Commercial Courts Act does not divest powers of High Court to appoint arbitrator: Bombay High Court

The Bombay High Court recently observed that the Commercial Courts Act (CCA) does not disturb or divest powers of the High Court or Supreme Court to appoint arbitrators under the Arbitration and Conciliation Act (Act) [Uttam Energy Ltd. v. Shivratna Udyog Ltd.]..The decision of the Court came in an application filed by a company Uttam Energy Ltd. seeking appointment of an arbitral tribunal to adjudicate the dispute arising between parties out of contractual agreements.The petitioner admitted there was no dispute with regards to the clause providing for arbitration in the agreement. The petitioner company had invoked the clause and sent a notice to the respondent, Shivratna Udyog, to appoint sole arbitrator.However, since there was no response to the same, the present petition came to be filed.This petition was initially filed on the original side of the High Court as a commercial arbitration petition, on the assumption that the dispute between the parties was a commercial dispute. When it was noted that no cause of action to invoke such jurisdiction had arisen within Mumbai, the petition was permitted to the transferred to the appellate side..The respondent opposed the application raising an objection on the maintainability of the petition. It contended the following:that since the present proceedings are in the nature of commercial arbitration proceedings, the High Court on the appellate side would not have jurisdiction to appoint an arbitrator;that if an arbitration is not than an international commercial arbitration, all applications or appeals arising out of such arbitration under the ACA would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) exercising territorial jurisdiction over such arbitration;that the principal civil court of original jurisdiction in the present proceeding would be the designated court at Pune or Solapur, and not Mumbai.In reply, the petitioner stated that the jurisdiction to appoint an arbitral tribunal under Section 11 of the ACA vests exclusively with the High Court..After hearing both sides, the High Court came to the conclusion that Section 10(3)(1) and Section 6 of CCA does not disturb or divest powers and jurisdiction of the High Court under section 11 of ACA.“To take within the of Section 10(3)(1) of CCA the jurisdiction and power in relation 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 within the meaning of section 11 of the ACA is conferred on the High Court or the Supreme Court as the case may be under section 11 of ACA, it would amount to a complete misreading of Section 10(3)(1) of CCA and in fact would lead to an absurdity,” the Court held..Having settled this issue, the Court also noted that there existed an arbitration agreement which was required for exercising jurisdiction under Section 11(6) read with sub-section (6-A) of the ACA, and since the same was present, an arbitrator could be appointed..Advocates Aman Kacheria, Rahul Agarwal and Jasmin Puranik appeared for the petitioner. Advocates Abhijit Kulkarni and Milind Prabhune appeared for the respondent.[Read Order]

Commercial Courts Act does not divest powers of High Court to appoint arbitrator: Bombay High Court

Neha Joshi

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