Omprakash And Others v. Vijay Dwarkada Varma .

5. The petitioners and the respondent entered into a Partnership Deed on 01/04/1997 and clause 13 of the said Deed was the arbitration clause providing for resolution of disputes between the parties by way of arbitration. As disputes arose between the parties, the respondent filed an application under section 11 of the said Act before this Court for appointment of an arbitrator. The said application was allowed and a former Judge of this Court was appointed as an arbitrator to resolve the dispute between the parties. Pursuant to the said order dated 06/05/2016 passed by this Court, the learned sole arbitrator initiated the proceedings. It is undisputed that the entire arbitration proceedings took place at Nagpur and that award was pronounced and signed by the learned arbitrator at Nagpur on 27/06/2018.

6. Aggrieved by the said award, the petitioners filed the said application under section 34 of the Act before the Court below at Malkapur, which was registered as M.J.C. No.6 of 2018. In this application, the respondent raised an objection of jurisdiction and filed an application at Exhibit-11 praying for rejection of the aforesaid application filed under section 34 of the

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said Act, as being untenable before the Court below at Malkapur and alternatively requested the Court below that the petitioners may be relegated to the proper Court in the interest of justice. This application was opposed by the petitioners.

7. By the impugned order dated 20/03/2019, the Court below allowed the application at Exhibit 11 and found that the Court below at Malkapur did not have jurisdiction to entertain the application under section 34 of the said Act, because the place/seat of arbitration was at Nagpur and the award was pronounced and signed by the learned arbitrator at Nagpur. Consequently, the application under section 34 of the said Act was dismissed for want of jurisdiction. Aggrieved by the same, the petitioners filed this writ petition.

8. Mr.C.S.Kaptan, learned senior counsel appearing with Mr. M. G. Sarda, learned counsel for the petitioners, submitted that the impugned order passed by the Court below was unsustainable, because it was not in consonance with the law laid down by the Hon'ble Supreme Court in various judgments concerning the concept of place/seat and venue of arbitration. It was contended that in the present case neither did the arbitration

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clause specify the place/seat of arbitration nor did this Court while allowing the application under section 11 of the said Act and appointing the arbitrator, specify the place or seat of arbitration. In this context, the learned senior counsel invited attention of this Court to section 20 of the said Act, which pertains to place of arbitration and by placing emphasis on sub-section (2) thereof, it was submitted that in the facts of the present case, the learned arbitrator was expected to determine the place of arbitration. In the absence of any such specific determination of place of arbitration by the learned arbitrator, according to the learned senior counsel, Nagpur could not be said to be the place or seat of arbitration, although the arbitration proceedings did take place at Nagpur and the award was pronounced and signed at Nagpur. By relying upon section 2(e) of the said Act, which defines "Court", it was submitted that the Court below at Malkapur clearly had jurisdiction to entertain the application under section 34 of the said Act and that therefore, the impugned order deserved to be set aside. The learned senior counsel further relied upon section 31(4) of the said Act to contend that the arbitral award is expected to state the date and place of arbitration as determined in accordance with section 20 of the said Act and only then the

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award can be deemed to have been made at that place. It was submitted that since there was no determination of the place of arbitration, the Courts at Nagpur could not have jurisdiction in the matter. Attention of this Court was then invited to section 42 of the said Act, which pertains to jurisdiction and it was submitted that when the application under section 34 of the said Act was filed by the petitioners before the Court below at Malkapur and since it was the first application filed in respect of the arbitration agreement, the Court below at Malkapur alone had jurisdiction to entertain the application filed by the petitioners.

9. The learned senior counsel appearing for the petitioners relied upon the judgment of the Hon'ble Supreme Court in the case of Videocon Industries Ltd. v. Union of India, reported in (2011) 6 SCC 161 to contend that in the absence of specification of a place of arbitration in the arbitration clause in the present case, merely because the arbitration proceedings took place at Nagpur would not mean that the place of arbitration was determined, as contemplated under section 20 of the said Act. The learned senior counsel appearing for the petitioners then invited attention to various paragraphs of the Constitution Bench

