The Delhi High Court has recently interpreted the Supreme Court
judgement in Bharat Aluminium Company v Kaiser Aluminium
Technical Services Inc. (2012) 9 SCC 552
('BALCO') to lay down
which courts would have jurisdiction for proceedings under the
Arbitration and Conciliation Act, 1996 ('Act').
The Court has also interpreted the words 'has been
made' occurring in §42 of the Act, which says that
once an application under the Act has been made before a certain
court, it will be that court which will have exclusive jurisdiction
over the arbitral proceedings and all subsequent applications under
The Appellant entered into an agreement with her father, i.e.
the Respondent to jointly undertake construction and development in
the real estate sector. The place of arbitration was Delhi. The
arbitration clause also contained a specific clause stating that
issues regarding the decision of the arbitral tribunal could be
taken to any court of competent jurisdiction.
Pursuant to the award, the Respondent filed a §9
application in the Bombay High Court seeking a security to be
deposited by his daughter. On the other hand, a §9 application
was filed in the Delhi High Court by the Appellant seeking an
injunction restraining the Respondents from selling, alienating or
transferring the ownership interests.
Proceedings before the Division Bench:
Issues before the Court were as follows:
Whether the courts in Delhi or Mumbai had exclusive
jurisdiction to deal with the petitions?
Whether the proceedings before it were maintainable in view of
the bar under §42 of the Act?
Decision of the Division Bench:
The Division Bench interpreted paragraphs 95, 96 and 97 of
BALCO and ruled that the both courts, i.e. where
the subject matter of the suit is located, and the courts situated
in the place of arbitration would have concurrent jurisdiction.
Therefore for the present case, the courts in Mumbai and Delhi
would have concurrent jurisdiction.
On the issue of maintainability of the petition under §9
of the Act, the Court rejected the two fold arguments of the
Appellant which were:
That for §42, the mere act of filing a petition before the
registry of the Bombay High Court cannot be interpreted to mean
that an application before that court "has been
made" till the time that application is presented before
Parties should not be allowed to file frivolous application
before a court with a view to oust the jurisdiction of other
The court rejected the first argument by saying that the hiatus
between filing of an application and its presentation before a
judge cannot mean that an application "has (not)
been made". The court refused to comment on the
second argument, stating that the Bombay High Court would take
cognizance of these arguments. It is only if the Bombay High Court
rejects the Respondent's application by terming it mala fide,
with a view to oust jurisdiction of other courts, that the courts
in Delhi would have jurisdiction.
The decision is an instance where the courts have taken a
proactive step in discouraging multiplicity of proceedings and
would act as a guideline in future to decide the territorial
jurisdiction of courts under the Act.
For further information on this topic please contact
Tuli & Co
The Constitution of India is the supreme law of the land and forms the basis of Indian law and the parliamentary system of government – the Indian judiciary is independent of the executive and legislative branches of government.
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