Single Judge Of Commercial Division Has Jurisdiction Over Original Applications In International Commercial Arbitration: Calcutta High Court
The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held that original applications related to International Commercial Arbitration are to be entertained by the Single Judge of the Commercial Division.
The High Court held that the Commercial Courts Act, 2015 defines the Commercial Division and the Commercial Appellate Division distinctly. The Commercial Division, comprised of a Single Judge as per Section 4(1), handles original applications and appeals arising from International Commercial Arbitration. In contrast, the Commercial Appellate Division, as defined in Section 5(1), consists of one or more Division Benches and deals with appeals arising from decisions made by the Commercial Division.
The question before the High Court was whether the Bench, sitting singly in the Commercial Division, has the authority to handle this matter or if it should be addressed by the Commercial Appellate Division which is comprised of a Division Bench.
The High Court referred Section 42 of the Arbitration Act and noted that it states that if any application related to an arbitration agreement has been made in a court, that court alone will have jurisdiction over all subsequent applications related to the same arbitration agreement and proceedings.
The High Court referred to West Bengal and others vs. Associated Contractors (2015) 1 SCC 32 where the Supreme Court held that the non-obstante clause in Section 42 did not apply because the agreement between the parties did not fall under its scope. Section 42's applicability was only relevant when the initial court lacked legal jurisdiction.
In contrast, the High Court noted that the case involved a jurisdictional bar based on statutory provisions rather than an agreement between the parties. The non-obstante clause in Section 42 overrides any other provisions in Part I or related laws. Therefore, it held that the definition clause in Section 2 sub-section (e)(ii) of the Arbitration Act, which the Respondents cited to argue that the matter should be addressed by the Commercial Appellate Division, was not applicable when the initial court has already entertained the application.
The High Court held that Section 42 applied to the current case which granted Single Judge sitting in the Commercial Division jurisdiction over all subsequent applications related to the arbitration proceedings.
The High Court held that the decision of the Supreme Court in Associated Contractors predates the CC Act and does not account for its provisions. It held that Section 2(1)(e)(ii) of Arbitration Act applies in general disputes but is overridden by the CC Act when it involves commercial disputes as stipulated in Section 10. It held that Section 10(1) of the CC Act clearly indicates that applications and appeals from International Commercial Arbitration must be handled by the Commercial Division of the High Court where it has been established.
Thus, the bench held that the CC Act clearly assigns the jurisdiction for handling applications and appeals related to International Commercial Arbitration to the Single Judge in the Commercial Division.
Brief Background:
A foreign award was issued in Chicago and a subsequent application for enforcement was filed before the High Court. The High Court has to decide whether it had jurisdiction to entertain the application under Section 9 of the Arbitration Act given the related pending applications under Section 34 of the Code of Criminal Procedure.
Initially, a coordinate Bench of the High Court ruled in favor of its jurisdiction regarding this application. However, this decision was challenged and the Division Bench of the High Court decided that the issue of maintainability and jurisdiction should be reviewed by High Court in the context of the Section 9 application.
The Respondents argued that a Single Judge of the High Court, which handles the Commercial Division matters, lacked jurisdiction. They based their argument on Section 2(1)(e)(ii) of the Arbitration Act and argued that the property involved is in Rajarhat New Town. They argued that since the arbitration was international and commercial and if it were a suit it would be heard by the Commercial Appellate Division under the Commercial Courts Act, 2015.
Further, the Respondents argued that Section 10(1) of the CC Act must be interpreted in conjunction with the definition of “Court” in Section 2(1)(e) of the Arbitration Act. It contended that the term “Commercial Division” should be understood to include the Commercial Appellate Division when dealing with applications arising from original jurisdictions of other courts.
The High Court held that Section 10(1) of the CC Act assigns the jurisdiction for original applications related to International Commercial Arbitration to the Single Judge of the Commercial Division. Therefore, it held that the bench sitting singly in the Commercial Division has the jurisdiction to hear and resolve the Section 9 application.
The matter will be listed next on August 6, 2024.
Case Title: Uphealth Holdings Inc Vs Glocal Healthcare Systems Pvt Ltd And Ors and Connected Matters
Case Number: AP-COM/490/2024 IA NO: GA-COM/1/2024, GA-COM /8/2024 and Connected Matters
Advocate for the Petitioner: Mr. S.N.Mookherjee, Sr. Adv. Mr. Ratnanko Banerji, Sr. Adv. Mr. Suddhasatva Banerjee, Adv. Mr. Chayan Gupta, Adv. Mr. Anand S. Pathak, Adv. Mr. Vijay Purohit, Adv. Mr. Shivam Pandey, Adv. Mr. Anujit Mookherji, Adv. Mr. Anirudhya Dutta, Adv. Mr. S. Bajaj, Adv. Mr. S. Hoon, Adv. Mr. Nav Dhawan, Adv. Mr. S. Jain, Adv. Mr. A. Ahuja, Adv.
Advocate for the Respondent: Mr. Jayanta Kr. Mitra, Sr. Adv. Mr. Piyush Agarwal, Adv. Mr. Debojyoti Das, Adv. ..for respondent no.1 Mr. Ranjan Bachawat, Sr. Adv. Mr. Debashis Karmakar, Adv. Mr. Dhruv Chadha, Adv. Mr. Sagnik Bose, Adv. Mr. Satyam Ojha, Adv. …for respondent no.2 Mr. Krishnaraj Thaker, Adv. Mr. Dhruv Chadha, Adv. …for respondent no.3 Mr. Dhruba Ghosh, Sr. Adv. Mr. Amit Kr. Nag, Adv. Mr. Rajarshi Dutta, Adv. Ms. Ajeyaa Choudhury, Adv. …for respondent no.4 Mr. Sudipto Sarkar, Sr. Adv. Mr. Siddhartha Datta, Adv. Ms. Trisha Mukherjee, Adv. …for respondent no.5 Mr. Abhrajit Mitra, Sr. adv. Mr. Sarvapriya Mukherjee, Adv. Mr. Anindya Choudhury, Adv. …for respondent no.6
Date of Judgment: 19th July, 2024.