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judgment of the Hon'ble Supreme Court in the case of Bharat Aluminum Co. v. Kaiser Aluminium Technical Services Inc., reported in (2012) 9 SCC 552 (hereinafter referred to as "BALCO judgment"), to contend that the Courts at Malkapur as well as Nagpur had jurisdiction to entertain application under section 34 of the said Act. Particular emphasis was placed on para-96 of the said BALCO judgment, because section 2(e) of the said Act pertaining to definition of 'Court' was quoted therein and it was categorically stated that the Court within whose jurisdiction subject matter of a suit was situated as well as the Court within whose jurisdiction the arbitration took place, would have jurisdiction to entertain such an application. The learned senior counsel for the petitioners also placed reliance on judgment of the Hon'ble Supreme Court in the case of Union of India v. Hardy Exploration & Production (India) Inc., reported in (2019) 13 SCC 472 (hereinafter referred to as "Hardy judgment"). Reliance was placed on paras-32 to 35 of the said judgment in support of the contentions raised on behalf of the petitioners. On this basis, it was submitted that the writ petition deserved to be allowed.

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10. On the other hand, Mr. S. N. Bhattad, learned counsel appearing for the respondent submitted that the contentions raised on behalf of the petitioners were not sustainable and all the questions sought to be raised on their behalf stood answered against them in the latest judgment of the Hon'ble Supreme Court in the case of Bgs Sgs Soma Jv v. Nhpc Limited ., reported in (2019) SCC OnLine SC 1585 (hereinafter referred to as "SOMA JV judgment"). The said judgment demonstrated that the Court below had not committed any error in dismissing the application of the petitioners filed under section 34 of the said Act. It was submitted that since the place or seat of arbitration in the present case was undeniably at Nagpur and the award was pronounced and signed at Nagpur, the Court below at Malkapur did not have jurisdiction to entertain the application under section 34 of the said Act. It was submitted that therefore, the writ petition deserved to be dismissed.

11. Heard learned counsel for the rival parties and perused the material on record, including the judgments of the Hon'ble Supreme Court on which the rival parties placed reliance. Before adverting to the facts of the present case, in order to

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examine as to whether the impugned order deserves interference, it would be appropriate to appreciate the position of law with regard to place or seat of arbitration and its consequent impact on jurisdiction of Courts, in the light of the aforesaid judgments and relevant provisions of the aforesaid Act.

12. Section 2(e) of the said Act reads as follows.

"2. Definitions. - (1) In this Part, unless the context otherwise requires, -

(a)……

(b)…...

(c)…...

(d)…..

[(e) "Court" means—

(i) in the case of an arbitration other than international commercial arbitration, 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;

(ii) in the case of international commercial arbitration, 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, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;]"

13. A plain reading of the aforesaid provision would indicate that the principal Civil Court of original jurisdiction in a

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district would be the Court having jurisdiction to decide the question forming subject matter of the arbitration if the same had been the subject matter of the suit. In the context of the manner in which law has developed over a period of time, the aforesaid provision has lost its plain meaning and it has been read with section 20 of the said Act. Section 20 of the said Act reads as follows.

"20. Place of arbitration.- (1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property."

14. As per the said provision, the parties to an arbitration agreement are free to agree on the place of arbitration. Sub- section (2) of section 20 of the said Act provides that if there is failure to reach an agreement, the place of arbitration shall be determined by the arbitral tribunal and sub-section (3) thereof specifically states that notwithstanding the agreement of the parties to a place of arbitration or its determination by an arbitral

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tribunal, such a tribunal may meet at any place it considers appropriate. The said provision in its operation thus clearly indicates that while sub-sections (1) and (2) of section 20 of the said Act pertain to place of arbitration, sub-section (3) thereof pertains to a venue.

15. Section 31(4) of the said Act reads as follows.

"31. Form and contents of arbitral award. - (1)…. (2)….

(3)….

(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place."

16. The said provision requires that an arbitral award shall state its place of arbitration as determined in accordance with section 20 of the said Act and the award shall be deemed to have been made at that place.

17. Section 42 of the said Act reads as follows.

"42. Jurisdiction.- Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court."

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18. The said provision indicates that when any application is made under Part-I of the said Act in a Court, that Court alone shall have jurisdiction for the arbitration proceedings and that all subsequent applications shall be made in that Court alone.

