Ici-Soma Jv vs Simplex Infrastructures Ltd
2016 Latest Caselaw 6067 Del

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+      OMP (ENF.) (COMM.) 73/2016
       ICI-SOMA JV                                        ..... Petitioner
                             Through:   Ms Aditi Sharma, Advocate.

                             versus

       SIMPLEX INFRASTRUCTURES LTD          ..... Respondent
                    Through: Mr Rishi Agrawala, Ms Neena
                               Nagpal and Ms Gunika Gupta,
                               Advocates.
       CORAM:
       HON'BLE MR. JUSTICE VIBHU BAKHRU
                    ORDER

       %            16.09.2016
VIBHU BAKHRU, J

IA No.11337/2016

1. This is an application filed on behalf of the Respondent (hereafter „applicant‟), styled as being under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereafter „the CPC‟) read with Section 42 of the Arbitration and Conciliation Act, 1996, inter alia, praying that the present petition be dismissed.

2. The learned counsel for the applicant has mainly urged three grounds in support of the above prayer.

2.1 First, it is contended that the applicant has already filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter „the Act‟) challenging the Arbitral Award dated 18.11.2015 before the

Courts at Gurgaon. It is stated that the said petition was filed on 13.01.2016 which is prior in point of time to the filing of the present petition and therefore, this Court would not have the jurisdiction to entertain the present petition.

2.2 Second, that by virtue of Section 42 of the Act, only the court which has entertained a prior application/petition under Part I of the Act would have the jurisdiction to entertain any subsequent application/petition in respect of the same subject matter under Part I of the Act.

2.3 Third, that in terms of the work order, the Courts at Gurgaon have the exclusive jurisdiction over the subject matter of the contract.

3. Insofar as the first objection is concerned, the same is founded on the basis that the Arbitration and Conciliation (Amendment) Act, 2015 (hereafter „the Amendment Act‟) is not applicable to the Arbitral Award in question. The question whether Section 26 of the Amendment Act which provides for application of the Amendment Act to the arbitral proceedings reads as under:-

"26. Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act."

4. It is seen that the first part of Section 26 specifically restricts the non applicability of the Amendment Act "to the arbitral proceedings". The said Section does not prohibit the applicability of the Amendment Act to

proceedings before the Court. This is also a view taken by the Division Bench of the Calcutta High Court in Tufan Chatterjee v. Rangan Dhar: AIR 2016 Cal 213.

5. The Arbitral Award was made on 18.11.2015; that is after the Amendment Act had come into force. Sub-section (2) of Section 36 of the Act as amended by virtue of the Amendment Act reads as under:

"(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub- section (3), on a separate application made for that purpose."

6. Thus, by virtue of Section 36(2) of the Act, the Award in question would not become unenforceable only for the reason that an application under Section 34 of the Act had been filed by the applicant.

7. The second issue to be considered is whether this Court would have the jurisdiction to entertain the present petition in view of the prior application filed under Part I of the Act before the Courts at Gurgaon. This question is squarely covered by a decision of a Coordinate Bench of this Court in Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd.: 2009 (3) ArbLR 524(Delhi),wherein this Court held as under:

"Section 42 would also not apply to execution applications. The execution application is not "arbitral proceedings" within the meaning of Section 42 of the Act and is not a subsequent application arising out of the agreement and the arbitral proceedings. In fact the arbitral proceedings come to an end when the time for making an application to set aside the

arbitral award expires and the execution application is an enforcement of the award. Thus the place of filing of the execution application need not be the place of the filing of the application under Section 34 of the Act for the reason of Section 42 of the Act."

8. The aforesaid view was also followed by this court in M/s Religare Finvest Limited v. Ranjit Singh Chouhan And Anr,:

MANU/DE/2330/2012.

9. The learned counsel appearing for the applicant had also relied on a decision of a Coordinate Bench of this Court in Engineering Project (India) Ltd. v. Indiana Engineering Works Pvt. Ltd.: 2004 (76) DRJ 119. A plain reading of the said judgment indicates that the issue whether the petition under Section 36 of the Act was required to be filed in the same Court in which prior application/petition under Part I had been filed was not the subject matter of controversy. It is seen that in this case, the respondent itself had filed an application under Section 36 of the Act and this Court had come to the conclusion that the said application was malafide as it was intended only for the purposes of ousting the jurisdiction of the Courts at Ranchi. Therefore, the question whether the petition for execution of the decree was required to be filed in the same Court as the petition under Section 34 of the Act was neither put as a point in issue nor considered by the Court. In my view, the decision would have no applicability to the facts of the present case.

10. Lastly, it is to be considered whether in terms of the contract between the parties, the present petition is required to be filed in courts at Gurgaon. Clearly, the jurisdiction as to the subject matter of the contract cannot be

extended to execution proceedings. Whilst, the applicant is right that the parties have agreed that the Courts at Gurgaon will have jurisdiction over the subject matter of the dispute or contract between the parties, however, the same would not preclude the petitioner from executing the award through the Court having territorial jurisdiction over the place where the Judgement Debtor resides or holds properties. The scope of the two proceedings is entirely different and execution proceedings are not governed by the contract between the parties as to the jurisdiction relating to the subject matter of the contract or the disputes.

11. In view of the above, the present application is dismissed.

VIBHU BAKHRU, J SEPTEMBER 16, 2016 MK