The Allahabad High Court held that the Commercial Court, under The Commercial Courts Act, 2015, had jurisdiction over the execution proceedings arising from an award passed under the Arbitration and Conciliation Act, 1996. Additionally, the Court confirmed that the execution could be initiated at any location within the country where the decree could be executed, as per Supreme Court's rulings. In this case, two applications under Article 227 were brought before the Court, challenging the orders dated passed by the Presiding Officer, Commercial Court No.2, Lucknow. By these orders, the objections filed by the petitioner against the executions filed by the respondent were dismissed. The respondent sought to enforce the award through execution applications filed in the Commercial Court at Lucknow.

A Bench of Justice Pankaj Bhatia held, “Although Section 32 of the Arbitration and Conciliation Act provides for termination of arbitral proceedings on the passing of the final award, however, the use of the phrase any application under this part used in Section 42 clearly refers to the filing of an application under Part-I of the Arbitration and Conciliation Act which includes Sections 36 under which the execution of award is provided for. Even otherwise, the execution of a decree is provided for and can be initiated by moving an application under Order 21 thus the word ‘application’, refers to in Section 10(3) would include the application for execution to be filed for execution of an award in terms of mandate of Section 36 of the Arbitration and Conciliation Act”

The dispute arose from an agreement between the petitioner and the respondent, which contained an Arbitration Clause. An Arbitral Tribunal was constituted due to a dispute arising from this agreement, which resulted in an award in favor of the respondent. The award included directions for reinstatement of the dealership and a monetary award.

Advocate S M Singh Royekwar appeared for the Petitioner and Advocate Girish Chandra Sinha appeared for the Respondent.

The issues before the Court were:

  • whether the Commercial Court constituted under The Commercial Courts Act, 2015 can hear and decide the execution proceedings arising out of an award passed under the Arbitration and Conciliation Act, 1996?
  • whether the Commercial Court at Lucknow have the territorial jurisdiction to hear the execution application?

The Court noted that the petitioner had argued that after the issuance of the award, all arbitral proceedings were terminated as per Section 32 of the Arbitration and Conciliation Act, 1996. Therefore, the execution proceedings did not fall under the scope of "applications or appeals arising out of arbitration" as specified in Section 10(3) of the Commercial Courts Act, 2015. However, the Court rejected this argument, stating that the word 'application' in Section 10(3) included the application for execution under Section 36 of the Arbitration and Conciliation Act, and thus, the Commercial Court had jurisdiction over the execution proceedings.

Regarding the territorial jurisdiction, the petitioner had contended that the execution should take place at the retail outlet’s location in Bahraich. The Court, relying on the Supreme Court's decisions in Sundaram Finance Limited v. Abdul Samad and Cheran Properties Limited v. Kasturi and Sons Limited, held that the enforcement of an award through execution could be initiated anywhere in the country where the decree could be executed. The choice of the award holder to file the execution at a particular place was valid.

The Court found no reason to interfere with the orders passed by the Commercial Court at Lucknow, and accordingly, the petitioner's applications were dismissed.

Cause Title: Bharat Petroleum Corporation Ltd. Mumbai v. Anoop Kumar Modi, [2023:AHC-LKO:68875]

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Allahabad High CourtJustice Pankaj Bhatia

Suchita Shukla