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2021 Supreme(Online)(Ker) 59334
IN THE HIGH COURT OF KERALA AT ERNAKULAM
ANIL K. NARENDRAN, M.R.ANITHA, JJ
OOMMEN THOMAS PANICKER – Appellant
Versus
MONICA CONSTRUCTIONS – Respondent
F.A.O.NO.44 OF 2021
For the Appellants/Petitioners: S.A.RAZZAK
For the Respondents: P.B.KRISHNAN, SABU GEORGE
An order dismissing an application to refer parties to arbitration on jurisdictional grounds is not appealable; only refusals based on non-arbitrability are appealable under the Arbitration Act.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 8(1) - Commercial Courts Act, 2015 - Section 15 - Dispute over construction contract worth Rs. 85,80,203 - Application under Section 8 seeking arbitration reference dismissed as not maintainable, leading to appeal on grounds of jurisdiction - Court held such dismissal not appealable as it does not refuse arbitration based on non-arbitrability. (Paras 16, 21, 22)
(B) Jurisdictional Issues - The court must determine whether orders are appealable under specific sections of the Arbitration and Conciliation Act - Parameters set forth in numerous Supreme Court cases establish that a dismissal not rooted in a finding of non-arbitrability cannot be appealed. (Paras 21, 23)
Facts of the case:
The appellant sought to refer a construction contract dispute to arbitration but was met with a dismissal based on maintainability under the Commercial Courts Act, prompting the appeal to determine the nature of jurisdiction.
Findings of Court:
The court concluded the appeal was not maintainable as the lower court's order did not deny the existence of an arbitration agreement but addressed jurisdictional issues instead, thus shifting the case to the Commercial Court.
Issues: Main issues revolved around the appealability of orders under the Arbitration Act and the implications of jurisdictional dismissal.
Ratio Decidendi: The court found that an order dismissed on jurisdictional grounds does not equate to a refusal to refer parties to arbitration, and only such refusals under specific provisions of the Arbitration Act are appealable.
Result: Appeal dismissed as not maintainable.
| Table of Content |
|---|
| 1. contractual dispute over construction costs (Para 1) |
| 2. judgment on maintainability of appeal (Para 2 , 16) |
| 3. arguments on appealability of orders (Para 3 , 4) |
| 4. analysis of arbitration and conciliation act provisions (Para 5 , 6) |
| 5. jurisdiction of commercial courts and appeal processes (Para 7 , 8 , 9) |
| 6. limitations of judicial intervention in arbitration (Para 10 , 11 , 12) |
| 7. non-arbitratibility of disputes and conclusion from supreme court precedents (Para 19 , 20 , 21) |
| 8. implications of transferring cases to the commercial court (Para 22 , 23 , 24) |
JUDGMENT
Anil K. Narendran, J.
The appellant is the 1st defendant in O.S.No.202 of 2018 on the file of the First Additional Subordinate Judge's Court, Thiruvananthapuram, a suit filed by the 1st respondent-plaintiff against the appellant and the 2nd respondent to realise a sum of Rs.85,80,203/- towards balance cost on works undertaken by the 1st defendant in a construction contract. The plaintiff has also sought for a declaration that termination of the said contract by the 1st defendant is illegal. In O.S.No.202 of 2018, the 1st defendant filed I.A.No.2 of 2020, an application under Section 8 (1) of the Arbitration and Conciliation Act, 1996 , to refer the parties to arbitration. The plaintiff filed objections. After considering the rival contentions, the court below, by the order dated 01.03.2021, dismissed that application as not maintainable, on the ground that, since the amount sought to be recovered is in excess of Rs.85,00,000/-, in the dispute arising out of a construction and infrastructure contract, O.S.No.202 of 2018 is liable to be transferred to the Commercial Court, Thiruvananthapuram, in view of the provisions under Section 15 of the Commercial Courts Act, 2015 . Challenging the said order, the appellant has filed this appeal before this Court, under Section 104(1) of the Code of Civil Procedure, 1908 and Section 37 (1) of the .
2. Initially, Registry has not numbered this appeal raising certain doubts as to its maintainability. On 08.07.2021, when the unnumbered appeal came up for consideration, after hearing preliminary arguments of the learned counsel for the appellant, we found that the question of maintainability of the appeal requires detailed consideration with notice to the respondents. Therefore, Registry was directed to number the appeal, subject to the condition that the question of maintainability will be decided with notice to the respondents. Thereafter, on the same day, this Court issued urgent notice by speed post to the respondents, along with a copy of the order dated 08.07.2021, returnable within ten days.
3. Heard the learned counsel for the appellant- 1stdefendant and also the learned counsel for the 1st respondent-plaintiff on the question of maintainability of this appeal. The 2nd defendant in O.S.No.202 of 2018, who is arrayed as the 2nd respondent herein, is the Arbitrator as per the contract.
4. On the question of maintainability of this appeal, the learned counsel for the appellant-1st defendant contended that, the impugned order of the court below, dismissing an application filed under Section 8 (1) of the Arbitration and Conciliation Act, as not maintainable, is appealable under Section 104(1) of the Code of Civil Procedure and Section 37 (1) (a) of the Arbitration and Conciliation Act. Per contra, the learned counsel for the 1st respondent-plaintiff contended that, the impugned order of the court below dismissing an application filed under (1) of the Arbitration and Conciliation Act as not maintainable, in view of the provisions under Section 15 of the Commercial Courts Act, is not an order of the court below refusing to refer parties to arbitration under (1) of the Arbitration and Conciliation Act, which alone is appealable under (1)(a) of the said Act. In view of the prohibition contained in (1) of the Arbitration and Conciliation Act, such an order is not appealable.
5. As already noticed, O.S.No.202 of 2018 is
