Summary
Odisha, after consulting the Orissa High Court, notified Courts of Civil Judge (Senior Division) as Commercial Courts under the Commercial Courts Act, 2015, and the appellants' Section 34 arbitration petitions were transferred there from the District Judge. They argued that Section 2(1)(e) of the Arbitration Act confines arbitration matters to the principal civil court of original jurisdiction and excludes inferior courts. The Supreme Court upheld the notification. The 2015 Act is later in time, aims at speedy disposal of commercial disputes including arbitration, and through Sections 3, 10, 15 and 21 routes domestic arbitration applications that would ordinarily lie before the principal civil court to the Commercial Court, with overriding effect. The contrary reading would make those provisions otiose and create two fora.
Issues
- Whether, under Section 3 of the Commercial Courts Act, 2015, a State can confer jurisdiction to hear applications under Sections 9, 14 and 34 of the Arbitration and Conciliation Act, 1996 on Commercial Courts below the rank of the principal civil court of the district, despite Section 2(1)(e) of the 1996 Act.
Provisions considered
- Section 2(1)(e), Arbitration and Conciliation Act, 1996Its definition of 'Court' as the principal civil court, excluding inferior courts, yields to the later Commercial Courts Act provisions for commercial disputes of specified value. (¶¶ 7, 8, 10, 11)
- Sections 3 and 10(3), Commercial Courts Act, 2015Commercial Courts may be constituted below District Judge level, and domestic arbitration applications that would ordinarily lie before the principal civil court must be filed in and decided by the Commercial Court. (¶¶ 7, 10, 11)
- Sections 15 and 21, Commercial Courts Act, 2015Pending arbitration applications of specified value stand transferred to the Commercial Court, and the Act has overriding effect over inconsistent law. (¶ 10)
Held
- The Commercial Courts Act, 2015 was enacted for speedy disposal of commercial disputes, including arbitration matters; being later in time, the legislature is presumed to have been aware of Section 2(1)(e), and with Sections 15 and 21 the 2015 Act prevails. (¶¶ 9, 10)
- All applications or appeals arising out of domestic arbitration must be filed in and decided by the Commercial Court having territorial jurisdiction where one is constituted; holding otherwise would frustrate the Act, render Sections 3, 10 and 15 otiose and create two fora for commercial disputes. (¶ 11)
- Odisha's notification, issued in consultation with the High Court, designating Civil Judge (Senior Division) courts as Commercial Courts with jurisdiction over arbitration applications accords with Sections 3 and 10 and is valid. (¶ 11)
Result
Appeals dismissed; the High Court's dismissal of the writ petitions upheld. No order as to costs.