Madhya Pradesh HC: Commercial matters involving Arbitration disputes can only be heard by Commercial Court

Mar 4, 2021 #Arbitration #Commercial

Soni Satti

The Madhya Pradesh High Court has held that Commercial matters involving Arbitration disputes can only be heard by Commercial Court of the status of District Judge or Additional District Judge.

It held that a Civil Judge would not be the competent authority to entertain cases under Sections 9, 14, 34 & 36 of the Arbitration and Conciliation Act, 1996.

The controversy pertains to an apparent conflict between the Commercial Courts Act where Courts of Civil Judge are designated as Commercial Courts and the Arbitration Act where Courts of a grade inferior to Principal Civil Court have been barred from trying arbitration matters

The Court was presiding over a writ petition filed by Advocate Yashwardhan Raghuwanshi. It was the Petitioner’s case that the Court of Civil Judge is not a competent authority to try arbitration disputes

Concurring with the submissions made by the Petitioner, the Division Bench comprising Chief Justice Mohammad Rafiq and Justice Vijay Kumar Shukla held,

It would be evident from the language employed by the Legislature in the definition clause of “Court” in Section 2(1)(c) of the Arbitration Act that is intended to confer power in respect of the disputes involving arbitration on the highest judicial Court of a District to minimize the supervisory role of the Courts in the arbitral process and, therefore, purposely excluded any Civil Court of a grade inferior to such Principal Civil Court, or any Court of Small Causes”.

It added,

“Segregation of an arbitration matter based on a pecuniary limit is not what the law provides for. All the arbitration matters, irrespective of the value of the claim, are required to be adjudicated by the Principal Civil Court of original jurisdiction.”

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