19. All the above referred provisions were taken into account by Constitution Bench of the Hon'ble Supreme Court in the BALCO judgment. After having discussed various aspects of the matter in detail, it was held in the BALCO judgment that it was a facet of public policy that only one Court should have jurisdiction to set aside an arbitral award. It was specifically held that to accept that two Courts would have concurrent jurisdiction in such matters i.e. the Court where the cause of action was located and the Court where the arbitration took place would lead to risk of conflicting decisions. Yet, it was submitted on behalf of petitioners that the Court below at Malkapur did have jurisdiction to entertain the application under section 34 of the aforesaid Act, even if it could be said that the Courts at Nagpur would also have jurisdiction, as the arbitration took place and the award was signed and pronounced at Nagpur. This aspect regarding which Court would have jurisdiction to entertain such an application

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came up for consideration before the Hon'ble Supreme Court in the case of Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., reported in (2017) 7 SCC 678. In the said judgment, after taking into consideration the ratio of the BALCO judgment, it was held as follows.

"19. A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of CPC be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties."

20. A similar issue then arose before a Bench of Three Hon'ble Judges of the Hon'ble Supreme Court, wherein the Hardy judgment was delivered. In this judgment, much emphasis was placed by the Hon'ble Supreme Court on the word

"determination" as used in section 20 of the aforesaid Act. On the basis of the facts of the said case, it was held that since there was no adjudication and expression of opinion about place of arbitration, the word "place" could not be used as a seat and that a

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"venue" could become seat if something else was added to it as concomitant. This judgment was specifically relied upon by the learned senior counsel appearing for the petitioners to contend that in the absence of determination of the place of arbitration in the present case, merely because arbitration proceedings took place at Nagpur, it could not be said that only the Courts at Nagpur would have jurisdiction to entertain an application under section 34 of the said Act.

21. Thereafter, a Bench of Three Hon'ble Judges of the Hon'ble Supreme Court delivered Soma JV judgment. In this judgment, various judgments of the Hon'ble Supreme Court, including BALCO judgment and Hardy judgment were taken into consideration. The Hon'ble Supreme Court also referred to all the relevant provisions of the said Act and particularly discussed the effect of aforesaid para-96 of the BALCO judgment as it appeared to the Hon'ble Supreme Court in the Soma JV judgment that the said paragraph was not in harmony with the other paragraphs of the BALCO judgment. It was held that a judgment could not be considered as a statute and that observations made by Courts were to be read in the context in which they were made and

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further it was stated that "Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes."

22. After taking into consideration the BALCO judgment in its entirety, it was held in Soma JV judgment as follows.

"46. If paragraphs 75, 76, 96, 110, 116, 123 and 194 of BALCO (supra) are to be read together, what becomes clear is that Section 2(1)(e)has to be construed keeping in view Section 20 of the Arbitration Act, 1996, which gives recognition to party autonomy - the Arbitration Act, 1996 having accepted the territoriality principle in Section 2(2) following the UNCITRAL Model Law. The narrow construction of Section 2(1)(e) was expressly rejected by the Five Judge bench in BALCO (supra). This being so, what has then to be seen is what is the effect Section 20 would have on Section 2(1)(e) of the Arbitration Act, 1996.

47. It was not until this Court's judgment in Indus Mobile Distribution Private Limited (supra) that the provisions of Section 20 were properly analysed in the light of the 246 ^th Report of the Law Commission of India titled, 'Amendments to the Arbitration and Conciliation Act, 1996' (August, 2014) (hereinafter referred to as the "Law Commission Report, 2014"), under which Section 20(1) and (2) would refer to the the "seat" of the arbitration, and Sectin 20(3) would refer only to the "venue" of the arbitration. Given the fact that when parties, either by agreement or, in default of there being an agreement, where the arbitral tribunal determines a particular place as the seat of the arbitration under Section 31(4) of the Arbitration Act, 1996, it becomes clear that the parties having chosen the seat, or the arbitral tribunal having determined the seat, have also chosen the Courts at the seat for the purpose of interim orders and challenges to the award."

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23. In the Soma JV judgment, the Hon'ble Supreme Court relied upon and reiterated the Shashoua principle laid down in the case of Shashoua v. Sharma, reported in 2009 (2) Llyods Law Reporter, 326, wherein it was laid down that an agreement as to the seat of arbitration was analogous to an exclusive jurisdiction clause. The Hon'ble Supreme Court held that once the parties agreed to a place of an arbitration, it amounted to foisting jurisdiction on the Court which exercised jurisdiction qua the place of arbitration and excluded jurisdiction of all other Courts. The contrary view taken by the Delhi High Court in the case of Antrix Corporation Ltd. v. Devas Multimedia Pvt. Ltd., reported in 2018 SCC OnLine Del 9338 was disapproved in the Soma JV judgment of the Hon'ble Supreme Court. Even in respect of Hardy Judgment delivered by Three Hon'ble Judge of the Hon'ble Supreme Court, in Soma JV judgment, it was held as follows.

