Applications And Appeals Under Arbitration Act, Except International Arbitration Shall Be Heard By Designated Commercial Courts: SC
The Supreme Court has held that all applications or appeals arising out of arbitration under the provisions of Arbitration and Conciliation Act, 1996, other than international commercial arbitration, shall be heard by designated Commercial Courts.
"…all applications or appeals arising out of arbitration under the provisions of Act, 1996, other than international commercial arbitration, shall be filed in and heard and disposed of by the Commercial Courts, exercising the territorial jurisdiction over such arbitration where such commercial courts have been constituted.", the Bench of Justice MR Shah and Justice Krishna Murari held.
The Court was hearing an appeal challenging the decision of Calcutta High Court dismissing the petitions filed against a notification by the State of Odisha in establishing the Court of the Civil Judge (Senior Division) as Commercial Courts.
Advocate Uttara Babbar appeared on behalf of the respective appellants – original writ petitioners and Advocate Gaurav Aggarwal appeared as Amicus Curiae appointed by the Court.
The question of law before the Supreme Court was, whether in exercise of powers under Section 3 of the Commercial Courts Act, 2015, the State Government can confer jurisdiction to hear applications under Sections 9, 14 and 34 of the Arbitration and Conciliation Act, 1996, upon Commercial Courts which are subordinate to the rank of the Principal Civil Judge in the District, contrary to the provisions of Section 2(1)(e) of the Arbitration Act.
The Court observed that the Objects and Reasons of Commercial Courts Act, 2015 is to provide for speedy disposal of the commercial disputes which includes the arbitration proceedings.
The Court noted that to achieve the said Objects, the legislature in its wisdom has specifically conferred the jurisdiction in respect of arbitration matters as per Section 10 of the Act, 2015.
"…considering the aforestated provisions of the Act, 2015 and the Objects and Reasons for which the Act, 2015 has been enacted and the Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts are established for speedy disposal of the commercial disputes including the arbitration disputes, Sections 3 & 10 of the Act, 2015 shall prevail…", the Court noted.
The Court observed that if the submission of the appellants that all applications/appeals arising out of arbitration under the provisions of Act, 1996, other than the international commercial arbitration, shall lie before the principal civil Court of a district, in that case, not only the Objects and Reasons of enactment of Act, 2015 and establishment of commercial courts shall be frustrated, even Sections 3, 10 & 15 shall become otiose and nugatory.
The Court further observed "If the submission on behalf of the appellants is accepted, in that case, though with respect to other commercial disputes, the applications or appeals shall lie before the commercial courts established and constituted under Section 3 of Act, 2015, with respect to arbitration proceedings, the applications or appeals shall lie before the principal civil Court of a district. There cannot be two fora with respect to different commercial disputes."
Therefore, the Court held that notification issued by the State of Odisha issued in consultation with the High Court of Orissa to confer jurisdiction upon the Court of Civil Judge (Senior Division) designated as Commercial Court to decide the applications or appeals arising out of arbitration cannot be said to be illegal and bad in law.
Accordingly, the Court dismissed the appeals.
Cause Title- Jaycee Housing Pvt. Ltd. & Ors. v. Registrar (General), Orissa High Court, Cuttack & Ors. with connected matters