Bombay HC: Commercial Courts Neither Interferes with nor Divests HC’s or SC’s Authority to Select Arbitrators

Khushi Bajpai

Published on: September 12, 2022 at 20:14 IST

The Commercial Courts Act (CCA), according to a recent ruling by the Bombay High Court [Uttam Energy Ltd. vs. Shivratna Udyog Ltd.], neither interferes with nor divests the High Court’s or Supreme Court’s authority to select arbitrators under the Arbitration and Conciliation Act.

The business Uttam Energy Ltd. requested the creation of an arbitral tribunal to resolve a disagreement between parties arising from a contract, and the court decided to grant that request.

The petitioner admitted that the arbitration provision of the agreement was not in dispute. Invoking the clause, the petitioner company gave Shivratna Udyog notice to choose a sole arbitrator.

However, the present petition was finally submitted because there was no response.

This case was first brought on the original side of the High Court as a petition for commercial arbitration on the grounds that the conflict between the parties constituted a commercial issue.

As there had been no basis to request such jurisdiction inside Mumbai, the matter was permitted to be transferred to the appellate side.

The respondent objected to the petition’s maintainability in order to oppose the application. In it, the following was argued:

  • The High Court on the appeal side would not have jurisdiction to appoint an arbitrator because the current procedures are in the character of commercial arbitration proceedings;
  • That all petitions or appeals arising out of an arbitration under the ACA, if it is not an international commercial arbitration, must be filed with any major civil court of original jurisdiction in the district (and not a High Court) with territorial jurisdiction over the arbitration;
  • Pune or Solapur, rather than Mumbai, would be the primary civil court with original jurisdiction over the current process.

The petitioner responded by claiming that only the High Court has the authority to name an arbitral panel in accordance with Section 11 of the ACA.

The High Court determined that Section 10(3)(1) and Section 6 of CCA do not interfere with or divest the High Court’s authority and jurisdiction under Section 11 of ACA after hearing arguments from both sides.

To take within the meaning of Section 10(3)(1) of CCA the jurisdiction and power with respect to the appointment of an arbitral tribunal, to be exercised by the Commercial Court exercising territorial jurisdiction over such arbitration, when the exclusive jurisdiction to make appointment of an arbitral tribunal with respect to Section 11 of the ACA is conferred on the High Court or the Supreme Court”, the Court held.

After resolving this matter, the Court also stated that an arbitration agreement existed, which was necessary for exercising jurisdiction under Section 11(6) read with sub-section (6-A) of the ACA, and since the agreement existed, an arbitrator could be chosen.

Related Post