94. The Three Judge Bench in Hardy Exploration and Production (India) Inc (supra) failed to apply the Shashoua principle to the arbitration clause in question. Had the Shashoua principle been applied, the answer would have been that Kuala Lumpur, which was stated to be the "venue" of arbitration proceedings, being governed by the UNCITRAL Model Law, would be governed by a supranational set of rules, and there being no other contrary indicator, it would be clear that Kuala Lumpur would therefore be the juridical

"seat" of the arbitration.

95. As we have seen hereinabove, the judgment of Cooke, J. in Roger Shashoua and Ors. v. Mukesh Sharma,

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was expressly approved by the 5-Judge Bench in BALCO (supra), as was stated by the Supreme Court of India in Roger Shashoua and Ors. v. Mukesh Sharma. By failing to apply the Shashoua principle to the arbitration clause in question, the Three Judge Bench in Hardy Exploration and Production (India) Inc (supra) has not followed the law as to determination of a "juridical seat", laid down by a Five Judge Bench of this Court in BALCO (supra). The result in Hardy Exploration and Production (India) Inc (supra) is that a foreign award that would be delivered in Kuala Lumpur, would now be liable to be challenged in the Courts at Kuala Lumpur, and also be challenged in the courts in India, under Section 34 of Part I of the Arbitration Act, 1996. This is exactly the situation that this Court encountered when it decided the case of Venture Global Engineering v. Satyam Computer Services Ltd. & Anr., (2008) 4 SCC 190. The Five Judge Bench in BALCO (supra) expressly overruled Venture Global Engineering (supra) as follows:

"143…With these observations, the matter was remanded back to the trial court to dispose of the suit on merits. The submissions made by K.K. Venugopal, as noticed in para 42, epitomise the kind of chaos which would be created by two court systems, in two different countries, exercising concurrent jurisdiction over the same dispute. There would be a clear risk of conflicting decisions. This would add to the problems relating to enforcement of such decisions. Such a situation would undermine the policy underlying the New York Convention or the UNCITRAL Model Law. Therefore, we are of the opinion that appropriate manner to interpret the aforesaid provision is that "alternative two" will become available only if "alternative one" is not available. xxx xxx xxx

"154. At this stage, we may notice that in spite of the aforesaid international understanding of the second limb of Article V(1)(e), this Court has proceeded on a number of occasions to annul an award on the basis that parties had chosen Indian law to govern the substance of their dispute. The aforesaid view has been expressed in Bhatia International [(2002) 4 SCC 105] and Venture Global Engg. [(2008) 4 SCC 190] In our opinion, accepting such an interpretation would be to ignore the spirit underlying the New York Convention which embodies a consensus evolved to encourage consensual resolution of complicated, intricate and in many cases very sensitive international commercial disputes. Therefore, the interpretation which hinders such a process ought not to be accepted. This also seems to be the view of the national courts in different jurisdictions across the world. For the reasons stated

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above, we are also unable to agree with the conclusions recorded by this Court in Venture Global Engg. [(2008)

4 SCC 190] that the foreign award could be annulled on the exclusive grounds that the Indian law governed the substance of the dispute. Such an opinion is not borne out by the huge body of judicial precedents in different jurisdictions of the world."

97. The decision in Hardy Exploration and Production (India) Inc. (supra) is therefore contrary to the Five Judge Bench in BALCO (supra), in that it failed to apply the Shashoua principle to the arbitration clause in question. The Hardy Exploration and Production (India) Inc. (supra) decision would lead to the result that a foreign award would not only be subject to challenge in the country in which it was made, but also subject to challenge under Section 34 of Part I of the Arbitration Act, 1996, which would lead to the chaos spoken of in paragraph 143 of BALCO (supra), with the concomitant risk of conflicting decisions, as held in Venture Global Engineering (supra) [overruled in BALCO (supra)], which would add to problems relating to enforcement, and undermine the policy underlying the New York Convention and the UNCITRAL Model Law. We, therefore, declare that the judgment in Hardy Exploration and Production (India) Inc. (supra), being contrary to the Five Judge Bench in BALCO (supra), cannot be considered to be good law."

