Full Judgment
Oral Judgment:
By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996, petitioner seeks to challenge the award dated 6th September, 2011 declared by the Arbitral Tribunal allowing the part of the claims made by the respondents and rejecting the substantial part of the claim of the petitioner.
2. Mr. Sancheti, the learned senior counsel appearing on behalf of the respondents raised preliminary issue about territorial jurisdiction of this court in entertaining this petition on the ground that no cause of action has arisen within the territorial jurisdiction of this court.
3. In this background, I will refer to refer to some of the admitted facts emerging from the petition which are summarized as under :
(a) The Petitioners are engaged in the business of manufacturing colour television glass shells used for picture tubes and have set up a plant for manufacturing the same at Chavaj, near Bharuch, Gujarat. The Petitioners decided to expand their production capacities by setting up additional manufacturing line viz. "C" line Panel Project (Phase II). The petitioners issued letter of intent in favour of the respondents for the said work on 1st September, 2004. The dispute arose between the parties in respect of the said work awarded to the respondents by the petitioners for carrying out civil and structural works at Bharuch which was referred to arbitration. The arbitral tribunal by award dated 6th September, 2011 delivered at Mumbai allowed the part of the claims made by respondents and rejected the substantial part of the counter claim made by the petitioners. The petitioners have impugned the said award delivered at Mumbai. In Para 35 of the petition, it is stated that the impugned award is passed at Mumbai and therefore, this court has jurisdiction to try and entertain the present petition and grant reliefs prayed for therein. In the cause title of the petition, the registered office of the respondents is shown at A-104, Shapath-4, S.G. Highway, Ahmedabad 380 051.
(b) Based on these facts, the learned senior counsel Mr. Sancheti, appearing on behalf of the respondents submits that the entire cause of action had arisen outside Greater Mumbai. The respondents are admittedly having its registered office at Ahmedabad. The work was executed at Gujarat. Merely because the arbitration award is delivered at Mumbai, does not confer jurisdiction on this court. The learned senior counsel has placed reliance on section 2(1)(e) of the Arbitration and Conciliation Act, 1996 which reads as under:
"Section 2 - Definitions
(1) In this Part, unless the context otherwise requires,-
(a) ...
(b) ...
(c) ...
(d) ...
(e) "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;"
(c) It is submitted that if the respondents in respect of the claims made before the arbitral tribunal and if the petitioners in respect of the counter claims were required to file a suit, the same could not have been filed in this court as no part of cause of action had arisen within the territorial jurisdiction of this court. It is submitted that situs of arbitration did not confer jurisdiction in the court. It is submitted that while considering the question of territorial jurisdiction, it is necessary to consider the competency of the court for deciding the subject matter of the dispute and the suit if filed, if no arbitration agreement exist.
4. On conjoint reading of section 2(1)(e) with section 34 of the Arbitration and Conciliation Act,1996, it is clear that the expression "recourse to court against arbitral award" mentioned in section 34 read with section 2(1)(e) would mean that only such court having jurisdiction to decide the questions forming the subject matter of arbitration if the same have been subject matter of the suit, would have jurisdiction to entertain such petition. In view of the admitted fact that the contract was awarded to the respondent outside the jurisdiction of this court and the work was carried out at Bharuch, Gujarat, the respondents were having their registered office at Ahmedabad, no cause of action has arisen within the jurisdiction of this court, as defined under section 2(1)(e) of the Act. If the respondents who were the original claimants before the arbitral tribunal were required to file a suit if there was no arbitration cause, such suit could not have been filed within the jurisdiction of this court and thus petition under section 34 could not have been filed in this court merely on the ground that arbitration award was delivered at Mumbai. In my view, the situs of arbitration or that the award was made at particular place would not be relevant for conferring jurisdiction. It is only subject matter of the arbitration construed in the manner as if the arbitration proceeding was such that it would be determinative of the court having jurisdiction to entertain and hear the petition under section 34 of the Arbitration and Conciliation Act, 1996.
5. I am therefore, of the view that the learned senior counsel Mr. Sancheti is right in raising the preliminary objection that this court has no jurisdiction to entertain this petition, which I am inclined to accept. I am not inclined to accept the submission of Mr. Soni, learned counsel for the petitioners that the arbitration proceedings were conducted and the award was delivered at Mumbai and thus this court would have jurisdiction to entertain this petition.
6. I, therefore, pass the following order :
As this court has no jurisdiction to entertain, try and dispose of the petition, the petition is directed to be returned to the petitioner for presentation in appropriate court and is ordered accordingly. There shall be no order as to costs.