Original Civil Jurisdiction And Arbitration: Unpacking The Supreme Court's Ruling On Section 29A Of The Arbitration Act

Jurisdictional Uniformity

At first glance, the Supreme Court's ruling appears to be a straightforward reiteration of Section 2(1)(e) of the Act. However, its significance in India's arbitration jurisprudence cannot be overstated. This decision gains particular importance against the backdrop of divergent interpretations, such as the Delhi High Court's ruling in DDA v. Tara Chand Sumit Constructions Co., where the 'Court' under Section 29A(4) was interpreted to mean the court with the power to appoint an arbitrator under Section 11 of the Act. This extended jurisdiction to High Courts without original civil jurisdiction. With various High Court's taking conflicting positions, the Supreme Court's short ruling now brings uniformity.

While the Act may seem straightforward, its practical application often reveals the complexities inherent in the legal system. The Supreme Court's ruling, in its broad sweep, appears to have settled the larger question of jurisdiction under Section 29A, yet there are layers to how this ruling should be understood, especially in the context of the five High Courts possessing original civil jurisdiction. A question arises – are these High Courts empowered to exercise their power under Section 29A for arbitral tribunals seated anywhere within those states?

Evolution and Expansion of Jurisdiction under the Delhi High Court Act, 1966

Section 5 of the Delhi High Court Act, 1966 (the “DHC Act”), confers upon the Delhi High Court original civil jurisdiction over the entire Union territory of Delhi. This jurisdictional framework has historical roots. In 1911, Delhi was designated the capital of India by the colonial government, upon its separation from the Punjab province and its reclassification as the 'Chief Commissioner's Province'. This status was formally established by the Delhi Laws Act, 1912, and subsequently expanded in 1915 to include part of the United Province of Agra and Oudh. This arrangement endured through India's independence and the subsequent reorganization of states, culminating in the delineation of the Union territory of Delhi or National Capital Territory of Delhi, of today, distinct from the National Capital Territory Region.

Theoretically, even if parties specifically agree in the arbitration agreement to seat the arbitral tribunal in Rohini or Dwarka, rather than simply stating Delhi, the Delhi High Court retains jurisdiction under Section 29A(4). These areas, covered by principal Civil Courts with original jurisdiction within their respective districts, do not detract from the overarching jurisdiction of the Delhi High Court.

Section 17 of the DHC Act, at the time of its enactment, conferred upon the Delhi High Court jurisdiction, including all legal authorities and powers that were in force immediately before, as exercisable by the Court of the Judicial Commissioner for Himachal Pradesh under the Himachal Pradesh (Courts) Order, 1948 – for the then Union territory of Himachal Pradesh. Additionally, the DHC Act empowered the Delhi High Court with ordinary original civil jurisdiction over the Union territory of Himachal Pradesh.

This jurisdictional framework persisted post-independence and was further solidified by the enactment of the State of Himachal Pradesh Act, 1970 (the “HP Act”). The HP Act established the High Court of Himachal Pradesh, conferring upon it the jurisdiction, powers, and authority previously exercised by the Delhi High Court under Section 17 of the DHC Act, including the original civil jurisdiction over the Union territory of Himachal Pradesh, now the state of Himachal Pradesh. Consequently, the Himachal Pradesh High Court retains jurisdiction under Section 29A(4) of the Act, similar to that of the Delhi High Court. This jurisdiction is upheld even when the seat of arbitration falls within a district already covered by a principal Civil Court with original jurisdiction.

Jurisdictional boundaries of erstwhile Presidency towns' High Courts: History and Contemporary application

The High Courts at the erstwhile Precedency towns of Calcutta, Madras, and Bombay were established under their respective Letters Patent, with a common Clause 11 stipulating that these courts shall exercise ordinary original civil jurisdiction within such local limits as prescribed by law enacted by the competent legislature – now, the state legislatures. To delineate these jurisdictions, the colonial government enacted the Calcutta High Court (JurisdictionalLimits) Act, 1919 (the “Calcutta Act”), the Madras High Court (JurisdictionalLimits) Act, 1927 (the “Madras Act”), and the Greater Bombay Laws and the BombayHigh Court (Declaration of Limits) Act, 1945 (the “Bombay Act”). These enactments, alongside the Letters Patent, have been incorporated into the legal framework of independent India and remains in force, subject to periodic amendments. For example, the original civil jurisdictional boundaries of the Madras High Court were expanded in 1985.

For those unfamiliar, both the Calcutta and Madras Acts delineate specific points along the four cardinal directions across which the respective High Courts' original civil jurisdiction spread. These Acts explicitly detail streets or survey numbers that the coordinate lines traverse, facilitating navigation between designated points. For instance, the northern limits of the original civil jurisdiction of the Calcutta High Court start from the western bank of the Hooghly River near Ghusri Cotton Mill, extending through Chitpur Toll Bridge, and following the south bank of the Circular Canal to a point near the Barackpore Bridge. Similar provisions are made for other cardinal directions. Likewise, the Madras Act defines analogous coordinates within and around Chennai, encompassing areas falling under the ordinary civil jurisdiction of the Madras High Court. The Bombay Act, however, adopts a distinct approach, providing a schedule that identifies areas falling within the original civil jurisdiction of the Bombay High Court.

In the determination of jurisdiction under Section 29A(4) of the Act, the High Courts at Calcutta, Madras and Bombay are empowered if the parties expressly designate these cities as the arbitral seat or specify locations falling under the territorial limits delineated in the Calcutta, Madras and Bombay Acts. Conversely, if the arbitral seat falls outside these parameters, such as Tiruchirappalli or Hosur vis-à-vis the Madras High Court, then jurisdiction under Section 29A(4) does not vest with the High Court but reverts to the principal Civil Court of the respective districts, according to the Supreme Court's ruling read in conjunction with the Madras Act.

Variations in High Court's jurisdiction and the future

Therefore, in contrast to the expansive jurisdiction exercised by the Delhi and Himachal Pradesh High Courts over arbitral tribunals seated anywhere within their respective state/union territory, irrespective of the existence of principal Civil Courts within their district; the High Courts at Calcutta, Madras, and Bombay operate under more circumscribed mandates delineated by statutes. Moreover, Section 29A(4) of the Act confers upon the Delhi and Himachal Pradesh High Courts concurrent jurisdiction that extends comprehensively across all district courts within their jurisdictions. The High Courts at Calcutta, Madras and Bombay, though also possessing concurrent jurisdiction under Section 29A(4), are constrained to exercising their authority exclusively within the precincts of their respective statutory schemes.

In recent history, a few of these High Courts have decided applications under Section 29A(4) of the Act despite the seat of arbitration being outside their designated territorial jurisdiction for original civil cases. This anomaly may be attributed to the historical uncertainty surrounding the interpretation of 'Court' under Section 29A(4), amplified by divergent judicial opinions prior to the Supreme Court's ruling. While the Supreme Court's ruling has clarified this ambiguity, it remains to be seen whether award-debtors will exploit this as a basis for challenging arbitral awards. Nonetheless, this serves as a reminder that the Act, though ostensibly straightforward, repeatedly presents new challenges and intricacies.

The Author is an Advocate practicing at the Delhi High Court. Views are personal.