Case: State of West Bengal &amp; Others Vs. Associated Contractors

The referral order readsthis appeal, the question that arises for decision is which Court will have the jurisdiction to entertain and decide an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter for short the Act).The facts necessary to decide this matter are as follows:Inan Item Rate Tender was duly executed and signed between the respondent Associated Contractors and the concerned Superintending Engineer for execution of the work of excavation and lining of TeestaJaldhaka Main Canal from Chainage 3 Kms. to 3.625 Kms. in Police Station: Mal, District: Jalpaiguri, West Bengal. Para 25 of the said Item Rate Tender and Contract contained an arbitration clause.3. The respondent herein filed an application under Section 9 of the Arbitration Act, 1996 for interim orders in the High Court of Calcutta. A learned Single Judge of the High Court of Calcutta, after granting leave under Clause 12 of the Letters Patent, passed ane injunction order. This order was continued from time to time until it was confirmed by an order dated 10th December, 1998. Meanwhile, in an application under Section 11 of the Arbitration Act, Justice B.P. Banerjee (retired), was appointed as an Arbitrator to adjudicate upon the disputes between the parties. A Recalling Application filed by the State was dismissed on 20th January, 2000.4. An appeal was filed against the order dated 10th December, 1998, confirming thee injunction. On 5th July, 2000, delay in filing the appeal was condoned and on 20th July, 2000, the interim order was stayed by the Division Bench. The Arbitrator was, however, asked to complete the proceedings before him which would go on uninterrupted.5. Meanwhile, several orders were passed by the High Court regarding remuneration of the Arbitrator and payment of the same. The arbitration proceedings culminated in an Award dated 30th June, 2004 by which the claimant was awarded a sum of Rs.2,76,97,205.00 with 10% interest from 1st July, 1998 till the date of the Award. If not paid within four months, the same would then attract interest at the rate of 18% per annum. Costs were also awarded in the sum of Rs.The counter claims of the respondent were rejected.6. On 21st September, 2004, the State of West Bengal filed an application under Section 34 of the 1996 Act to set aside the arbitral Award before the Principal Civil Court of the learned District Judge at Jalpaiguri, West Bengal. On 6th October, 2004, the learned District Judge at Jalpaiguri issued notice to the other side directing the respondent to appear and file its written objections on or before 4th January, 2004. On 10th December, 2004, the respondent filed an application under Article 227 of the Constitution challenging the jurisdiction of the court of the learned District Judge at Jalpaiguri. By the impugned judgment dated 11th April, 2005, a Single Judge of the High Court of Calcutta allowed the petition under Article 227I hold that since the parties already had submitted to the jurisdiction of this Court in its Ordinary Original Civil jurisdiction in connection with different earlier proceedings arising out of the said contract, as indicated above, the jurisdiction of the court of the learned District Judge at Jalpaiguri to entertain the said application for setting aside of the award was excluded under Section 42 of the said Act. Thus, I find that this Court in its Ordinary Original Civil Jurisdiction is the only court which can entertain an application for setting aside the said award. The Revisional Application, thus, stands allowed. The impugned notice is, thus,

Reasoning:
25. Our conclusions therefore on Section 2(1)(e) and Section 42 of the Arbitration Act, 1996 are asSection 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of original jurisdiction in a district or a High Court having original civil jurisdiction in the State, and no other court asfor the purpose ofof the Arbitration Act, 1996.(b) The expressionrespect to an arbitrationmakes it clear that Section 42 will apply to all applications made whether before or during arbitral proceedings or after an Award is pronounced underof the 1996 Act.(c) However, Section 42 only applies to applications made underif they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42.(d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42.(e) In no circumstances can the Supreme Court befor the purposes of Section 2(1)(e), and whether the Supreme Court does or does not retain seisin after appointing an Arbitrator, applications will follow the first application made before either a High Court having original jurisdiction in the State or a Principal Civil court having original jurisdiction in the district as the case may be.(f) Section 42 will apply to applications made after the arbitral proceedings have come to an end provided they are made underIf a first application is made to a court which is neither a Principal Court of original jurisdiction in a district or a High Court exercising original jurisdiction in a State, such application not being to a court as defined would be outside Section 42. Also, an application made to a court without subject matter jurisdiction would be outside Sectionreference is answered accordingly.If an application were to be preferred to a Court which is not a Principal Civil Court of original jurisdiction in a district, or a High Court exercising original jurisdiction to decide questions forming the subject matter of an arbitration if the same had been the subject matter of a suit, then obviously such application would be outside the four corners of Section 42. If, for example, an application were to be filed in a court inferior to a Principal Civil Court, or to a High Court which has no original jurisdiction, or if an application were to be made to a court which has no subject matter jurisdiction, such application would be outside Section 42 and would not debar subsequent applications from being filed in a court other than such court.