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Commercial Court Cannot Be Regarded As A “Person Or Institution” : Bombay High Court

The Bombay High Court has ruled thatCommercial Court Cannot Be Regarded As A “Person Or Institution” Under Section 11(6) Of The A&C Act: Bombay High Court through the learned bench consisting of  Justice G.S. Kulkarni in the case of Uttam Energy Ltd. versus Ms. Shivratna Udyog Ltd. (Arbitration Petition No. 79 Of 2022)

FACTS OF THE CASE

This is a petition filed under section 11 of the Arbitration and Conciliation Act, 1996 (for short “ACA”) whereby the petitioner has prayed for appointment of an arbitral tribunal to adjudicate the disputes and differences between the parties, which have arisen under two Agreements entered by the petitioner with the respondent both dated 30 June, 2012 for Design, Procure, Manufacture, Supply. There is no dispute in regard to the arbitration agreement as contained in both the agreements, which is contained in the respective agreements. As disputes and differences had arisen between the parties, the petitioner by its advocate’s notice dated 3 December, 2020 invoked the arbitration agreement and called upon the respondent to appoint a sole arbitrator to adjudicate the disputes which have arisen between the parties. The petitioner’s claim against the respondent is of an amount Rs.1,33,37,723/-. As the notice invoking arbitration was not replied, the present petition was required to be filed by the petitioner. 

OBSERVATION OF THE COURT:

According to the court, “Thus, to read into sub-section (3) of Section 10 of the Commercial Courts Act to take within its ambit 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 the ACA, it would amount to a complete misreading of sub-section (3) of Section 10 of the Commercial Courts Act, and in fact would lead to an absurdity. Such an interpretation can never be accepted in terms of what Section 11 categorically provides qua the powers of the High Court to appoint an arbitral tribunal.”

 

“It would be absurdity to accept such argument inasmuch as the Commercial court would be a “Court” exercising judicial powers as clear from the provisions of Commercial Courts Act, 2015. Thus, sub-section (6) of Section 11 of the ACA when uses the word “any person or institution” necessarily it would be a person or any institution which is not a Court and which would not have any judicial power and by virtue of such designation under sub-section (6-B) of Section 11, it shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court.”

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Judgement reviewed by – Sudarshana Jha

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