Aug 10,2022 | 7 min read

Section 42 of Arbitration and Conciliation Act, 1996: Jurisdiction of the Court in Arbitration Proceedings

Introduction

Arbitration, in recent times, has become a very productive and convenient form of dispute resolution. Various applications can be filed at various stages of arbitral proceedings under the Arbitration and Conciliation Act, 1996. An application in Arbitration and Conciliation Act, 1996, can be filed under section 8, section 9, section 11 and section 34. Parties are referred to arbitration, as per section 8 of the Arbitration and Conciliation Act, 1996.

 

An application for interim measures can be filed under section 9 of the Arbitration and Conciliation Act, 1996. An application for the appointment of arbitrators can be filed under section 11 of the Arbitration and Conciliation Act, 1996. An application to set aside an arbitral award can be filed under section 34 of the Arbitration and Conciliation Act, 1996. Though the arbitration proceedings have become convenient, there has always been confusion, regarding the jurisdiction of the arbitration proceedings. Section 42 of the Arbitration and Conciliation Act, 1996, clears out this confusion, by giving jurisdiction of arbitration proceedings to the court, where such application with respect to an arbitration agreement is first filed, all such applications for arbitration agreement and arbitration proceedings, shall also lie in that court. Section 34 puts a bar on the jurisdiction of courts, in which applications are filed after applications relating to a such arbitration agreement are filed before in another court.

 

Jurisdiction as given under section 42 of the Arbitration and Conciliation Act, 1996, is as given under:

 

42. Jurisdiction.—Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.

 

The meaning of Courts, for the purpose of the Arbitration and Conciliation Act, 1996, is given in clause (e) of sub-section (1) of section 2. Courts as defined under the said clause is as given under:

 

(e) “Court” means—

(i) 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;

(ii) in the case of international commercial arbitration, 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, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;]

 

Maintainability of Suit:

In regards to the maintainability of the suit, the court in the case of Strojexport Company Limited V. Indian Oil Corporation Limited, AIR 1997 Raj 120, referred to this question, In this case, the contract in question, was executed by a consortium of companies, with regards to the bank guarantee, the members of consortium approached Rajasthan High Court, the Rajasthan High Court in this case , said that, since, the leader of consortium has already approached the High Court of Delhi, thus, the court of District Judge, Jaipur City, had no jurisdiction to entertain the application submitted under section 11(6), read with section 8 of the Arbitration and Conciliation Act, 1996, as the bar on jurisdiction applied due to section 42 of the Arbitration and Conciliation Act, 1996.

 

Object and Relevance of the Section:

The object and relevance of Section 42 was discussed in the case of BGS SGS SOMA JV V. NHPC Ltd, (2020) 4 SCC 234, in this case, the court said, that section 42 of the Arbitration and Conciliation Act, 1996, is means to avoid conflicting jurisdiction, as when in arbitration agreement no seat is designated by agreement, and the seat is just a convenient venue, than several courts may have jurisdiction over the cause of action, to avoid jusch cases, section 42 is necessary to be in place.

 

Foreign seated International Commercial Arbitration:

In relation to foreign seated international commercial arbitration, the court in the case of Bharat Aluminium Co. V. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552, said that these provisions of part 1, apply only to arbitrations (domestic as well as international) that have their juridical or legal seat within the territory of India. If upon a construction thereof, the arbitration agreement is held to provide for a seat of arbitration outside India, the provisions of part 1 would be inapplicable to the extent inconsistent with arbitration law of the seat of arbitration, even if the arbitration agreement purports to provide that the Arbitration and Conciliation Act, 1996, shall govern arbitration proceedings. Awards made in foreign-seated international commercial arbitrations are subject to the jurisdiction of Indian courts only when the same is sought to be enforced in India in accordance with, and only to the extent provided for by, provisions of Part II. Further, no application for interim relief and no suit for interim injunction simpliciter is maintainable in India in respect of foreign-seated international commercial arbitrations.

 

Reference

·       Arbitration and Conciliation Act, 1996

·       Strojexport Company Limited V. Indian Oil Corporation Limited,AIR 1997 Raj 120

·       BGS SGS SOMA JV V. NHPC Ltd, (2020) 4 SCC 234

·       Bharat Aluminium Co. V. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552

 

 


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