Summary
The contractor first applied under Section 9 of the Arbitration and Conciliation Act, 1996 to a court at Visakhapatnam for interim protection against encashment of its bank guarantee and forfeiture of its security deposit. It later applied under Section 11(6) to the Orissa High Court for appointment of an arbitrator. The Orissa High Court appointed one without deciding the railway's objection to its jurisdiction, reasoning that the railway did not oppose an appointment in principle. The Supreme Court set the appointment aside. Under Section 42, once an application under Part I has been made to a court, all later applications arising from that arbitration agreement lie only before that court. The Section 11(6) application therefore lay before the Andhra Pradesh High Court. The respondent's lack of opposition could not confer jurisdiction the High Court did not have.
Issues
- Whether the Orissa High Court had jurisdiction to appoint an arbitrator under Section 11(6) when the claimant had earlier moved a court at Visakhapatnam under Section 9 on the same arbitration agreement, in view of Section 42 of the Arbitration and Conciliation Act, 1996.
Provisions considered
- Section 42, Arbitration and Conciliation Act, 1996Because the claimant first applied under Section 9 at Visakhapatnam, only the High Court of Andhra Pradesh at Amaravati could entertain later applications arising from the same agreement, including one under Section 11(6). (¶¶ 7, 7.1)
- Sections 9 and 11(6), Arbitration and Conciliation Act, 1996The earlier Section 9 application fixed the competent court, so the Section 11(6) application before the Orissa High Court was not maintainable. (¶¶ 3, 4, 6, 8)
Held
- The objection to jurisdiction under Section 42 went to the root of the matter. The High Court erred in appointing an arbitrator without deciding it. The fact that the railway did not oppose an appointment in principle could not confer jurisdiction on a court that otherwise lacked it. (¶ 6)
- Since the claimant had already moved the Visakhapatnam court under Section 9, Section 42 meant that only the High Court of Andhra Pradesh at Amaravati could decide later applications arising from the agreement. The Orissa High Court committed a serious error in entertaining the Section 11(6) application. (¶¶ 7.1, 8)
Result
Appeal allowed. The appointment of the sole arbitrator was set aside solely on the ground of lack of jurisdiction. The claimant may apply under Section 11(6) to the High Court of Andhra Pradesh at Amaravati, and an application made within four weeks is to be decided on its merits at the earliest. No order as to costs.