Appeal U/S 37 Of Arbitration Act Not Maintainable Against Order Under O.VII R.10 CPC: Punjab And Haryana High Court

The Punjab and Haryana High Court bench comprising of Justice Arun Palli and Justice Vikram Aggarwal has held that an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 Act read with Section 13(1) of the Commercial Courts Act, 2015 is not maintainable against an order passed under Order VII Rule 10 of the CPC directing the return of a petition filed under Section 34 of the 1996 Act for presentation to the appropriate court. Brief Facts: The appellant, M/s Parsvnath Developers Limited, entered into a collaboration agreement on 27.10.2005 with the respondents, who were owners of land in Village Dharuhera, District Rewari. The agreement was for developing the land into a residential colony. Disputes emerged between the parties. The respondents filed a petition under Section 11(6) of the 1996 Act. Justice R.M. Lodha was appointed as the sole arbitrator on 05.02.2016. The arbitration proceedings were conducted in Delhi. The award was passed on 21.09.2020. A petition under Section 34 of the 1996 Act was preferred by the appellant in the Court at Rewari. The ground raised in the application was that since all proceedings had been conducted in Delhi, the jurisdiction to entertain and decide a section 34 petition would be with the Courts in Delhi and not with the Courts at Rewari. This stand was accepted by the District Judge, Rewari. In the impugned order dated 06.08.2022, the application preferred by the respondents under Order VII Rule 10 read with section 151 of the CPC, 1908 read with section 2(1)(e)(i) of 1996 Act, seeking the return of the objection petition preferred by the appellant under Section 34 of the 1996 Act was allowed and the section 34 petition was ordered to be returned for being presented in the competent Court. The Appellant assailed the impugned order. Submissions: Mr. Puneet Bali, Senior Counsel for the Appellant submitted that the impugned order is not sustainable, for it had misinterpreted the judgment of the Supreme Court in the case of BGS SGS Soma JV vs. NHPC Limited. He stated that the 'contrary indicia' as referred to in the said judgment is the jurisdiction clause in the Collaboration Agreement and, therefore, the “venue” of Arbitration will not be taken to be the “seat” of Arbitration. In view of the jurisdiction clause, the 'seat' of the Arbitrator would be at Rewari and, therefore, the petition under Section 34 would have to be filed at Rewari. He submitted that Delhi was merely the 'venue' of Arbitration and in view of the exclusive jurisdiction clause, the 'venue' of Arbitration would not be taken to be the 'seat' of Arbitration. Where both the 'venue' and the jurisdictional 'seat' are mentioned separately, 'venue' is only for convenience. If the 'venue' is taken to be the 'seat', Section 34 would become null and void. Per contra, Mr. Siddharth Yadav, Senior Counsel for the Respondents submitted that since the entire arbitration proceedings were carried out in Delhi, the petition under Section 34 of the 1996 Act would have to be filed at Delhi alone, and the Courts at Rewari would not have any jurisdiction to deal with the said petition. He further submitted that the word 'exclusive' had not been mentioned in the jurisdiction clause. Under the circumstances, the 'venue' of arbitration would precede even the jurisdiction clause. Observations: On the issue of maintainability, the court relied upon BGS SGS Soma JV, where the Supreme Court held that an appeal under Section 37 of the 1996 Act read with Section 13(1) of the Commercial Courts Act, 2015 is not maintainable against an order passed under Order VII Rule 10 of the CPC directing the return of a petition filed under Section 34 of the 1996 Act for presentation to the appropriate court. The court thus dismissed the appeal as not maintainable. Case Title: Parsvnath Developers Limited vs. Brig. Devendra Singh Yadav and others Case Number: FAO-CARB-28-2022(O&M) For Appellant: Mr. Puneet Bali, Senior Advocate with Ms. Bhagyashri Setia, Advocate, Mr. Rajat Joneja, Advocate and Mr. Tarun Khaira, Advocate For Respondent: Mr. Siddharth Yadav, Senior Advocate with Mr. Manav Bajaj, Advocate, and Mr. Narender, Advocate Date of Judgment: 20.01.2025Click Here To Read/Download The Order

Appeal U/S 37 Of Arbitration Act Not Maintainable Against Order Under O.VII R.10 CPC: Punjab And Haryana High Court

Tazeen Ahmed

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