Case Note & Summary
The petitioner, United Spirits Limited, filed an application under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs pending enforcement of a consent award made by the sole arbitrator, Hon'ble Mr Justice S. P. Bharucha, former Chief Justice of India. The award directed respondent nos. 1 and 3 to pay the petitioner approximately Rs. 8,80,00,000. The petitioner sought attachment of amounts payable by respondent no. 2 to respondent no. 1, disclosure of assets, and appointment of a Court Receiver. The background involves an agreement dated 1 July 2005 between the petitioner and respondent no. 1 for tie-up manufacture of IMFL products, containing an arbitration clause. Disputes arose, and the petitioner filed Arbitration Petition No. 307 of 2006 under Section 9, which was disposed of by consent on 28 June 2006, referring disputes to sole arbitration. The consent award was passed. The only objection raised by the respondents was that the Bombay High Court lacked territorial jurisdiction to entertain the earlier petition, rendering the order and consent award a nullity. The court rejected this contention, noting that no objection was raised earlier and the respondents consented to the reference. The court granted interim reliefs pending enforcement of the consent award.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Territorial Jurisdiction - The court considered whether it had territorial jurisdiction to entertain a petition under Section 9 when the arbitration agreement and cause of action arose outside its jurisdiction. The court held that the respondent, having consented to the reference and participated in the proceedings without objection, is estopped from challenging jurisdiction at the enforcement stage. (Paras 2-3) B) Arbitration - Consent Award - Nullity - The court examined whether a consent award passed by a sole arbitrator is a nullity if the court that referred the matter lacked territorial jurisdiction. The court held that the award is not a nullity as the parties consented to the reference and the award, and the objection to jurisdiction was not raised earlier. (Paras 2-3)
Issue of Consideration
Whether the Bombay High Court had territorial jurisdiction to entertain the earlier arbitration petition and whether the consent award passed pursuant to that petition is a nullity.
Final Decision
The court rejected the respondents' objection regarding territorial jurisdiction and granted interim reliefs pending enforcement of the consent award.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Territorial jurisdiction
- Consent award
- Estoppel by conduct
- Nullity of award
