Bar U/S 42 Of Arbitration Act Not Attracted Where Seat Is Chosen Before First Application Is Filed: Calcutta High Court

The Calcutta High Court has held that where parties have already chosen a seat of arbitration before the first application is filed, the courts exercising jurisdiction over the seat alone will have jurisdiction over all subsequent applications, including those under sections 34 and 36 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") notwithstanding that earlier application may have been filed before another High Court. Justice Sabyasachi Bhattacharyya held while deciding the issue of maintainability in proceedings between Kessels Engineering Works Pvt. Ltd. and Neo Metaliks Limited. The arbitral award was sought to be challenged and enforced through applications under sections 34 and 36 before the Calcutta High Court. During arguments, the court raised a preliminary issue of maintainability in view of section 42 as an earlier application under section 14 had been filed and decided by the Delhi High Court. The arbitration agreement provided Delhi or Kolkata as the seat of arbitration. It was undisputed that multiple sitting of the proceedings had taken place in Kolkata and that prior to filing of the application under section 14, both parties had expressed their choice to designate Kolkata as the seat of arbitration. The award holder argued that section 42 would not apply to enforcement proceedings under section 36. The court referred to the Supreme Court's judgment in BGS SGS SOMA JV, from which three principles were culled out. Firstly, in case no seat is chosen by the parties, the court where the first application is filed will have exclusive jurisdiction. Secondly, where the seat is chosen after the first application is filed, still Section 42 applies and the court where the first application is filed retains the exclusive jurisdiction. Lastly, in case the seat is chosen before the first application is filed, the courts exercising jurisdiction over such a seat alone will have jurisdiction, irrespective of the fact where the first application was filed. Based on the above, the court observed that the present case falls under the third category since the parties had crystallised Kolkata as the seat of arbitration even before the application under section 14 was filed before the Delhi High Court. “Already, prior to the first application being filed before Delhi High Court under Section 14 of the 1996 Act, multiple sittings of the arbitration proceeding had taken place in Kolkata and the parties had expressed their choice of seat to be Kolkata. Thus, the third proposition enumerated in BGS SGS SOMA JV (supra) would apply and it is the courts at Kolkata which would have jurisdiction. Although the first application was filed before the Delhi High Court, the same was not a court of competent jurisdiction for the purpose of attracting Section 42 of the 1996 Act.”, the court held. Consequently, the court ruled, the Delhi High Court was not a competent court of jurisdiction for the purpose of section 42. While expressing doubt on the ratio laid down in Sundaram Finance that section 42 will not apply to enforcement proceedings under section 36, the court held that section 42 is broad enough to cover applications arising out of arbitral proceedings which will include both sections 34 and 36 even after termination of arbitrator's mandate under section 32. Accordingly, the court decided in favor of the applicants holding that the Calcutta High Court had jurisdiction to entertain both applications under sections 34 and 36 of the Arbitration Act. Case Title: Kessels Engineering Works Pvt. Ltd. Vs Neo Metalicks Limited Case Number: AP-COM/245/2024 IA NO: GA/1/2022 Order Date: 19/12/2025 Mr. Pradeep Chhindra, Adv.(via VC) Mr. Pratik Ghose, Adv. Mr. Avishek Roy Chowdhury, Adv. …for Petitioner/Kessels Engineering. Mr. Pranit Bag, Adv. Mr. Dhruv Chadha, Adv. Mr. Sidhartha Sharma, Adv. Mr. Rishav Dutt, Adv. Ms. Patrali Ganguly, Adv. ..for Neo Metaliks. Click Here To Read/Download Order

Bar U/S 42 Of Arbitration Act Not Attracted Where Seat Is Chosen Before First Application Is Filed: Calcutta High Court

Mohd Malik Chauhan

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