Case Note & Summary
The petitioner, United India Insurance Company Limited, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an interim award dated 30 November 2018 passed by the learned arbitrator. The interim award held that the claims made by the respondent, Eastern Bulk Company Limited, were not barred by limitation. The respondent raised a preliminary issue regarding the territorial jurisdiction of the Bombay High Court to entertain the petition. The court heard both parties on this preliminary issue. The relevant facts are that the respondent purchased a vessel M.V. Yue Cheng (renamed M.V. Pallavi) and insured it with the petitioner under a Marine Hull Time Policy issued in Kolkata on 29 July 2009. The vessel suffered engine failure between 16-20 December 2009, and repairs were completed on 25 April 2010. The petitioner made a payment of Rs.32 lacs to the respondent in Kolkata on 23 July 2010. The respondent made a claim on 30 August 2010. The arbitration clause in the policy provided for arbitration in Kolkata. The arbitration proceedings were conducted in Kolkata, and the interim award was passed there. The court held that no part of the cause of action arose within the territorial limits of the Bombay High Court. The insurance policy was issued in Kolkata, the loss occurred outside Bombay, the repairs were done outside Bombay, and the arbitration was conducted in Kolkata. The mere fact that the petitioner has an office in Bombay does not confer jurisdiction. Therefore, the court dismissed the petition for lack of jurisdiction, leaving the petitioner to seek remedies before the appropriate court.
Headnote
A) Arbitration - Territorial Jurisdiction - Section 2(1)(e) read with Section 34 of the Arbitration and Conciliation Act, 1996 - The court held that for a petition under Section 34, the court having jurisdiction is the court where the arbitration is conducted or where the award is made, or where the cause of action arises. In this case, the insurance policy was issued in Kolkata, the loss occurred outside Bombay, repairs were done outside Bombay, and the arbitration was conducted in Kolkata. No part of cause of action arose within the territorial limits of the Bombay High Court. (Paras 1-10) B) Arbitration - Cause of Action - Insurance Claim - The court held that the cause of action for the insurance claim arose in Kolkata where the policy was issued and where the claim was made. The mere fact that the petitioner has an office in Bombay does not confer jurisdiction. (Paras 3-8) C) Arbitration - Section 34 Petition - Place of Arbitration - The court held that the place of arbitration is Kolkata as per the arbitration clause and the conduct of proceedings. Therefore, the Bombay High Court has no jurisdiction. (Paras 2-10)
Issue of Consideration
Whether the Bombay High Court has territorial jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an interim award on limitation, when the insurance policy was issued in Kolkata, the vessel was repaired outside Bombay, and the arbitration was conducted in Kolkata.
Final Decision
The court upheld the preliminary objection and dismissed the petition for lack of territorial jurisdiction. The petitioner is at liberty to file an appropriate petition before the appropriate court.
Law Points
- Territorial jurisdiction under Section 2(1)(e) of the Arbitration and Conciliation Act
- 1996
- Cause of action for insurance claim
- Place of arbitration
- Section 34 petition jurisdiction
