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Oil & Natural Gas Corporation Ltd. v. Afcons Gunanusa Jv .
Factual and Procedural Background
This petition was filed under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996, seeking to terminate the mandate of the existing Arbitral Tribunal and to substitute it with a new tribunal as per the contract clause. The petitioner also sought a stay on further proceedings before the Arbitral Tribunal pending the hearing and final disposal of the petition, along with interim reliefs and costs. The dispute arises from an issue related to the payment of fees to the Arbitral Tribunal. It is undisputed that the arbitration in question qualifies as an international commercial arbitration under Section 2(f) of the Act.
Legal Issues Presented
- Whether the High Court has jurisdiction to terminate the mandate of the Arbitral Tribunal and appoint a substitute tribunal in an international commercial arbitration under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996.
- Whether the reliefs sought by the petitioner, including stay of proceedings and substitution of the tribunal, can be granted by the High Court in the context of international commercial arbitration.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court observed that the arbitration at hand qualifies as an international commercial arbitration as defined under Section 2(f) of the Arbitration and Conciliation Act, 1996. It noted that under Section 11(9) of the Act, the jurisdiction to appoint an arbitral tribunal in such cases lies exclusively with the Supreme Court, not the High Court. Consequently, the High Court lacks jurisdiction to appoint a substitute arbitrator or to grant the reliefs sought by the petitioner under Sections 14 and 15. The Court emphasized the cumulative effect of Section 2(f) read with Section 11(9), concluding that the High Court cannot exercise jurisdiction in this matter. Hence, the petition was disposed of with liberty to the petitioner to approach the Supreme Court, while leaving all substantive contentions open for determination in appropriate proceedings.
Holding and Implications
The petition is dismissed for want of jurisdiction.
The direct effect of this decision is that the High Court cannot entertain or grant reliefs related to termination and substitution of the Arbitral Tribunal in an international commercial arbitration matter. The petitioner is permitted to initiate appropriate proceedings before the Supreme Court. No new precedent was established as the Court expressly left substantive issues open for future adjudication.
G.S. Kulkarni, J.:—
1. This is a petition filed under Section 14 and 15 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), praying for the following reliefs:—
“a. This Hon'ble Court be pleased to terminate the mandate of the Arbitral Tribunal;
b. this Hon'ble Court be pleased to substitute the present Tribunal with a new Arbitral Tribunal as per Clause 1.3 of the said contract;
c. pending the hearing and final disposal of the present petition, this Hon'ble Court be pleased to direct that all further proceedings before the Arbitral Tribunal be stayed;
d. ad-interim reliefs in terms of prayer clause (c) above be granted in favour of the petitioner;
e. the costs of the present petition be granted to the petitioner;
f. this Hon'ble Court be pleased to grant such further and other reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case”
2. The issue as raised by the petitioner is on payment of fees of the Arbitral Tribunal and it is on such ground the above prayers are made that the mandate of the arbitral tribunal be terminated and a substitute tribunal be appointed.
3. It is not in dispute that the arbitration in question is an international commercial arbitration within the meaning of Section 2(f) of the Act which defines ‘international commercial arbitration’ as under:—
“2(f) “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is—
(i) an individual who is a national of, or habitually resident in, any country other than India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) an association or a body of individuals whose central management and control is exercised in any country other than India; or
(iv) the Government of a foreign country;
4. Considering the provisions of Section 11(9) of the Act, the jurisdiction to appoint an arbitral tribunal in respect of international commercial arbitration, would not lie with this Court and is vested with the Supreme Court. Once at the threshold the Court lacks jurisdiction to make the very basic appointment of an arbitral tribunal in matters of international commercial arbitration, it cannot be assumed that the High Court nonetheless would have jurisdiction to appoint a substitute arbitrator. In my opinion, a cumulative effect of Section 2(f) read with Section 11(9) is certainly required to be kept in mind, when this Court is called upon to exercise jurisdiction under the provisions of Sections 14 and 15 of the Act.
5. Thus in the facts of the present case, this Court lacks jurisdiction to grant any reliefs as prayed by the petitioner.
6. The petition is accordingly disposed of with liberty to the petitioner to adopt appropriate proceedings before the Supreme Court. All contentions of the parties on merits are expressly kept open.
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