The Bombay High Court on Monday held that the place where the arbitration award is signed, the court exercising jurisdiction over such place would be the appropriate court for setting aside an arbitral award under section 34 of Arbitration and Conciliation Act, 1996.
The petitioners have challenged order passed by the Court of District Judge, Malkapur, whereby an application filed by them under section 34 of the Arbitration and Conciliation Act, 1996 was dismissed for want of jurisdiction.
Brief facts are that the petitioners and the respondent entered into a Partnership Deed on and clause 13 of the said Deed was the arbitration clause providing for resolution of disputes between the parties by way of arbitration. As disputes arose between the parties, the respondent filed an application under section 11 of the Arbitration and Conciliation Act 1996 before the High Court for appointment of an arbitrator. The said application was allowed and a former Judge of the High Court was appointed as an arbitrator to resolve the dispute between the parties. Pursuant to the said order passed by the High Court, the learned sole arbitrator initiated the proceedings. It was undisputed that the entire arbitration proceedings took place at Nagpur and that award was pronounced and signed by the learned arbitrator at Nagpur.
Aggrieved by the said award, the petitioners filed the said application under section 34 of the Act before the Court below at Malkapur. In the application, the respondent raised an objection of jurisdiction and filed an application at Exhibit-11 praying for rejection of the aforesaid application filed under section 34 of the said Act, as being untenable before the Court below at Malkapur and alternatively requested the Court below that the petitioners may be relegated to the proper Court in the interest of justice. This application was opposed by the petitioners. By the impugned order, the Court below allowed the application at Exhibit 11 and found that the Court below at Malkapur did not have jurisdiction to entertain the application under section 34 of the said Act, because the place/seat of arbitration was at Nagpur and the award was pronounced and signed by the learned arbitrator at Nagpur. Consequently, the application under section 34 of the said Act was dismissed for want of jurisdiction.
Aggrieved by the same, the petitioners filed the writ petition before the High Court of Bombay.
Counsel for the petitioners, said that the impugned order passed by the Court below was unsustainable, because it was not in consonance with the law laid down by the Hon’ble Supreme Court in various judgments concerning the concept of place/seat and venue of arbitration. It was contended that in the present case neither did the arbitration clause specify the place/seat of arbitration nor did this Court while allowing the application under section 11 of the said Act and appointing the arbitrator, specify the place or seat of arbitration.
The senior counsel invited attention of the High Court to section 20 of the said Act, which pertains to place of arbitration and by placing emphasis on sub-section (2) thereof, it was submitted that in the facts of the present case, the learned arbitrator was expected to determine the place of arbitration. In the absence of any such specific determination of place of arbitration by the learned arbitrator, according to the learned senior counsel, Nagpur could not be said to be the place or seat of arbitration, although the arbitration proceedings did take place at Nagpur and the award was pronounced and signed at Nagpur.
Acting upon the plea, the single judge bench of Justice Manish Pitale observed that, once the conclusion is arrived at, it becomes clear that when the place of arbitration was Nagpur, it operated as a clause of exclusive jurisdiction in Courts at Nagpur. As per the law laid down in the BALCO judgment by the Constitution Bench of Hon’ble Supreme Court, there can be only one Court having jurisdiction to annul an award. The contention raised on behalf of the petitioners in the context of section 42 of the said Act stands answered by the above quoted para-62 of the Soma JV judgment and, therefore, it cannot be said that since the petitioners had filed application under section 34 of the said Act before the Court at Malkapur and it was the first such application filed under Part-I of the said Act, only the Court at Malkapur would have jurisdiction.
The Court further observed that, once the place of arbitration is conclusively established as Nagpur, only the Courts at Nagpur would have jurisdiction to exercise supervisory powers and to entertain any application in respect of the arbitration proceeding.
Thus, the Bombay High Court while placing reliance on the decisions of Supreme Court passed in Bharat Aluminum Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552 & BGS SGS SOMA JV v. NHPC Ltd.(2019) SCC OnLine SC 1585, held that there can be only one Court having jurisdiction to annul an award.
-India Legal Bureau