Case Note & Summary
The petitioner, Premlaxmi And Co., filed an Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 in the Bombay High Court challenging an arbitral award dated 3rd April 2009. The award was passed by an Arbitral Tribunal constituted under an agreement between the petitioner and the respondents, including Konkan Railway Corporation Ltd. The dispute arose out of a construction contract for a tunnel at Ratnagiri. The petitioner had earlier filed an application under Section 11 of the Act before the Bombay High Court, which led to the constitution of the arbitral tribunal. The tribunal held its meetings in Mumbai. The petitioner argued that since the Section 11 application was filed in the Bombay High Court, under Section 42 of the Act, the High Court had jurisdiction to entertain the Section 34 petition. The respondents opposed, contending that the cause of action arose at Ratnagiri, and therefore only the court at Ratnagiri had jurisdiction. The court analyzed Section 2(e) of the Act, which defines 'Court' as the principal civil court of original jurisdiction in the district where the cause of action arises or the subject matter of the arbitration is situated. It held that the basic cause of action arose at Ratnagiri, as the construction work was located there. The court distinguished between the 'Court' under Section 2(e) and the Chief Justice or designated judge under Section 11, stating that they are different entities. Relying on the Supreme Court's decision in Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, the court held that even if the arbitrator was appointed by the High Court, objections to the award must be filed before the Principal Civil Court of Original Jurisdiction as defined in Section 2(1)(e). The court concluded that the Bombay High Court lacked jurisdiction and dismissed the petition, leaving the petitioner to approach the appropriate court at Ratnagiri.
Headnote
A) Arbitration - Jurisdiction - Section 34 read with Section 2(e) of the Arbitration and Conciliation Act, 1996 - The court having jurisdiction to entertain a petition under Section 34 is the court where the cause of action arose or the subject matter of the arbitration is situated. The mere fact that the arbitral tribunal was constituted by the High Court under Section 11 does not confer jurisdiction on the High Court to entertain a Section 34 petition. The court at Ratnagiri, where the construction work was located, has jurisdiction. (Paras 3-5) B) Arbitration - Section 42 - Section 42 of the Arbitration and Conciliation Act, 1996 does not apply to confer jurisdiction on the High Court merely because a Section 11 application was filed there. The 'Court' under Section 2(e) and Section 42 is distinct from the Chief Justice or designated judge under Section 11. (Para 4) C) Precedent - Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency - The Supreme Court held that even if an arbitrator is appointed by the High Court under Section 11(6), the objections to the award can only be filed before the Principal Civil Court of Original Jurisdiction as defined in Section 2(1)(e) of the 1996 Act. (Para 5)
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996 when the cause of action arose at Ratnagiri and the arbitral tribunal was constituted by the High Court under Section 11 of the Act.
Final Decision
The Bombay High Court held that it lacks jurisdiction to entertain the Section 34 petition. The petition is dismissed. The petitioner is at liberty to approach the appropriate court at Ratnagiri.
Law Points
- Jurisdiction under Section 34 of the Arbitration and Conciliation Act
- 1996 is determined by the court where cause of action arises
- not where Section 11 application was filed
- Filing of Section 11 application before High Court does not confer jurisdiction under Section 42 for Section 34 petition
- Section 2(e) defines 'Court' as the principal civil court of original jurisdiction in the district where cause of action arises
