2013 (9) TMI 1208 - HC - Indian Laws

Jurisdiction clause not applicable in arbitration petition under Section 34

Vachaspati Sharma Versus India Cements-Capital and Finance Limited

The Bombay High Court held that the jurisdiction clause in the agreement did not apply to an arbitration petition under Section 34 of the Arbitration and ... - Issues involved: Jurisdiction of the court to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996.Summary:The appeal before the Bombay High Court arose from a judgment of a learned Single Judge regarding the jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996. The lease agreement between the parties contained clauses related to arbitration and jurisdiction. The Respondent initially filed a petition under Section 9 of the Act in the Madras High Court, while the Appellant filed a petition under Section 9 before the Bombay High Court. Subsequently, the Appellant filed proceedings under Section 11 of the Act before the Bombay High Court for appointment of an arbitrator. The sole arbitrator made an award, following which the Appellant filed a petition under Section 34 before the Bombay High Court. The learned Single Judge dismissed the petition based on the jurisdiction clause in the agreement.The High Court considered the effect of the jurisdiction clause in the agreement and referred to the Supreme Court judgment in Bharat Aluminium Co. Vs. Kaiser Aluminium Technical Service, Inc. The Supreme Court held that courts where the arbitration takes place would have supervisory jurisdiction. In the present case, as the arbitration took place in Mumbai, the Bombay High Court would have supervisory jurisdiction, making the petition under Section 34 maintainable.It was argued that under Section 42 of the Act, once an application under Section 9 was filed by the Respondent before the Madras High Court, only that Court would have jurisdiction. However, as the Respondent did not press the proceedings under Section 9 before the Madras High Court, Section 42 would not oust the jurisdiction of the Bombay High Court.The High Court held that the jurisdiction clause in the agreement did not apply to an arbitration petition under Section 34. It was emphasized that exclusion of jurisdiction must be strictly construed. The Court concluded that the learned Single Judge erred in dismissing the arbitration petition for want of jurisdiction and allowed the appeal, restoring the matter for consideration of the challenge to the arbitral award.The appeal was disposed of with no order as to costs.