Case Note & Summary
The case involves an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against a judgment dated 21.03.2018 passed by the learned Principal District Judge, which dismissed a challenge under Section 34 of the Act to an arbitral award dated 29.07.2011. The appellants, the Government of India and its officers, had filed the Section 34 application on 17.10.2011. While the application was pending, the Commercial Courts Act, 2015 came into force. Section 15(2) of that Act mandated the transfer of all pending suits and applications, including those under the Arbitration Act, from civil courts to commercial courts. However, the application was not transferred and was decided by the civil court. The appellants amended their appeal to raise the jurisdictional objection, arguing that the Principal District Judge lacked jurisdiction to entertain the proceedings after the notification dated 30.06.2016 constituting Commercial Courts. The respondent argued that the civil court had jurisdiction. The High Court, relying on the decision in M/s D.M. Corporation Pvt. Ltd. v. The State of Maharashtra & Others, held that the civil court had no jurisdiction to decide the Section 34 application after the Commercial Courts Act came into force, as the proceedings were required to be transferred. The impugned judgment was set aside, and the matter was remitted to the Commercial Court for fresh adjudication on merits.
Headnote
A) Arbitration Law - Jurisdiction - Section 37 of Arbitration and Conciliation Act, 1996 - Section 15(2) of Commercial Courts Act, 2015 - Appeal against order on Section 34 application - The Civil Court lacked jurisdiction to decide the Section 34 application after the Commercial Courts Act, 2015 came into force, as the proceedings were required to be transferred to the Commercial Court under Section 15(2) of the 2015 Act. The impugned judgment was set aside and the matter remitted to the Commercial Court for fresh adjudication. (Paras 2-5)
Issue of Consideration
Whether the Principal District Judge had jurisdiction to decide an application under Section 34 of the Arbitration and Conciliation Act, 1996 after the Commercial Courts Act, 2015 came into force, given that the application was not transferred to the Commercial Court as required by Section 15(2) of the 2015 Act.
Final Decision
The appeal is allowed. The impugned judgment dated 21.03.2018 passed by the learned Principal District Judge is set aside. The proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 are restored to the file of the Commercial Court at Nagpur for fresh adjudication on merits. The parties are directed to appear before the Commercial Court on 28.10.2019.
Law Points
- Jurisdiction
- Transfer of proceedings
- Commercial Courts Act
- 2015
- Section 15(2)
- Arbitration and Conciliation Act
- 1996
- Section 34
- Section 37
Case Details
2019 LawText (BOM) (09) 169
Arbitration Appeal No. 14/2018
Shri S.G. Loney for appellants; Shri S. Bajaj with Shri C.S. Dhore for respondent no.1
Govt. of India, Ministry of Shipping, Road and Highways, Department of Road Transport and Highways, Transport Bhawan, 1, Sansad Marg, New Delhi – 110 012; D.G.R.D. & Spl. Secretary MOSRT & H GOI, Transport Bhawan, 1, Sansad Marg, New Delhi – 110 001; Chief Engineer, Govt. of Maharashtra, Public Works Department, Nagpur Region, Bandhakam Sankul, B.No.30, Civil Lines, Nagpur -1
M/s Jaiswal Ashoka Infrastructure Pvt.Ltd., F-8 MIDC Industrial Area, Hingna Road, Nagpur – 440 016; Arbitral Tribunal comprising of R.D. Tadvi, Sole Arbitrator, Acting Secretary (Roads) and Chief Engineer (Retired) PWD, Govt. of Maharashtra
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against a judgment dismissing a challenge under Section 34 of the Act to an arbitral award.
Remedy Sought
The appellants sought to set aside the judgment dated 21.03.2018 passed by the Principal District Judge on the ground that the civil court lacked jurisdiction to decide the Section 34 application after the Commercial Courts Act, 2015 came into force.
Filing Reason
The application under Section 34 of the Arbitration and Conciliation Act, 1996 was filed on 17.10.2011. While pending, the Commercial Courts Act, 2015 came into force, requiring transfer of such applications to Commercial Courts. The application was not transferred and was decided by the civil court, leading to the jurisdictional challenge.
Previous Decisions
The learned Principal District Judge dismissed the Section 34 application on 21.03.2018, upholding the arbitral award dated 29.07.2011.
Issues
Whether the Principal District Judge had jurisdiction to decide the Section 34 application after the Commercial Courts Act, 2015 came into force, given that the proceedings were not transferred to the Commercial Court as required by Section 15(2) of the 2015 Act.
Submissions/Arguments
Appellants: The civil court lost jurisdiction to entertain the Section 34 proceedings after the notification dated 30.06.2016 constituting Commercial Courts, and the impugned judgment is without jurisdiction. Reliance placed on M/s D.M. Corporation Pvt. Ltd. v. The State of Maharashtra & Others.
Respondent no.1: The civil court had jurisdiction to decide the application, and the appeal should be dismissed.
Ratio Decidendi
After the Commercial Courts Act, 2015 came into force, the civil court lacked jurisdiction to decide an application under Section 34 of the Arbitration and Conciliation Act, 1996, as such proceedings were required to be transferred to the Commercial Court under Section 15(2) of the 2015 Act. The decision of the civil court without jurisdiction is a nullity and must be set aside.
Judgment Excerpts
By virtue of provisions of Section 15(2) of the Act of 2015, all suits and applications including applications under the said Act were liable to be transferred to the Commercial Court from the Civil Court where they were pending.
The application under Section 34 of the said Act was not transferred as required but was decided by the Civil Court on 21.03.2018 instead of the Commercial Court.
Hence, after that date, the 'Court' lost the jurisdiction to entertain the proceedings which was vested with the Commercial Court.
Procedural History
The appellants filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 on 17.10.2011 challenging an arbitral award dated 29.07.2011. While the application was pending before the Principal District Judge, the Commercial Courts Act, 2015 came into force. The application was not transferred to the Commercial Court. On 21.03.2018, the Principal District Judge dismissed the Section 34 application. The appellants then filed the present appeal under Section 37 of the Act, which was allowed by the High Court on 26.09.2019.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 37
- Commercial Courts Act, 2015: Section 15(2)