In the context of sections 20 and 42 of the said Act, the Hon'ble Supreme Court in Soma JV judgment held as follows.

"62. Equally incorrect is the finding in Antrix Corporation Ltd. (supra) that Section 42 of the Arbitration Act, 1996 would be rendered ineffective and useless. Section 42 is meant to avoid conflicts in jurisdiction of Courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one Court exclusively. This is why the section begins with a non- obstante clause, and then goes on to state "…where with respect to an arbitration agreement any application under this Part has been made in a Court…" It is obvious that the application made under this part to a Court must be a Court which has jurisdiction to decide such application. The subsequent holdings of this Court, that where a seat is designated in an agreement, the Courts of the seat alone have jurisdiction, would require that all applications under Part I be made only in the Court where the seat is located, and that Court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered ineffective or useless. Also, where it is found on the facts of a particular

18

case that either no "seat" is designated by agreement, or the so-called "seat" is only a convenient "venue", then there may be several Courts where a part of the cause of action arises that may have jurisdiction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a case where parties have not agreed on the "seat" of arbitration, and before such "seat" may have been determined, on the facts of a particular case, by the Arbitral Tribunal under Section 20(2) of the Arbitration Act, 1996. In both these situations, the earliest application having been made to a Court in which a part of the cause of action arises would then be the exclusive Court under Section 42, which would have control over the arbitral proceedings. For all these reasons, the law stated by the Bombay and Delhi High Courts in this regard is incorrect and is overruled. Para-64 of the Soma JV judgment is also relevant and it reads as follows.

"64. It will thus be seen that wherever there is an express designation of a "venue", and no designation of any alternative place as the "seat", combined with a supranational body of rules governing the arbitration, and no other significant contrary indicia, the inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding."

24. The aforesaid observations were made by the Hon'ble Supreme Court in the Soma JV judgment in the backdrop of the fact that the parties in the said case had agreed that the arbitration proceedings would be held at New Delhi or Faridabad. The arbitration proceedings took place at New Delhi and the arbitral tribunal rendered its award at New Delhi. But, the aggrieved party therein filed application under section 34 of the said Act for setting aside the award before the District Court at Faridabad. An objection was raised by the contesting party on the basis that since

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the place of arbitration was at New Delhi, the application ought to be returned to be presented before the Competent Court at New Delhi. This objection was accepted and the application was returned. The said order of the District Court at Faridabad was challenged before the High Court of Punjab and Haryana. The appeal filed under section 37 of the said Act was allowed by the High Court and it was held that New Delhi was a venue of the arbitration proceedings and not the seat of arbitration. The said order was subject matter of challenge before the Hon'ble Supreme Court, wherein the appeal was allowed and the order of the District Court at Faridabad was restored by holding that New Delhi was the place of arbitration and not merely a venue.

25. The learned senior counsel appearing for the petitioners in the present case sought to distinguish the Soma JV judgment of the Hon'ble Supreme Court on the basis that in the said case, the arbitration agreement specifically named two places i.e. Faridabad and New Delhi where the arbitration could take place. It was submitted that in the present case, no such place was specified in the arbitration clause, this Court did not specify the place of arbitration while passing order on the application

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under section 11 of the said Act appointing the arbitrator and even the arbitrator never "determined" the place of arbitration before conducting the arbitration proceedings at Nagpur. On this basis, the Soma JV judgment of the Hon'ble Supreme Court was sought to be distinguished and it was submitted that when there was no determination of the place of arbitration, even if the arbitration proceedings took place at Nagpur and the award was indeed signed and pronounced at Nagpur, in terms of the provisions of the said Act, particularly section 20 thereof, it could not be said that Nagpur was indeed the place of arbitration in the present case. In support of the said submission, much reliance was placed on observations made by the Hon'ble Supreme Court in the Hardy judgment, wherein it was stated that "determination" required doing of a positive act. On this basis, it was submitted that when there was no material on record to show that the learned arbitrator had determined the place of arbitration, it could not be said that the place of arbitration was Nagpur in the present case.

