Janardan Nirman Pvt. Ltd. v. Quippo Construction Equipment Ltd.

1. The appeal arises out of an order dated August 13, 2018 passed on a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 to challenge an arbitral award of March 24, 2015. The petition under Section 34 of the Act of 1996 has been dismissed only on the ground of jurisdiction, since the arbitral reference was apparently held in New Delhi.

2. According to the appellant, there was no arbitration agreement between the parties and, upon the appellant receiving one or more notices for an arbitral reference to be made, such notices were challenged by way of a civil suit filed before the Sealdah court. In view of Section 8 of the Act of 1996 and the general trend now of leaning towards arbitration and taking matters away from the civil court, the mere citing of the arbitration agreement resulted in the disputes in the civil suit being referred to arbitration. A special leave petition ultimately carried from the order in the Sealdah suit was disposed of on October 6, 2017 by the Supreme Court with the observation that it would be open to the appellant herein to raise the plea of the genuineness of the arbitration agreement in proceedings under Section 34 of the Act of 1996 and the court considering such plea may not be influenced by any observation in the order passed on the application under Section 8 of the Act of 1996 by the Sealdah court.

3. The appellant carried its application under Section 34 of the Act of 1996, upon an award being rendered, to the Alipore court. It appears that before such award could be challenged, a petition under Section 9 of the Act of 1996 for post-award interim measures was filed by the respondent before the Delhi High Court. Curiously, no steps appear to have been taken in such matter for more than two years and the order of January 6, 2017 passed by the Delhi High Court is eloquent in its observation that an arbitrator was appointed but there was nothing to show that the appellant herein participated in the appointment of the arbitrator. The court observed that “for all practical purposes, it appears that the appointment was unilateral and without the consent of the respondent.”

4. The Delhi High Court went on to record that no prima facie case had been made out by the respondent herein for any post-award interim measure. The petition was dismissed. It was noticed that the challenge to the award was pending in Alipore and it was also observed as follows in the ultimate paragraph of the order:

“However, this order will not have a bearing on the decision that the District Court, Alipore, West Bengal might render in the petition under Section 34 of the Act.”

5. It appears from the cause-title that the respondent herein carries on business within the jurisdiction of the Alipore court. As such, ordinarily, if a suit were to be instituted instead of an arbitral reference, such suit against the respondent, subject to pecuniary considerations, could have been instituted in the Alipore Court. However, for reasons which are not necessary to be gone into, the court below has rejected the petition under Section 34 of the Act on the ground of territorial jurisdiction.

6. It is submitted on behalf of the respondent that there were four agreements between the parties and at least one of them provided for an arbitral reference in Kolkata.

7. It is the further submission of the respondent that the order dated January 6, 2017 passed by the Delhi High Court has been challenged in appeal before that court itself. The respondent asserts that since the post-award Section 9 petition has to be regarded as the first petition pertaining to the arbitration agreement and that was filed in Delhi, only the Delhi High Court would now have authority to receive other petitions pertaining to the same arbitration agreement in view of Section 42 of the Act of 1996.

8. The Delhi High Court order of January 6, 2017 found the respondent's conduct to be mischievous both in the matter of the appointment of the arbitrator and in approaching that court at the post-award stage without taking any steps to move the petition for a period of nearly two years. It is for such reason that the court observed that nothing in such order would affect the challenge petition pending before the Alipore court. It is possible that such order may be reversed in appeal. It is equally possible that such order may not be interfered with, including the observation in its last sentence.

9. Accordingly, since it is evident from the cause-title itself that the respondent herein was otherwise amenable to the jurisdiction of the Alipore court, the order impugned dated August 13, 2018 is set aside and Misc. Case no. 298 of 2015 (R No. 385 of 2015) is restored to the board of the Additional District Judge, 16 Court at Alipore.

10. In the event the Delhi High Court order of January 6, 2017 is not reversed in appeal within a period of eight weeks from date, the Alipore court will proceed with the petition under Section 34 of the Act of 1996 on merits. If, however, the Delhi High Court order of January 6, 2017 is reversed in appeal, the law will take its own course and the appellant herein will find the appropriate court to carry its petition for challenging the relevant award in accordance with law.

11. FMA 51 of 2019 and CAN 10094 of 2018 are disposed of.

12. There will be no order as to costs.

13. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.