Case Note & Summary
The petitioners, Navin Makhija and others, filed an Arbitration Petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures against the respondents, Tulsi Bhimjiyani and another. The dispute arose from a term sheet dated 3 October 2010 executed in Mumbai for the joint development of a property in Thane. The petitioners had paid substantial sums to the respondents. An arbitral tribunal was constituted, and the petitioners sought to withdraw the petition, but the respondents raised a preliminary objection regarding the territorial jurisdiction of the Bombay High Court. The court framed the issue of jurisdiction and heard arguments. The respondents contended that the property was in Thane, the respondents resided in Thane, and the cause of action arose in Thane, so only the Thane court had jurisdiction. The petitioners argued that the term sheet was executed in Mumbai and payments were made there, conferring jurisdiction. The court analyzed the facts and held that the subject matter of the arbitration was the property in Thane, and the respondents were based in Thane. The mere execution of the agreement in Mumbai did not give the Bombay High Court jurisdiction under Section 9. The court dismissed the petition for lack of territorial jurisdiction, allowing the petitioners to withdraw the Chamber Summons for amendment.
Headnote
A) Arbitration - Territorial Jurisdiction - Section 9, Arbitration and Conciliation Act, 1996 - Cause of Action - The court held that for a petition under Section 9, the court must have jurisdiction over the subject matter of the arbitration or the parties. Since the property was in Thane and the respondents resided in Thane, the cause of action arose in Thane, not Mumbai. The mere execution of the term sheet in Mumbai did not confer jurisdiction on the Bombay High Court. (Paras 3-13)
B) Arbitration - Interim Measures - Section 9, Arbitration and Conciliation Act, 1996 - Withdrawal of Petition - The petitioners sought to withdraw the petition after the arbitral tribunal was constituted. The court allowed the withdrawal but dismissed the petition on merits due to lack of jurisdiction, as the respondents opposed the withdrawal without addressing the jurisdiction issue. (Paras 2, 14)
Issue of Consideration
Whether the Bombay High Court has territorial jurisdiction to entertain a petition under Section 9 of the Arbitration and Conciliation Act, 1996 when the property in dispute is situated in Thane and the arbitration agreement was executed in Mumbai.
Final Decision
The court dismissed the Arbitration Petition No. 560 of 2012 for lack of territorial jurisdiction. The Chamber Summons (1215 of 2012) for amendment was also dismissed as infructuous. No order as to costs.
Law Points
- Territorial jurisdiction under Section 9 of the Arbitration and Conciliation Act
- 1996 is determined by the place where the cause of action arises
- not merely where the agreement is executed
- Section 20 of the Code of Civil Procedure
- 1908 applies
- the court must have jurisdiction over the subject matter of the arbitration or the parties.
Case Details
2012 LawText (BOM) (10) 81
Arbitration Petition No. 560 of 2012
Mr.S.U.Kamdar, Senior Advocate a/w. Mr.Chirag Balsara, Mr.P.K.Shroff, Mr.D.V.Deokar, Mr.V.P.Shroff, Ms.Jaylaxmi Gaud, Ms.Rashmi Jha, i/b. P.K.Shroff & Co. for the Petitioners; Mr.Nitin Thakkar, Senior Advocate, a/w. Ms.Snehal Shah, Mr.Ritesh Jain, Ms.Anita J.Tatani, i/b. M/s.Purnanand & Co. for the Respondents.
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Nature of Litigation
Petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim measures in relation to an arbitration dispute over a property development agreement.
Remedy Sought
Petitioners sought interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, and later sought to withdraw the petition after the arbitral tribunal was constituted.
Filing Reason
Dispute arose from a term sheet for joint development of property in Thane; petitioners paid sums to respondents but alleged breach; they invoked arbitration and filed Section 9 petition for interim relief.
Previous Decisions
Arbitral tribunal was constituted; petitioners made a statement before the tribunal that the Section 9 petition would be withdrawn.
Issues
Whether the Bombay High Court has territorial jurisdiction to entertain a petition under Section 9 of the Arbitration and Conciliation Act, 1996 when the property is in Thane and the agreement was executed in Mumbai.
Submissions/Arguments
Respondents argued that the court lacks territorial jurisdiction because the property is in Thane, respondents reside in Thane, and the cause of action arose in Thane; mere execution of term sheet in Mumbai does not confer jurisdiction.
Petitioners argued that the term sheet was executed in Mumbai and payments were made in Mumbai, thus the Bombay High Court has jurisdiction.
Ratio Decidendi
For a petition under Section 9 of the Arbitration and Conciliation Act, 1996, the court must have territorial jurisdiction over the subject matter of the arbitration or the parties. The cause of action arises where the property is situated and where the respondents reside, not merely where the agreement is executed. Since the property was in Thane and respondents resided in Thane, the Bombay High Court lacked jurisdiction.
Judgment Excerpts
This court has no territorial jurisdiction to entertain, try and dispose of this petition and consequently this court has no jurisdiction to entertain the Chamber Summons filed by the petitioners.
The subject matter of the arbitration is the property situated at Thane. The respondents are residing at Thane. The cause of action has arisen at Thane.
Procedural History
Petitioners filed Arbitration Petition No. 560 of 2012 under Section 9 of the Arbitration and Conciliation Act, 1996. An arbitral tribunal was constituted. Petitioners took out Chamber Summons (1215 of 2012) for amendment and sought to withdraw the petition. Respondents raised preliminary objection on territorial jurisdiction. Court heard arguments on jurisdiction and dismissed the petition.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9
- Code of Civil Procedure, 1908: Section 20