26. The aforesaid submission made on behalf of the petitioners cannot be accepted for the simple reason that the arbitrator would have to undertake the exercise of

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"determination" only if there was failure of agreement between the parties on the place of arbitration or that there was a dispute or controversy between the parties on the said question. Merely, because there was no specific place of arbitration specified in the arbitration clause in the present case, it did not follow that the learned arbitrator was first required to determine the place of arbitration and in the absence of such exercise, the place where the arbitration proceedings actually took place and the award was rendered could not be said to be the place of arbitration under section 20 of the aforesaid Act. Sub-section (1) of section 20 of the said Act specifies that the parties are free to agree on the place of arbitration. This does not mean that the place of arbitration must necessarily be specified only in the arbitration clause. The parties could clearly agree to a place of arbitration even in the absence of such a place being specified in the arbitration clause. This could be ascertained from the conduct of the parties also. In the present case, it is an admitted position that there was no dispute or controversy between the parties as regards Nagpur being the place of arbitration. Both parties appeared before the learned arbitrator appointed by this Court, at Nagpur and when the proceedings were initiated before the learned Arbitrator at

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Nagpur, neither of the parties raised any objection or dispute or controversy with regard to the place of arbitration being Nagpur.

27. It was not as if the arbitration proceedings were initiated at Nagpur and later on they were conducted at other places and eventually the arbitration award was signed and pronounced at Nagpur. Admittedly, the entire arbitration proceedings, pursuant to appointment of arbitrator by this Court, took place at Nagpur, without any objection being raised by either party and the award was pronounced and signed at Nagpur. Therefore, in the facts of the present case, sub-section (1) of section 20 of the said Act squarely applies, thereby showing that the parties agreed to Nagpur as place of arbitration. Therefore, there is no substance in the said contention raised on behalf of the petitioners for distinguishing this case from the law laid down in the BALCO judgment, further clarified in the latest judgment i.e. the Soma JV judgment.

28. Once this conclusion is arrived at, it becomes clear that when the place of arbitration was Nagpur, it operated as a clause of exclusive jurisdiction in Courts at Nagpur. As per the law laid down in the BALCO judgment by the Constitution Bench of

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the Hon'ble Supreme Court, there can be only one Court having jurisdiction to annul an award. The contention raised on behalf of the petitioners in the context of section 42 of the said Act stands answered by the above quoted para-62 of the Soma JV judgment and, therefore, it cannot be said that since the petitioners had filed application under section 34 of the said Act before the Court at Malkapur and it was the first such application filed under Part-I of the said Act, only the Court at Malkapur would have jurisdiction. As noted above, once the place of arbitration is conclusively established as Nagpur, only the Courts at Nagpur would have jurisdiction to exercise supervisory powers and to entertain any application in respect of the arbitration proceedings.

29. Therefore, it cannot be said that the Court below committed an error in holding that it had no jurisdiction in the matter. The contentions raised on behalf of the respondent were correctly accepted by the Court below while passing the impugned order.

30. But, at the same time, having held in favour of the respondent, the Court below ought not to have dismissed the application filed by the petitioners under section 34 of the said

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Act, without making any further observations. A perusal of the application at Exhibit-11 filed on behalf of the respondent would show that it was prayed that the petitioners may be relegated to the proper Court. In such circumstances, the proper thing to do was to have returned the application filed by the petitioners before the Court below at Malkapur, to be filed before the appropriate Court. In fact, even in the Soma JV judgment, the Hon'ble Supreme Court upheld the order of the District Court whereby a similar application filed under section 34 of the said Act was returned for presentation before the appropriate Court.

31. In this Context, there is no substance in the contention raised on behalf of the respondent that since he had prayed for dismissal of the application filed by the petitioners under section 34 of the said Act, as the Court below at Malkapur had no jurisdiction, the Court below could have only dismissed the application and power akin to that under Order VII Rule 10 of the Civil Procedure Code could not have been exercised in the facts and circumstances of the present case. This Court disagrees with the said submission raised on behalf of the respondent.

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32. Therefore, the present writ petition is disposed of by holding that there was no error committed by the Court below while passing the impugned order, holding that it had no jurisdiction to entertain the application under section 34 of the said Act.

33. Yet, the outright dismissal of the application of the petitioners was not appropriate. Accordingly, while upholding the reasoning of the impugned order passed by the Court below at Malkapur, the operative portion is modified and it is directed that the application at Exhibit-1 filed by the petitioners before the Court below at Malkapur shall be returned to the petitioners, to be presented before the Competent Court at Nagpur. The contentions available to the rival parties, except the question of jurisdiction are kept open to be raised before the Competent Court at Nagpur.

34. Rule accordingly. No costs.

JUDGE

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