Case: General Manager East Coast Railway Rail Sadan &amp; Anr Vs. Hindustan Construction Co. Ltd

2. As such the dispute in the present appeal is in a very narrow compass.3. The dispute arose between the appellant and the respondent with respect to the contract/agreement dated 29.11.2018. That the respondent herein - original claimant initiated the proceedings under Section 9 of the Arbitration Act before the learned Additional District Judge, Visakhapatnam seeking interim injunction against the encashment of Performance Bank Guarantee and forfeiture of security deposit. The said application came to be allowed by the learned Additional District Judge vide order dated 06.11.2019 restraining the appellants herein from forfeiting security deposit for period of six months except on the special circumstances.4. That thereafter the respondent vide letter dated 01.12.2019 requested the appellant to constitute the Arbitral Tribunal raising five claims. It appears that in terms of the Arbitration Agreement, arbitration proceedings were initiated by the appellants by appointing an arbitrator to adjudicate the dispute between the parties. That the Arbitrator issued notices calling upon the parties to submit their respective claims. The respondent herein sought time vide letter dated 02.04.2020 for filing the claim in view of Covid-19 Pandemic. The Arbitrator adjourned the proceedings to 03.04.2020. Instead of submitting the claim, vide letter dated 01.09.2020 the respondent questioned the validity of arbitral tribunal. Thereafter the respondent filed the Arbitration Petition No.10 of 2021 before the High Court of Orissa at Cuttack under Section 11(6) of the Act seeking appointment of an Arbitrator. The said application was opposed by the appellants relying upon Section 42 of the Arbitration Act and it was the case on behalf of the appellants that in view of Section 42 of the Arbitration Act, the application under Section 11(6) of the Act shall lie before the High Court of Andhra Pradesh at Amaravati as the respondent itself earlier filed Section 9 application before the Court at Vishakhapatnam. It was also submitted on behalf of the appellants that procedure dated 16.11.2016 upon which reliance has been placed by the respondent was superseded by GCC issued by Railway Board in November, 2018. Despite the above jurisdictional issue raised and without addressing on the jurisdiction of the Orissa High Court, by the impugned judgment and order the High Court of Orissa at Cuttack has appointed the Arbitrator solely by observing that since the appellant, East Coast Railways in principle, is not opposing the appointment of an Arbitrator there is little purpose served in relegating the respondent (original petitioner) to the appropriate High Court as that will only delay the adjudication of the disputes.5. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Orissa at Cuttack, the original respondent – General Manager – East Coast Railway has preferred the present appeal.

Reasoning: 7.1 It is not in dispute that before filing an application under Section 11(6) of the Act before the High Court of Orissa at Cuttack, the respondent – claimant moved an application before the Court at Visakhapatnam under Section 9 of the Arbitration Act. In that view of the matter considering Section 42 of the Arbitration Act, the High Court of Andhra Pradesh at Hyderabad alone would have jurisdiction to decide the subsequent applications arising out of the Contract Agreement and the further arbitral proceedings shall have to be made in the High court of Andhra Pradesh at Amaravati alone and in no other court. In that view of the matter the High Court of Orissa at Cuttack has committed a serious error in entertaining the application under Section 11(6) of the Act before it and appointing the sole arbitrator.