Dismissal of Arbitration Petition for Lack of Jurisdiction Under Section 42 of the Arbitration Act.
11 January 2024
Arbitration Law >> Business & Commercial Law
The petition seeks the appointment of an arbitrator under Section 11 of the Arbitration & Conciliation Act, 1996, to resolve disputes between Hyundai (the petitioner) and Saumya (the respondent) arising from two agreements, dated 1st October 2011 and 26th September 2013. The dispute concerns the supply and hire of construction equipment. Both agreements contain arbitration clauses specifying the appointment of arbitrators in case of disputes.
Hyundai invoked the arbitration clauses but faced resistance from Saumya, who denied the existence of the agreement and raised issues like limitation. Hyundai filed the petition in the Bombay High Court, claiming that the venue for arbitration was Pune under the second agreement. However, it was revealed that the agreements were executed in Kolkata and that the area of operation was also based in Kolkata.
The Court referred to Section 42 of the Arbitration Act, which mandates that the first Court to hear an arbitration-related application will have exclusive jurisdiction over the matter. Since the Kolkata High Court had already dealt with earlier proceedings related to the dispute, the petition filed in the Bombay High Court was deemed without jurisdiction. The Court also cited a Supreme Court judgment that reinforces the principle of exclusive jurisdiction of the Court where the first arbitration application was made. Consequently, the petition was dismissed for lack of jurisdiction.
Section 11, Arbitration and Conciliation Act - 1996
Section 42, Arbitration and Conciliation Act - 1996
Arbitration and Conciliation Act, 1996