INDIA MEDIA SERVICES PRIVATE LIMITED V. SBPL INFRASTRUCTURE LIMITEDAND OTHERS

COURT: Telangana High Court

CORAM: Hon’ble Sri Justice P. Naveen Rao, Hon’ble Sri Justice Sambasivarao Naidu

DATE OF JUDGMENT: 09 June 2022

FACTS

Disputes emerged between two parties over a negotiating agreement signed on December 5, 2005, and the petitioner, India Media Services Pvt. Ltd., invoked the arbitration clause in a letter dated October 24, 2011. The Hon’ble Calcutta High Court appointed Hon’ble Justice Jayanta Kumar Biswas as arbitrator under section 11 of the Arbitration and Conciliation Act, 1996 (“Act”) in response to a plea filed by the petitioner. Respondent submitted an application with the Hon’ble court for the appointment of an arbitrator after the judge recused himself. The Hon’ble Justice Baskar Bhattacharya was subsequently appointed as an arbitrator with a deadline of August 2020 to conclude the proceedings which eventually concluded on August 9, 2020. The petitioner filed a petition under section 34 of the Act before the Hon’ble court, challenging the award which was passed on October 27, 2020.

On the file of the IX Additional Chief Judge, City Civil Court in Hyderabad (“IX ACJ, CCC, Hyderabad”), the respondent filed an execution petition under section 151 of the Code of Civil Procedure, 1908 (“CPC”). It is also obvious that respondent filed an Arbitration Application under Section 9 and that an appeal is pending before the Hon’ble Court against the orders in that application. It is worth noting that the Arbitrator’s decision is being challenged in a Calcutta High Court suit filed under Section 34. In the State of West Bengal, applications regarding Section 9 have also been filed. While this is true, on the grounds that the property is located in Hyderabad, the arbitrator’s ruling is being enforced in the state of West Bengal.

ISSUE RAISED

Whether the Hyderabad Civil Courts lack jurisdiction to entertain Execution Petition No. 191 of 2021?

JUDGMENT

The relevant provisions of the Act that have an effect on the matter in this revision, according to the Hon’ble Court, are Section 2(1)(e), Section 93, Section 344, Section 365, and Section

42. Section 42 applies despite any other provision in Part I of the Act or any other legislation on the topic that conflicts with the provision. As a result, it sweeps all other regulations dealing with the implementation of an award under the rug, despite the fact that it is equivalent as a “decree in fiction” by a Civil Court. The judgements in Sundaram Finance Limited (above) and Cheran Properties Limited (above) were considered in order to comprehend the arguments presented by the respondents’ counsel.

The Hon’ble Supreme Court considered the decisions of various High Courts, as well as relevant provisions of the Act and the Civil Procedure Code, and concluded that an award can be enforced anywhere in the country without the need for a transfer of the decree from the court with jurisdiction over the arbitral proceedings. It is significant to mention that Section 42 does not address the situation that the Hon’ble Supreme Court addressed. The Hon’ble Supreme Court did not take into account the opinion of a three-judge bench of the Hon’ble Supreme Court in Associated Contractors (supra). The mere mention of the Supreme Court’s decision in Associated Contractors (above) does not imply that the decision is overturned. As a result, the Associated Contractors ruling still holds the field today.

The view of a learned single judge of the Calcutta High Court that because the parties consented to the High Court’s jurisdiction, the High Court alone has jurisdiction to hear future motions for award enforcement. Looking back to the circumstances of the case, it is clear that an application under Section 9 has been brought before the Calcutta High Court, based on the provisions of Section 42 and the law put down by the Hon’ble Supreme Court in Associated Contractors. Even a Section 34 application appears to have been filed in the Calcutta High Court. As a result, an application for execution of the award can only be heard by the Calcutta High Court.

As a result, the IX ACJ, CCC, Hyderabad in the state of Telangana has no jurisdiction to hear Execution Petition No. 191 of 2021, which seeks to enforce an arbitrator’s award dated March 8, 2021 under Section 36 of the Act. The Hon’ble Court permitted the Civil Revision Petition and closed any pending miscellaneous petitions.

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