Supreme Court holds that when a Section 34 petition is simultaneously filed in a District court and a High Court the High Court having ordinary original civil side jurisdiction will have primacy to hear the petition.
The Supreme Court (“SC”) in its recent judgment of Executive Engineer, Road Development Division No.III, Panvel & Anr. v Atlanta Limited1 has analysed the definition of “Court” to determine which court would hear challenges to an arbitral award (or arbitral agreement, or arbitral proceeding) where jurisdiction lies with more than one court and the parties initiate proceedings in multiple courts simultaneously.
Section 2(1)(e) of the Act which defines the term “Court” as:
“’Court’ means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes”
Conclusion of Bombay high court in a case on this:
interpreting Section 2 (1) (e) the subject-matter of the arbitration has to be treated as if the same had been the subject-matter of a suit. Therefore, one could argue that Section 2 (1) (e) mandates that a petition be treated just as a suit for the purposes of interpreting the meaning of court. From such a reading as well, one could argue that a district court would be the first court of recourse and would aptly exercise jurisdiction.
34 Application for setting aside arbitral award. —
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if—
(a) the party making the application furnishes proof that—
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.