Bombay High Court dismisses appeal challenging jurisdiction in view of Section 42 of Arbitration Act

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Bombay High Court: An appeal was filed challenging an order dated 26-04-2023 wherein it was held that the Court does not have jurisdiction to entertain the commercial Arbitration petition. A division bench of Devendra Kumar Upadhyay, CJ., and Arif S Doctor, J., dismissed the appeal and directed the appellant to move the present Commercial Arbitration Petition before the Principal District Court Thane within a period of four weeks from the date of order.

The Appellant is a Cooperative Housing Society who had, in the year 2015, invited tenders for civil structural repairs etc. Thereafter an Agreement was entered into with the Respondent for the said work at Navi Mumbai. All the disputes and differences between the parties were deemed to have arisen in Navi Mumbai. A civil miscellaneous application was filed under Section 9 of Arbitration and Conciliation Act, 1996. An objection as to the jurisdiction of the Principal District Judge, Thane was taken by the Appellant, however, the said application was disposed of on merits by an order dated 03-02-2017 and the application was not dismissed on the grounds of lack of jurisdiction.

Subsequently, the Respondent filed an Arbitration Petition under Section 11 of the Arbitration Act which was disposed of by an order dated 06-12-2018, observing that “the venue of the Arbitration shall be at Navi Mumbai.” The Arbitrator passed an award stating “as directed by the Hon’ble High Court, all the meetings, except two, were held in Navi Mumbai. Due to some unavoidable circumstances, two meetings were held in Mumbai, with the consent of both the parties in the matter.” The award was challenged by the commercial arbitration petition and the impugned order was passed.

Counsel for the appellant submitted that the place of arbitration as determined by the Arbitral Tribunal was Mumbai and thus the commercial arbitration petition was correctly filed in the Court. He stated that the seat/ place was Mumbai by relying on Section 31(4) of the Arbitration Act which mandates that the Arbitral Award must inter alia state its date and the place of Arbitration. It was also submitted that once the place/seat of arbitration had been determined, all applications had to be made only to the Court having jurisdiction over the place/seat of Arbitration. It was stated that as the application under Section 9 of the Arbitration Act filed by the Respondent was filed at a stage prior to the determination of the place/seat of arbitration, thus, the impugned order was in error to place reliance on Section 42 of Arbitration Act to hold that the present Court would not have jurisdiction since the Respondent had filed a Petition under Section 9 of the Arbitration Act in the Principal District Court Thane.

Counsel for respondent submitted that the place/seat of arbitration in the fact of the present case was a wholly irrelevant factor since the Respondent had first approached the Principal District Court Thane under Section 9 of the Arbitration Act. As per Section 42 of the Arbitration Act, notwithstanding anything contained elsewhere or in any other law where with respect to an Arbitration Agreement any application has been made to a Court (which had jurisdiction) that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of the said Arbitration Agreement and arbitral proceedings shall be made to that Court alone i.e., the Court which was first approached. Thus, with respect to the jurisdiction of the Principal District Court Thane, Section 9 Petition was infact heard and disposed of on merits and the Appellant did not challenge that order. Therefore, in view of Section 42 of the Arbitration Act, only the Principal District Court Thane would have the requisite jurisdiction to entertain, try and dispose of the captioned Commercial Arbitration Petition.

The Court noted that the application under the Arbitration Agreement between the parties was made by the Respondent to the Principal District Court, Thane and that application under Section 9 was disposed of on merits despite the objection of the Appellants qua jurisdiction of the Principal District Court Thane and that the order passed by the Principal District Court, Thane was never challenged by the Appellant. Thus, the Principal District Court, Thane was the first Court in which an application was made under said Arbitration Agreement and that part of the cause of action had arisen within the jurisdiction of the Principal District Court, Thane.

The Court concluded that it would only be the Principal District Court, Thane, and no other court that would have jurisdiction to entertain, try, and dispose of the Commercial Arbitration Petition given that the same was a subsequent application arising out of the arbitral proceedings.

[Gurumahima Heights Cooperative Housing Society Ltd. V. Admirecon Infrastructure Pvt Ltd., 2023 SCC OnLine Bom 2703, decided on 30-11-2023]

Advocates who appeared in this case :

Mr. Vyom Shah a/w Aragh Pradhan, Anand Iyer, J. Shah and Anston Vaz i/by Divya Shah Associates for Appellant.

Mr. Ajinkya Kurdukar for Respondent.

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