Application Seeking Appointment Of Arbitrator Cannot Be Moved Before A High Court If No Part Of Cause Of Action Arose Within Its Territorial Jurisdiction: Supreme Court

The Supreme Court observed that an application under Section 11(6) of the Arbitration and Conciliation Act for the appointment of an Arbitrator/Arbitral Tribunal cannot be moved in a High Court irrespective of its territorial jurisdiction."It could never have been the intention of Section 11(6) of the A&C Act that arbitration proceedings should be initiated in any High Court in India, irrespective of whether the Respondent resided or carried on business within the jurisdiction of that High Court, and irrespective of whether any part of the cause of action arose within the jurisdiction of that Court, to put an opponent at a disadvantage and steal a march over the opponent.", the bench comprising Justices Indira Banerjee and AS Bopanna observed.The court was considering an special leave petition against an order of the Calcutta High Court, allowing an Arbitration Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. The issue raised in the appeal was whether the Calcutta High Court had jurisdiction to entertain the application when no part of the cause of action had arisen within the jurisdiction of Calcutta High Court.? In this case, the Development Agreement was admittedly executed and registered outside the jurisdiction of the High Court of Calcutta, the agreement pertains to development of property located in Muzaffarpur outside jurisdiction of the Calcutta High Court. The Appellant has its registered office in Patna outside the jurisdiction of Calcutta High Court. The Appellant has no establishment and does not carry on any business within the jurisdiction of the Calcutta High Court.The court noted that under Section 11(6), an application for appointment of an Arbitrator necessarily has to be moved in the High Court, irrespective of whether the High Court has the jurisdiction to decide a suit in respect of the subject matter of arbitration and irrespective of whether the High Court at all has original jurisdiction to entertain and decide suits." At the same time, an application under Section 11(6) of the A&C Act for appointment of an Arbitrator/Arbitral Tribunal cannot be moved in any High Court in India, irrespective of its territorial jurisdiction. Section 11(6) of the A&C Act has to be harmoniously read with Section 2(1)(e) of the A&C Act and construed to mean, a High Court which exercises superintendence/supervisory jurisdiction over a Court within the meaning of Section 2(1)(e) of the A&C Act. It could never have been the intention of Section 11(6) of the A&C Act that arbitration proceedings should be initiated in any High Court in India, irrespective of whether the Respondent resided or carried on business within the jurisdiction of that High Court, and irrespective of whether any part of the cause of action arose within the jurisdiction of that Court, to put an opponent at a disadvantage and steal a march over the opponent."The court also rejected the contention that Calcutta High Court had the territorial jurisdiction to entertain the application under Section 11(6) of the A&C Act as the seat of arbitration was Kolkata. Referring to the agreement, the bench observed:In this case, the parties, as observed above did not agree to refer their disputes to the jurisdiction of the Courts in Kolkata. It was not the intention of the parties that Kolkata should be the seat of arbitration. Kolkata was only intended to be the venue for arbitration sittings. Accordingly, the Respondent himself approached the District Court at Muzaffarpur, and not a Court in Kolkata for interim protection under Section 9 of the A&C Act. The Respondent having himself invoked the jurisdiction of the District Court at Muzaffarpur, is estopped from contending that the parties had agreed to confer exclusive jurisdiction to the Calcutta High Court to the exclusion of other Courts. Neither of the parties to the agreement construed the arbitration clause to designate Kolkata as the seat of arbitration. We are constrained to hold that Calcutta High Court inherently lacks jurisdiction to entertain the application of the Respondent under Section 11(6) of the Arbitration Act.Setting aside the High Court order, the bench appointed Justice Bhaskar Bhattacharya, former Chief Justice of the High Court of Gujarat as Sole Arbitrator.Case detailsRavi Ranjan Developers Pvt. Ltd. vs Aditya Kumar Chatterjee | 2022 LiveLaw (SC) 329 | SLP(C) 17397-17398/2021 | 24 March 2022Coram: Justices Indira Banerjee and AS BopannaCounsel: Sr. Adv Ajit Kumar Sinha for the petitioner, Sr. Adv Sanjay Ghosh for respondentHeadnotesArbitration and Conciliation Act, 1996 ; Section 11(6) and 2(1)(e) - An application under Section 11(6) of the A&C Act for appointment of an Arbitrator/Arbitral Tribunal cannot be moved in any High Court in India, irrespective of its territorial jurisdiction. Section 11(6) of the A&C Act has to be harmoniously read with Section 2(1)(e) of the A&C Act and construed to mean, a High...

Application Seeking Appointment Of Arbitrator Cannot Be Moved Before A High Court If No Part Of Cause Of Action Arose Within Its Territorial Jurisdiction: Supreme Court

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Application Seeking Appointment Of Arbitrator Cannot Be Moved Before A High Court If No Part Of Cause Of Action Arose Within Its Territorial Jurisdiction: Supreme Court

Ashok KM

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