Summary
A developer challenged appointment of an arbitrator by the Calcutta High Court in a dispute concerning property and an agreement in Bihar. The clause prescribed Kolkata only for tribunal sittings, and no cause of action or relevant business connection arose within the High Court’s territory. The Court set aside the appointment and review orders for want of jurisdiction, appointed a different sole arbitrator by the parties’ consent and preserved property status quo for fifteen days.
Issues
- Whether the Kolkata-sittings clause conferred jurisdiction on the Calcutta High Court to appoint an arbitrator.
- Whether consent or the earlier District Court application altered the jurisdictional position.
Provisions considered
- Section 11(6), read with Section 2(1)(e), Arbitration and Conciliation Act, 1996Although the definition of Court did not directly govern the High Court’s appointment function, the provisions required a harmonious reading connecting that function to the competent territorial court structure. (¶ 21-28)
- Section 42, Arbitration and Conciliation Act, 1996The earlier Section 9 application in the District Court did not attract Section 42 to the Section 11(6) application, which had to be made in a High Court. (¶ 29-32)
Held
- The agreement’s Kolkata-sittings provision designated a venue, rather than an agreed juridical seat or exclusive jurisdiction clause. The agreement, property and relevant cause of action lay outside the Calcutta High Court’s territory, and the developer did not carry on business there. (¶¶ 20, 43-48)
- A Section 11(6) application could not be brought in any High Court irrespective of territorial jurisdiction. Read harmoniously with Section 2(1)(e), the appointment jurisdiction belonged to a High Court exercising supervisory jurisdiction over the competent court. (¶ 26-28)
- Section 42 did not require the appointment application to be made in the District Court previously approached for interim relief. That court could not entertain a Section 11(6) application, so the provision was not attracted in the circumstances. (¶ 29-32)
- Consent could not confer jurisdiction where it was inherently absent. The developer had raised the objection before appointment and sought review; agreement to the appointed arbitrator’s fees did not establish willing submission to that arbitration. (¶¶ 15-19, 47-49)
- The Court set aside the appointment without casting any aspersion on the arbitrator’s conduct. By the parties’ consent it appointed Justice Bhaskar Bhattacharya as sole arbitrator, with sittings in Kolkata, and preserved status quo over the property for fifteen days to permit applications for interim relief. (¶ 49-51)
Result
Appeals allowed. The appointment and review orders were set aside. Justice Bhaskar Bhattacharya was appointed sole arbitrator by consent, and property status quo was ordered for fifteen days to enable applications for interim relief.