Petition To Set Aside Arbitral Award Lies Before A High Court Only When It Possesses Original Civil Jurisdiction : Supreme Court

The Supreme Court observed that a petition to set aside arbitration award is maintainable before a High Court only when it possesses original civil jurisdiction.

In this case, a petition under Section 34 of the Arbitration and Conciliation Act was filed before the concerned District Court. This petition was held to be not maintainable, on the ground that the order of appointment of arbitrator under section 11(6) was a judicial order and section 42 required the appeal to be filed in the Court wherein that application was made. The Orissa High Court allowed the appeal against this order and restored the petition before the District Court.

Before the Apex Court, relying upon Section 42 and Section 11 of the Arbitration Act, it was contended that, the High Court, which has exercised the jurisdiction under Section 11 of Arbitration Act alone can be said to be `Court' and, therefore, Section 34 application shall lie before the concerned High Court only. 

Section 2(e) of the Arbitration Act defines a "Court" as follows: In the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes. Section 34 of the Act provides recourse to a 'Court' against an arbitral award.

Noticing the fact that the Orissa High Court does not possess the original jurisdiction, the bench of Justices MR Shah and MM Sundresh observed:

"In the absence of the High Court of Orissa having original jurisdiction, the concerned District Court can be said to be `Court' and, therefore, the proceedings under Section 34 of the Arbitration Act against the award passed by the Arbitrator shall lie before the concerned District Court, as defined under Section 2(e) of the Arbitration Act."

Dismissing the SLP, the bench observed that the High Court has not committed any error in remanding the matter to the concerned District Court/Court to decide Section 34 application in accordance with law and on its own merits.

Case details

Yashpal Chopra vs Union of India | 2022 LiveLaw (SC) 900 | SLP(C) 18324/2022 | 31 October 2022 | Justices MR Shah and MM Sundresh

Counsel: Ms. Meenakshi Arora, Sr. Adv. Mr. Tushar Arora, Adv. Ms. Reena Pandey, Adv. Ms. Manjulika Pal, Adv. Mr. Anurag Pandey, AOR

Headnotes

Arbitration and Conciliation Act,1996 ; Section 2(e), 34 - In the absence of the High Court of Orissa having original jurisdiction, the concerned District Court can be said to be `Court' - The proceedings under Section 34 against the award passed by the Arbitrator shall lie before the concerned District Court, as defined under Section 2(e).

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