Case Note & Summary
The petitioner, M/s D.M. Corporation Pvt. Ltd., filed a Writ Petition under Article 227 of the Constitution of India challenging an order dated 30 November 2017 passed by the Principal District Judge, Satara, below Exhibit-44 in Arbitration Application No. 235 of 2016. The order allowed the application filed by Respondent Nos. 2 to 5 under Section 15 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Commercial Courts Act) seeking transfer of the arbitration application to the Commercial Court. The petitioner had originally filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator in relation to a works contract for construction of a canal. The respondents contended that the dispute was a commercial dispute under Section 2(1)(c) of the Commercial Courts Act and that the District Court lacked jurisdiction to entertain the arbitration application after the establishment of the Commercial Court. The Principal District Judge allowed the transfer application. The petitioner challenged this order, arguing that Section 15 of the Commercial Courts Act only applies to suits and not to arbitration applications, and that the arbitration application was filed before the Commercial Court was established. The High Court dismissed the petition, holding that Section 15 of the Commercial Courts Act empowers the District Court to transfer any pending proceeding, including an arbitration application, to the Commercial Court if it relates to a commercial dispute. The court noted that the definition of commercial dispute under Section 2(1)(c) includes disputes arising out of works contracts, and that the arbitration application was a proceeding pending before the District Court. The court further held that the date of filing of the application is irrelevant for the purpose of transfer under Section 15, as the provision applies to all pending proceedings. The petition was dismissed with no order as to costs.
Headnote
A) Commercial Courts Act - Transfer of Pending Proceedings - Section 15 - Jurisdiction - The District Court has power under Section 15 of the Commercial Courts Act, 2015 to transfer a pending arbitration application to the Commercial Court if the subject matter is a commercial dispute, even if the application was filed before the establishment of the Commercial Court. The court rejected the argument that Section 15 only applies to suits and not to arbitration applications. (Paras 5-10)
B) Commercial Courts Act - Definition of Commercial Dispute - Section 2(1)(c) - The dispute between the petitioner and respondents arising out of a works contract for construction of a canal falls within the definition of a commercial dispute under Section 2(1)(c) of the Act. (Para 6)
C) Arbitration and Conciliation Act, 1996 - Application under Section 11 - The arbitration application filed under Section 11 of the Arbitration and Conciliation Act, 1996 is a proceeding that can be transferred under Section 15 of the Commercial Courts Act, as it is a proceeding relating to a commercial dispute. (Paras 7-8)
Issue of Consideration
Whether the Principal District Judge, Satara, had jurisdiction to transfer an Arbitration Application pending before it to the Commercial Court under Section 15 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, when the application was filed prior to the establishment of the Commercial Court.
Final Decision
The High Court dismissed the Writ Petition, upholding the order of the Principal District Judge, Satara, dated 30 November 2017, and directed that the Arbitration Application No. 235 of 2016 be transferred to the Commercial Court. No order as to costs.
Law Points
- Section 15 of Commercial Courts Act
- 2015
- Article 227 of Constitution of India
- Transfer of pending proceedings to Commercial Court
- Commercial dispute definition
Case Details
2018 LawText (BOM) (04) 100
WRIT PETITION NO. 3119 OF 2018
DR.SHALINI PHANSALKAR-JOSHI, J.
Mr.Shrikrishna R. Ganbavale for the Petitioner, Mr.S.H. Kankal, A.G.P. for Respondent No.1, Mr.N.N. Singh for Respondent No.5
M/s.D.M. Corporation Pvt. Ltd.
The State of Maharashtra & Ors.
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Nature of Litigation
Writ Petition under Article 227 of the Constitution of India challenging an order of the Principal District Judge, Satara, allowing transfer of an arbitration application to the Commercial Court under Section 15 of the Commercial Courts Act, 2015.
Remedy Sought
The petitioner sought quashing of the order dated 30 November 2017 passed by the Principal District Judge, Satara, below Exhibit-44 in Arbitration Application No. 235 of 2016.
Filing Reason
The petitioner challenged the order on the ground that Section 15 of the Commercial Courts Act applies only to suits and not to arbitration applications, and that the arbitration application was filed before the establishment of the Commercial Court.
Previous Decisions
The Principal District Judge, Satara, allowed the application at Exhibit-44 filed by Respondent Nos. 2 to 5 under Section 15 of the Commercial Courts Act, 2015, seeking transfer of the Arbitration Application No. 235 of 2016 to the Commercial Court.
Issues
Whether Section 15 of the Commercial Courts Act, 2015 applies to arbitration applications pending before the District Court?
Whether the date of filing of the arbitration application is relevant for the purpose of transfer under Section 15?
Whether the dispute between the parties is a commercial dispute under Section 2(1)(c) of the Commercial Courts Act?
Submissions/Arguments
Petitioner argued that Section 15 of the Commercial Courts Act applies only to suits and not to arbitration applications, and that the arbitration application was filed before the Commercial Court was established, so it cannot be transferred.
Respondents argued that the dispute is a commercial dispute under Section 2(1)(c) of the Act, and Section 15 empowers the District Court to transfer any pending proceeding, including an arbitration application, to the Commercial Court.
Ratio Decidendi
Section 15 of the Commercial Courts Act, 2015 empowers the District Court to transfer any pending proceeding, including an arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996, to the Commercial Court if the subject matter is a commercial dispute as defined under Section 2(1)(c) of the Act. The date of filing of the proceeding is irrelevant for the purpose of transfer under Section 15.
Judgment Excerpts
Section 15 of the Commercial Courts Act, 2015 empowers the District Court to transfer any pending proceeding, including an arbitration application, to the Commercial Court if it relates to a commercial dispute.
The definition of commercial dispute under Section 2(1)(c) includes disputes arising out of works contracts.
The date of filing of the application is irrelevant for the purpose of transfer under Section 15.
Procedural History
The petitioner filed Arbitration Application No. 235 of 2016 under Section 11 of the Arbitration and Conciliation Act, 1996 before the Principal District Judge, Satara. Respondent Nos. 2 to 5 filed an application at Exhibit-44 under Section 15 of the Commercial Courts Act, 2015 seeking transfer of the arbitration application to the Commercial Court. The Principal District Judge allowed the application on 30 November 2017. The petitioner challenged this order by filing Writ Petition No. 3119 of 2018 under Article 227 of the Constitution of India before the High Court of Bombay. The High Court dismissed the petition on 5 April 2018.
Acts & Sections
- Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015: Section 15, Section 2(1)(c)
- Constitution of India: Article 227
- Arbitration and Conciliation Act, 1996: Section 11
