2020) 5 SCC 462 and BGS (2020) 4 SCC 234 followed. (2006) 13 SCC 567, (1969) 1 SCC 765, (2011) 1 SCC 320, (2003) 5 SCC 531, (2017) 7 SCC 678 and (1969) 2 SCC 434 referred to. [Paras 11 & 14
(3) Arbitration and Conciliation Act, 1996 -- S. 34 -- territorial jurisdiction of arbitral tribunal -- lacking -- effect and limitation -- District Court concluded that it has no territorial jurisdiction to decide case u/s. 34 -- ought not to have decided matter on merits -- impugned award cannot be sustained so far as dismissal on merits is concerned -- however, since application u/s. 34 was filed within prescribed limitation, appellant cannot be rendered remediless -- directed that if appellant submits appropriate application u/s. 34 before Court of competent jurisdiction within such period of time as was still available, same shall be decided without going into question of limitation -- time spent in prosecuting proceedings u/ss. 34 and 37 shall stand excluded from period of limitation. [Para 15
¼1½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 16 rFkk 34 && ekè;LFke~ vf/kdj.k dh {ks=h; vf/kdkfjrk && vihykFkhZ us e/;LFk ds le{k milatkr ugha gksuk pquk && e/;LFk dh vf/kdkfjrk ds ckjs esa vkifÙk izFke ckj /kkjk 34 ds v/khu dk;Zokgh esa dh && ;g vfHkokd~ fd ek/;LFke~ vf/kdj.k dks vfèkdkfjrk ugha gS] izfrj{kk ds dFku dh izLrqfr ds i'pkr~ ugha fd;k tk,xk
&& Hkys gh vihykFkhZ daiuh dh ;g jk; Fkh fd mldk izR;FkhZ ds lkFk dksbZ ekè;LFke~ djkj ugha Fkk] mls e/;LFk dh dk;Zokgh esa mifLFkr gksdj /kkjk 16 ds v/khu micaf/kr fd, x, vuqlkj ml ij vkifÙk djuk pkfg, Fkh && iapkV ij vk{ksi djus ds fy, vU; dksbZ fodYi miyC/k ughaA ¼iSjk 9 ls 11
¼2½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 16 rFkk 34 && ekèLFke~ vf/kdj.k dh {ks=h; vf/kdkfjrk && vfHkdfFkr ek/;LFke~ djkj ds [kaM 19 esa Li"Vr% micaf/kr fd U;k;ky; dh vf/kdkfjrk vka/kzizns'k jkT; ds gSnjkckn@fldanjkckn dh gksxh] vU; fdlh U;k;ky; dks vf/kdkfjrk ugha gksxh && bu ifjfLFkfr;ksa esa] tc e/;LFk }kjk iapkV gSnjkckn esa ikfjr fd;k x;k Fkk rks mls /kkjk 34 ds v/khu bankSj esa vk{ksfir ugha fd;k tk ldrkA ¼2020½5 ,l lh lh 462 rFkk ¼2020½4 ,l lh lh 234 vuqlfjrA ¼2006½13 ,l lh lh 567] ¼1969½1 ,l lh lh 765] ¼2011½11 ,l lh lh 320] ¼2003½ 5 ,l lh lh 531] ¼2017½7 ,l lh lh 678 rFkk ¼1969½2 ,l lh lh 434 fufnZ"VA ¼iSjk 11 ,oa 14
¼1½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 34 && ek/;LFke~ vfèkdj.k dh {ks=h; vf/kdkfjrk && vHkko && izHko rFkk ifjlhek && ftyk U;k;ky; dk fu"d"kZ fd mls /kkjk 34 ds v/khu izdj.k fofuf'pr djus dh {ks=h; vf/kdkfjrk ugha && izdj.k dk fofu'p; xq.kkxq.k ij ugha djuk pkfg, && vfk{kIr iapkV] tgk¡ rd xq.kkxq.k ij [kkfjt dk laca/k gS] fLFkj ugha j[kk tk ldrk && rFkkfi] /kkjk 34 ds v/khu vkosnu fofgr ifjlhek ds Hkhrj izLrqr fd;k x;k Fkk blfy, vihykFkhZ dks fu:ik; ugha NksM+k tk ldrk && funsf'kr fd ;fn vihykFkhZ ,slh vof/k ds Hkhrj tks 'ks"k Fkh] l{ke vf/kdkfjrk okys U;k;ky; ds le{k /kkjk 34 ds v/khu leqfpr vkosnu djrk gS rks mldk fofu'p; ifjlhek ds iz'u ij fopkj fd, fcuk fd;k tk, && /kkjk 34 rFkk 37 ds v/khu dk;Zokfg;ksa esa O;rhr le; ifjlhek dh vof/k ls vioftZr jgsxkA ¼iSjk 15
ORDER
1. Heard on the question of admission. On the last date of hearing Shri Atre, learned counsel for the appellant was asked to address this Court only on the question of jurisdiction of Indore District Judge to entertain the application u/s.34 of the Act of 1996 in respect of the award passed by the Arbitrator sitting at Hydrabad.
