Back
2024 Supreme(Online)(KAR) 39880
HIGH COURT OF KARNATAKA
MR. JUSTICE S.G. PANDIT, MR. JUSTICE C.M. POONACHA, JJ
THE MUNICIPAL COMMISSIONER – Appellant
Versus
M/S SHYAMARAJU AND CO (INDIA) PVT LTD – Respondent
WP 7128 of 2024
The Arbitral Tribunal's determination of arbitrability is valid and should be challenged only post-award under Section 34 of the Arbitration and Conciliation Act, 1996.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 7(4) and 16 - Writ petitions challenging the Arbitral Tribunal's order regarding arbitrability of disputes - The Tribunal found the disputes arbitrable despite the absence of an arbitration clause in the original contract, relying on correspondence suggesting arbitration - The petitioner contended the absence of an arbitration clause and questioned the Tribunal's jurisdiction. (Paras 5, 10, 13, 20, 22)
(B) Jurisdiction of High Court - The High Court's jurisdiction under Articles 226/227 is limited, and interference is only warranted in cases of patent lack of inherent jurisdiction or extreme circumstances. (Paras 19, 20)
Facts of the case:
The petitioner, a City Municipal Council, entered into agreements for sewage system improvement, leading to disputes and subsequent arbitration proceedings initiated by the respondent. The Arbitral Tribunal ruled on the arbitrability of the disputes, which led to the present writ petitions.
Findings of Court:
The Arbitral Tribunal's order was upheld, confirming that the disputes are arbitrable as per the provisions of the Act.
Issues: The main issue was whether the order of the Arbitral Tribunal regarding the existence of an arbitrable dispute could be interfered with by the High Court.
Ratio Decidendi: The court ruled that the Arbitral Tribunal's determination on arbitrability was valid and must be challenged post-award under Section 34 of the Act, emphasizing that the High Court should exercise caution in intervening in arbitration matters.
Result: Writ Petitions dismissed.
ORDER
The present writ petitions are filed challenging the orders dated 3.2.2024 passed in AC Nos.154 and 155/2019 on the file of the Arbitral Tribunal of Sole Arbitrator (at Arbitration & Conciliation Centre, Bengaluru, Domestic and International),
2. The parties in both the petitions are same and hence, the present writ petitions are taken up together for consideration.
3. The relevant facts necessary for consideration of the present petitions are that the petitioner being the City Municipal Council, Hospet, entered into two agreements dated 29.9.2010 for carrying out improvement works in the sewage system in Hospet. Raising various disputes that arising from the said agreements, the respondent raised claims with the petitioner, which was responded to. The respondent preferred CMP Nos.134 and 135/2018 under Section 11(5) of the Arbitration and Conciliation Act, 1996 ,
4. Accordingly, the parties entered appearance before the Arbitral Tribunal. Both the parties addressed their arguments with regard to the existence of the arbitral dispute. The Arbitral Tribunal, vide orders dated 3.2.2024 held that the agreements between the parties are arbitrable within the provisions of the Act. Being aggrieved, the present petitions are filed.
5. Sri Prashanth Kumar D, learned counsel for the petitioner vehemently contends that in the contract between the parties, no arbitration clause existed and the said contract contemplated a different mechanism for resolution of the disputes that may arise between the parties. He further submits that the Arbitral Tribunal by noticing that in the termination notice issued by the respondent, an arbitration clause was stipulated and since there was no denial of the same, has construed/considered the said circumstance and held that the parties had agreed to resolve the dispute between them by taking recourse to arbitration. Hence, he contends that the said finding is erroneous and liable to be interfered with by this Court in the present petitions.
6. Sri M.Dhyan Chinnappa, learned Senior Counsel appearing for the respondent at the outset would contend that the present writ petitions are not maintainable and the orders dated 3.2.2024 passed by the Arbitral Tribunal is required to be construed as one under Section 16 of the Act and having regard to the specific stipulation under Section 16 (5) of the Act, the plea with regard to jurisdiction also is required to be agitated by the petitioner in the event the petitioner challenges the final award of the Arbitral Tribunal. Hence, he seeks for dismissal of the writ petitions.
7. Sri Prashanth Kumar, learned counsel for the petitioner responding to the contention raised on behalf of the respondent, with regard to the maintainability of the writ petitions, contends that the jurisdiction of this Court under Articles 226/227 of the Constitution of India can be exercised in certain situations and the present circumstance is one such situation, where this Court is required to exercise its extraordinary jurisdiction contained under Article 226/227 of the Constitution of India.
8. Both the learned counsel have referred to various judgments, which shall b
