Supervisory jurisdiction at the seat and strict construction of exclusive jurisdiction clauses govern Section 34 arbitration challenges.

For a domestic arbitration seated in India, the court at the seat has supervisory jurisdiction under Section 2(1)(e) to hear a Section 34 challenge. An earlier Section 9 application did not attract Section 42 because the prior proceedings before the Madras High Court were not pressed, so later proceedings were not confined to that forum. An exclusive jurisdiction clause must be strictly construed and will not exclude a statutory Section 34 petition unless it clearly covers that proceeding. The dismissal for want of jurisdiction was therefore set aside and the award challenge restored for consideration on merits.

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Issues: (i) Whether the High Court had jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996 when the arbitration was seated in Mumbai. (ii) Whether Section 42 of the Arbitration and Conciliation Act, 1996 ousted the High Court's jurisdiction because an application under Section 9 had earlier been filed before the Madras High Court. (iii) Whether the jurisdiction clause conferring exclusive jurisdiction on Chennai City Court applied to a petition under Section 34.

Issue (i): Whether the High Court had jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996 when the arbitration was seated in Mumbai.

Analysis: Under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, jurisdiction lies both with the court where the cause of action is situated and with the court exercising supervisory control over the arbitration. Since the arbitration took place in Mumbai and the award was made there, the High Court had supervisory jurisdiction over the arbitral proceedings.

Conclusion: The petition under Section 34 was maintainable before the High Court.

Issue (ii): Whether Section 42 of the Arbitration and Conciliation Act, 1996 ousted the High Court's jurisdiction because an application under Section 9 had earlier been filed before the Madras High Court.

Analysis: Section 42 applies only where an application under Part I has been made in a court and is pressed. Here, the earlier Section 9 proceedings before the Madras High Court were not pressed, and the later Section 11 proceedings were entertained by the High Court. In those circumstances, Section 42 did not confine subsequent proceedings to the Madras High Court.

Conclusion: Section 42 did not bar jurisdiction of the High Court.

Issue (iii): Whether the jurisdiction clause conferring exclusive jurisdiction on Chennai City Court applied to a petition under Section 34.

Analysis: A clause excluding jurisdiction must be strictly construed and can operate only where more than one court otherwise has jurisdiction over the subject matter. The clause in question referred to suits touching disputes arising out of the agreement and did not expressly extend to a petition under Section 34 for setting aside an arbitral award.

Conclusion: The jurisdiction clause did not exclude the High Court's jurisdiction under Section 34.

Final Conclusion: The dismissal for want of jurisdiction was erroneous, and the challenge to the arbitral award was restored for consideration on merits before the learned Single Judge.

Ratio Decidendi: For a domestic arbitration seated in India, the court at the seat of arbitration has supervisory jurisdiction under Section 2(1)(e), and an exclusive jurisdiction clause must be strictly construed so as not to exclude a statutory petition unless it clearly covers that proceeding.

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