2. This arbitration appeal has been preferred under section 37 of the Arbitration and Conciliation Act, 1996 (hereafter referred to as “the Act of 1996”) against the order dated 2.3.2022 passed by the learned Judge of the Commercial Court (District Judge Class), Indore (M.P.) under section 34 of the Act of 1996 in MJCAV No.175/2019 wherein the award dated 17.5.2014, passed by the Sole Arbitrator Shri M. Chelapati Rao of Hyderabad was challenged.
3. The aforesaid challenge under section 34 was opposed by the respondent on two counts; firstly that the Court at Indore had no jurisdiction to entertain the appeal under section 37 of the Act of 1996, and secondly, there was a valid agreement between the parties and no error has been committed by the Arbitrator to pass the award.
4. Shri Vijyesh Atre, learned counsel for the appellant has submitted that there was no agreement between the appellant Parenteral Drugs (India) Limited and the respondent M/s Gati Kintetsu Express Pvt. Ltd. and the Arbitrator has wrongly assumed the jurisdiction to decide the dispute on the basis of an agreement between the appellant and the other similarly named company by the name of M/s Gati Limited whereas the present respondent claim is M/s Gati Kintetsu Express Pvt. Ltd.
5. Counsel has further submitted that both these companies are two different entities and the respondent company cannot claim initiation of arbitration on the basis of an agreement entered into between the appellant and the other company M/s Gati Limited. It is submitted that the Court at Indore would have the jurisdiction to decide the application under section 34 of the Act as the part of cause of action has arisen at Indore only. It is further submitted that if the Court was of the opinion that it had no territorial jurisdiction over the matter, it ought not to have proceeded on the merits of the case.
6. It is further submitted by Shri Atre that the appellant has rightly invoked the jurisdiction of Indore Court and the award is liable to be set aside only on the ground that there was no arbitration agreement between the parties which is a valid ground of challenge as provided under section 34(2)(a)(ii) of the Act of 1996. Counsel has submitted that the transaction between the appellant company and the respondent took place at Indore, hence the part of cause of action has arisen at Indore only and the Court at Indore would have the jurisdiction to decide the same. It is further submitted that the appellant company has its office at Navlakha Indore and was availing the service of M/s Gati Limited for transporting its finished products from its factory premises to different locations in India. In support of his submissions, Shri Atre has also relied upon paragraph 8 of the judgement of the Hon’ble Supreme Court in the cas e of Sandeep Kumar and others v. Master Ritesh and others reported as (2006) 13 SCC 567 and in the case of Heavy Engineering Mazdoor Union v. State of Bihar and others reported as 1969(1) SCC 765, in the case of S.N. Prasad, Hitek Industries (Bihar) Ltd. v. Monnet Finance Ltd. and others reported as (2011) 1 SCC 320, in the case of Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and another reported as (2003) 5 SCC 531, in the case of Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd. and others reported as (2017) 7 SCC 678 and in the case of M.C. Chacko v. The State Bank of Travancore, Trivandrum reported as 1969 (2) SCC 434.
7. Heard learned counsel for the appellant and perused the record.
8. From the record, it is found that so far as the arbitration agreement is concerned, indeed it is between the appellant and
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 seat of arbitration clause, fixing the seat of arbitration at New Delhi, resulted in courts at New Delhi being exclusively competent to entertain petitions under the 1996 Act, in exercise of its ....
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....
The seat of arbitration is the place where the arbitration proceedings are held and not the place where the cause of action arose. The courts at the seat of arbitration have exclusive jurisdiction to....
The distinction between 'seat' and 'venue' of arbitration is crucial, with the seat determining jurisdiction, which in this case was Ahmedabad despite the venue being New Delhi.
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