IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P.NAVEEN RAO, SAMBASIVARAO NAIDU, JJ.
M/s. India Media Services Private Limited rep.by its Authorized representative Kaushuk Banerjee – Appellant
Versus
M/s.SBPL Infrastructure Limited – Respondent
Civil Revision Petition No.507 of 2021
Decided on : 09-06-2022
Civil Procedure Code, 1908 - Order XXI - Rule 11 (2) - Section 151 - Nomination Agreement – Disputes - Petitioner and respondent entered into a Nomination Agreement. Disputes arose between parties with respect to Nomination Agreement and petitioner issued letter dated invoking the arbitration clause in Nomination agreement - On an application filed by petitioner, under Section 11 of Arbitration and Conciliation Act, 1996 (for short, ‘the Act’), Calcutta High Court initially appointed Justice Jayanta Kumar Biswas (Retired) as Arbitrator, who later recused himself - Whether the Civil Courts in Hyderabad lack jurisdiction to entertain the Execution Petition - Hon’ble Supreme Court held Section 9 applications and Section 34 are applications to set aside arbitral awards being applications made to a Court, are applications within the scope of Section 42 (Para 22.3).
Finding of the Court :
Taking note of provision in Section 42 and law laid down by Hon’ble Supreme Court in Associated Contractors, looking back to facts of case, it is seen that application under Section 9 has been filed before Calcutta High Court- It appears even Section 34 application is also filed fin Calcutta High Court - Elaborate submissions are made by learned senior counsel for petitioner and learned counsel for respondent on various other aspects – Court are not recording said submissions and no opinion is expressed, in as much as Court are convinced with submission made by learned senior counsel for petitioner on lack of jurisdiction to Court of IX ACJ, CCC, Hyderabad to entertain Execution Petition No.191 of 2021 and are left open to be urged in appropriate proceedings
Result: Civil Revision Petition is allowed.
ORDER:
P.Naveen Rao, J.
Heard M.S.Prasad learned senior counsel appearing for Smt. A.Satya Siri, learned counsel for the petitioner and Sri Venkat Prasad Ukkalam learned counsel for the respondent.
2. On 05.12.2005, petitioner and the respondent entered into a Nomination Agreement. Disputes arose between the parties with respect to the Nomination Agreement and petitioner issued letter dated 24.10.2011 invoking the arbitration clause in the Nomination agreement. On an application filed by the petitioner, under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’), Calcutta High Court initially appointed Justice Jayanta Kumar Biswas (Retired) as Arbitrator, who later recused himself.
3. After recusal by Justice Jayanta Kumar Biswas, respondent filed application A.P.No.435 of 2019 before the Calcutta High Court, wherein, he sought direction from the Calcutta High Court for appointment of an Arbitrator. On further application filed by the petitioner Justice Baskar Bhattacharya (Retired) was appointed as Arbitrator and he was directed to conclude the proceedings by the end of August 2020. Though, arbitration proceedings concluded on 9.8.2020, the award was actually passed on 27.10.2020. Challenging the award, petitioner filed petition under Section 34 of the Act before the Hon’ble Calcutta High Court.
4. Pending said application, respondent filed Execution Petition under Order XXI Rule 11 (2) and Section 151 of CPC on the file of the IX Additional Chief Judge, City Civil Court, Hyderabad (for short, IX ACJ, CCC, Hyderabad). The E.P. was allowed by order dated 8.3.2021. Challenging that without affording opportunity to the petitioner, the E.P. was allowed, this Revision is filed.
5. It is also clear that respondent had filed an Arbitration Application under Section 9 and it appears against orders in said application, appeal is pending before Calcutta High Court.
6. Shorn of details, suffice to note that award passed by the Arbitrator is subject matter of challenge in application filed under Section 34 in the Calcutta High Court. Section 9 applications have also been filed in the State of West Bengal. While so, on the ground that property is situated in Hyderabad city in State of Telangana, Execution Petition No.191 of 2021 was filed on the file of the IX ACJ, CCC, Hyderabad seeking enforcement of the award passed by the Arbitrator in State of West Bengal.
7. Extensive submissions are made by the learned senior counsel for petitioner and learned counsel for respondent.
8. According to learned senior counsel, IX ACJ, CCC, Hyderabad has no jurisdiction to entertain Execution Petition and therefore orders of IX ACJ, CCC, Hyderabad in E.P.No.191 of 2021 are ex facie illegal and void ab initio, as the error of jurisdiction goes to the root of the matter. According to learned senior counsel Section 42 of the Act makes it clear that the Principal District Court or the High Court where applications under Sections 9 and/or 34 are filed alone have the jurisdiction to deal with the subsequent applications after the conclusion of the arbitral proceedings and no other Court has jurisdiction to entertain such applications. Since Sections 9 and 34 applications are filed before State of West Bengal. In support of his contention, learned senior counsel placed reliance on decision of Supreme Court in State of West Bengal Vs Associated Contractors, (2015) 1 SCC 32.
9. Per contra, according to learned counsel appearing for respondent, once award is passed by the Arbitrator, that award can be enforced at any place in the country as a decree of civil Court and more particularly where the concerned property is located. Since, concerned property is located in the city of Hyderabad, the City Civil Court in Hyderabad has jurisdiction to entertain the execution petition and consider the Execution Petition filed under Section 36 of the Act. Therefore, the order of IX ACJ, CCC, Hyderabad, is not vitiated on the ground of jurisdiction.
10. The issu
State of West Bengal Vs Associated Contractors
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Hon’ble Supreme Court clarified that expression “with respect to an arbitration agreement’ applies to all applications made before or during arbitral proceedings or after award was passed.
The main legal point established in the judgment is that an application for the enforcement of an arbitral award must be filed in the court where the Section 9 or Section 34 application was previousl....
Execution of arbitral awards must occur in the court where the original arbitration application was filed, as per Section 42 of the Arbitration and Conciliation Act.
The enforcement of an arbitral award can be initiated anywhere in the country where the decree can be executed, without requiring a transfer of decree from the court with jurisdiction over the arbitr....
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 holde....
The seat of arbitration determines jurisdiction for enforcement of awards, allowing execution within that jurisdiction despite asset relocations, emphasizing the need for transparency in asset disclo....
The court held that under the Arbitration and Conciliation Act, only the court that entertained the initial arbitration application has jurisdiction to enforce the award, reinforcing exclusive enforc....
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