Ncc Vizag Urban Infrastructure ... vs M/S. Matusudo Industries Pte. Ltd ...
2022 Latest Caselaw 1960 Tel

 \THE HON'BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA
                                                    AND
         THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI

                                        COMCA.No.9 of 2022
JUDGMENT: (Per the Hon'ble the Chief Justice Satish Chandra Sharma)


          The present appeal is arising out of order dated 07.04.2022,

passed by the Judge, Prl. Special Court in the Cadre of District

Judge for Trial and Disposal of Commercial Disputes at

Hyderabad, in COP.No.23 of 2022 (M/s.Mastsudo Industries

Pvt. Ltd., v. NCC Vizag Urban Infrastructure Ltd.,)


          The facts of the case reveal that an application was preferred

by M/s. Mastsudo Industries Pte Limited and Giant Engineering

and Construction India Private Limited, respondents No.1 and 2 in

the present appeal, under Section 9(1)(ii)(a, b, c, d & e) of the

Arbitration and Conciliation Act, 1996 (for short 'the Act') for

grant of interim order. The learned Judge has passed an order

directing the present appellant- NCC Vizag Urban Infrastructure

Limited to furnish security to a tune of Rs.80 crores within a period ::2::

of seven days failing which the schedule property belonging to the

appellant shall stand attached.

Learned counsel appearing for the appellant before this

Court has argued that the Commercial Court at Hyderabad does

not have jurisdiction in the matter keeping in view the statutory

provisions contained in the Act, and it is the High Court alone

where such application could have been preferred under

Section 9 of the Act.

Learned counsel further argued that respondent No.1 is a

company incorporated under the provisions of the Companies Act,

Singapore, having its registered office at 7030 ANG MO KIO,

Avaenue 5, #08-61, North Star @AMI, Singapore (569880), and as

agreement was executed between the parties including a body

corporate, which is incorporated in a country other than India, it is

only the High Court where such application was maintainable, in

view of Section 2(f) of the Act.

::3::

The statutory provisions governing the field which are

necessary to decide the present case as contained under Section

2(1)(e)(f) and Section 9 reads as under:

Definitions.--(1) In this Part, unless the context otherwise requires,--

(a) ......

(b) ....

(c) .....

(d) [(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 ::4::

from decrees of courts subordinate to that High Court;]

(f) "international commercial arbitration" means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is--

(i) an individual who is a national of, or habitually resident in, any country other than India; or

(ii) a body corporate which is incorporated in any country other than India; or

(iii) [***] an association or a body of individuals whose central management and control is exercised in any country other than India; or

(iv) the Government of a foreign country;

9. Interim measures, etc. by Court.-- [1] A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court--

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:--

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

::5::

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. [(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.] [(3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious.] ::6::

The aforesaid statutory provisions of law make it very clear

that Court, in respect of an international arbitration, shall be the

High Court having jurisdiction to hear the appeals from decrees of

courts subordinate to that High Court.

Learned Counsel for respondents No.1 and 2 has vehemently

argued before this Court that keeping in view the definition clause,

as contained in Section 2(1)(e) of the Act, only those High Courts,

which are having original jurisdiction, are the High Courts covered

under the definition clause and in the States where the High Courts

are not having original jurisdiction, petition has to be preferred

under Section 9 of the Act before the Principal Civil Court of

original jurisdiction in a district.

To bolster his submissions, he has placed reliance upon the

judgment dated 10.09.2014, in the case of State of West Bengal v.

vs. Associated Contractors1.

This Court has carefully gone through the aforesaid

judgment. The judgment was delivered on 10.09.2014 and the

2014 0 Supreme (SC) 662 ::7::

definition clause, which existed prior to amendment i.e., prior to

23.01.2015 is reproduced as under:

"(e) "Court" means 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;"

The Arbitration and Conciliation Act was amended by Act

No.3 of 2016 with effect from 23.10.2015 and the amendment

brought on record a new definition altogether different from the

earlier definition in respect of Court, and the High Courts, having

jurisdiction to hear the appeals from decrees of Courts subordinate

to that High Court were the courts under the meaning of

Section 2(1)(e) of the Act and therefore, the judgment relied upon

by learned counsel is of no help to respondents No.1 and 2.

It is an undisputed fact that one of the parties to the

agreement is a body corporate, which is incorporated in Singapore

meaning thereby, in a country other than India.

::8::

Heavy reliance has also been placed by learned counsel for

respondents No.1 and 2 upon the judgments delivered in the cases

of Bharat Aluminium Co. Ltd. V. Kaiser Aluminium

Technical Service, Inc.2, Aniket Sa Investments LLC,

Mauritius v. Janapriya Engineers Syndicate Pvt. Ltd.,

Hyderabad3 and Indus Mobile Distribution Private Limited

v. Datawind Innovations Private Limited4.

All the aforesaid cases were in respect of seat for arbitration

and they were not on the issue in respect of court for the purposes

of filing application under Section 9 of the Act. Therefore, in the

considered opinion of this Court, the learned Judge was not having

jurisdiction in the matter to pass an order on an application

preferred under Section 9 of the Act.

In view of the above, order dated 07.04.2022, passed by the

Judge, Prl. Special Court in the Cadre of District Judge for Trial

and Disposal of Commercial Disputes at Hyderabad, in

2012 0 Supreme (SC) 596

2021 0 Supreme (Bom) 435

2017 0 Supreme (SC) 376 ::9::

COP.No.23 of 2022, is set aside with liberty to the parties to take

appropriate action in accordance with law.

The Appeal is, accordingly, allowed.

No costs.

As a sequel, miscellaneous petitions, pending if any, stand

dismissed.

______________________________ SATISH CHANDRA SHARMA, CJ

______________________________ ABHINAND KUMAR SHAVILI, J Date: 19-04-2022 LUR