First Court Holds Exclusive Jurisdiction Over Subsequent Arbitral Proceedings Under S.40 Of Arbitration & Conciliation Act: J&K High Court
Clarifying the scope of Section 42 of the Arbitration and Conciliation Act, 1996 the Jammu and Kashmir and Ladakh High Court has ruled that once an application concerning an arbitration agreement under Part I of the Act has been submitted before a court, that court exclusively possesses jurisdiction over all ensuing arbitral proceedings and related applications.A bench comprising Justice...
Clarifying the scope of Section 42 of the Arbitration and Conciliation Act, 1996 the Jammu and Kashmir and Ladakh High Court has ruled that once an application concerning an arbitration agreement under Part I of the Act has been submitted before a court, that court exclusively possesses jurisdiction over all ensuing arbitral proceedings and related applications.
A bench comprising Justice Sanjay Dhar made these observations while hearing a plea in terms of which the petitioners had invoked supervisory jurisdiction of the Court in challenging execution proceedings initiated against them by the respondent before the Court of Additional District Judge, Sopore.
The case involved a dispute between petitioners Abdul Qadır Bhat and another and M/S Shri Ram Transport Finance Co. Ltd regarding a vehicle purchase agreement. The dispute was referred to arbitration, and the arbitrator ruled in favor of the respondent in December 2019.
The respondent subsequently filed an execution petition before the Court of Additional District Judge, Sopore, in October 2021, to enforce the arbitration award. However, in November 2021, the petitioners challenged the award before the Principal District Judge, Jammu, by filing a petition under Section 34 of the Act to set it aside.
Aggrieved of the execution petition the petitioners argued that the execution petition should have been filed before the Principal District Judge, Jammu, where they challenged the award, and that the Additional District Judge, Sopore, lacked jurisdiction.
The petitioners further contended that the arbitration award was passed ex parte without proper notice.
Adjudicating upon the matter Justice Dhar at the very outset clarified that he could not delve into the merits of the arbitration award in these proceedings as the validity of the award would be determined by the Principal District Judge, Jammu, where it was challenged.
The Court rather focused on Section 42 of the Act, which states that the court where the initial application regarding an arbitration agreement is filed will have sole jurisdiction over all subsequent applications arising from that agreement.
In this case, since the execution petition was filed before the Additional District Judge, Sopore, prior to the petitioner's challenge in Jammu, the Court ruled that Sopore maintained jurisdiction over all subsequent proceedings, including execution.
Clarifying that Section 42 of the Act applies to execution proceedings under Section 36, which falls under Part I of the Act the bench underscored,
“The execution proceedings are governed by Section 36 of the Arbitration and Conciliation Act which falls in Part I of the said enactment. Therefore, in the matters relating to jurisdiction, Section 42 of the said Act would get attracted. Thus, the contention of the petitioners that Additional District Judge, Sopore does not have jurisdiction to entertain the execution proceedings filed by the respondents, is without any merit”.
Concluding that the Additional District Judge, Sopore, had the jurisdiction to handle the execution proceedings, the court rejected the petitioners' claim and dismissed the petition for being without merit.
Case Title: ABDUL QADIR BHAT AND ANOTHER Vs M/S SHRI RAM TRANSPORT FINANCE Co.Ltd.
Citation: 2024 LiveLaw (JKL) 130
Click Here To Read/Download Judgment