Jurisdiction To Execute An Arbitral Award Is With District Court, Not Commercial Court: Kerala High Court

The Kerala High Court on Tuesday held that the District Court has the jurisdiction to execute an arbitral award and the commercial court has not been conferred such jurisdiction under the Commercial Courts Act, 2015.

A single bench of Justice C S Dias evaluated the scheme of the Commercial Courts Act, 2015 to answer whether a commercial court was given jurisdiction to entertain an execution petition filed in connection with an arbitration award:

“Going by the scheme of the C.C. Act, the express exclusion of suits and applications reserved for judgment from the purview of transfer and the conscious omission of the provisions relating to execution proceedings under the Code of Civil Procedure in the schedule to the C.C. Act, urges me to agree and endorse the ratio decidendi in Shaji Augustine (supra), that applications mentioned in Section 15 of the C.C. Act do not include execution applications.”

The court relied on Shaji Augustine v. M/s. Chithra Woods Manors Welfare Association [2021 SCC Online Ker. 9840]  where it was observed that the procedure to be followed for execution of an arbitration award was not mentioned anywhere in the Commercial Courts Act and there was nothing to indicate that the jurisdiction of other courts had been excluded.

The court also analysed Section 15 of the Commercial Courts Act, 2015 to infer that after the establishment of commercial courts, applications under the Arbitration and Conciliation Act, 1996, pertaining to commercial disputes with a specified value, pending before a Civil Court were to be transferred to Commercial Courts. However, this does not include suits and applications already reserved for final judgment by the civil court prior to establishment of Commercial Courts and also execution petitions, the court pointed out

In the matter at hand, a sole Arbitrator had passed an award, for which the decree holder filed for execution before the District Court, Ernakulam. However, the District Judge transferred the petition to the Commercial Court under Section 15 of the Act. The jurisdiction of the Commercial Court was challenged by the petitioner. However, the Commercial Court was of the view that it had a vested right to execute arbitral awards. The said order of the Commercial Court was challenged by the petitioner.

The court observed that, the execution petition was filed in the District Court, after Commercial Courts were established in Kerala by way of the Act. Hence, it was a freshly filed petition and not a matter pending before the District Court. Hence, the invocation of Section 15 of the Act by the District Court is violative of the Commercial Courts Act, 2015, the court observed. The court also observed Section 15 of Act does not bring within its purview execution petitions. 

“Thus, if a more expansive interpretation is given to the word application falling under Section 15 of the C.C. Act, to include execution petitions also, then necessarily all the execution petitions pending before all the civil courts falling within the ken of the C.C. Act will have to be transferred to the Commercial Courts, which in turn will clog the special courts with such matters. Moreover, no practical purpose will be served by such transfer because the Special Courts are not conferred with any additional power than that of the Civil Courts, to speed track execution proceedings, as execution proceedings have been omitted in the schedule attached to the C.C. Act. Without a faster timeline provided under the C.C.Act, to enforce an award, it is immaterial whether the award is executed by the Civil Court or the Commercial Court.”

The court was of opinion that the District Court erred in transferring the matter to the Commercial Court and ordered the matter to be transferred back to the District Court, Ernakulam.

Counsel For Petitioner: Advocates Manu Vyasan Peter, P B Krishnan, K T Shyamkumar, Harish R Menon, Oashin Lalan, Aleena Sebastian

Counsel For Respondent: Advocate K T Bosco

Case Title: M/S. Beta Exim Logistics (P) Ltd. V M/S. Central Railside Warehouse Co., Ltd.

Citation: 2023 LiveLaw (Ker) 126

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