"Article 20. Arbitration
(a) In the event of there being any dispute or difference between the Parties hereto as to any clause or provision of this Agreement or as to the interpretation thereof or as to any account or valuation or as to the rights, liabilities, acts, omissions of any Party hereto arising under or by virtue of these presents or otherwise in any way relating to this Agreement such dispute or difference shall be referred to the senior management of both Parties to resolve within three (3) weeks failing which it will be referred to an Arbitral Tribunal comprising of three arbitrators, one to be appointed by each party (i.e. Devas and Antrix) and the arbitrators so appointed will appoint the third arbitrator.
(b) The seat of Arbitration shall be at New Delhi in India.
(c) The Arbitration proceedings shall be held in accordance with the rules and procedures of the ICC (International Chamber of Commerce) or UNCITRAL.
(d) The Arbitration Tribunal shall reach and render a decision or award in writing (concurred in by a majority of the members of the Arbitral Tribunal with respect to the appropriate award to be rendered or remedy to be granted pursuant to the dispute, (including the amount that any indemnifying Party is required to pay to the indemnified Party in respect of a claim filed by the indemnified Party).
(e) To the extent practicable all decisions of the board of Arbitration shall be rendered no more than 30 (thirty) days following commencement of proceedings with respect thereto. The Arbitral Tribunal shall realize its decision on award into writing and cause the same to be delivered to the Parties.
(g) Each Party to any Arbitration shall bear its own costs or expenses in relation thereto, including but not limited to such Party's attorneys' fees, if any, and the expenses and fees of the member of the Arbitral Tribunal appointed by such party, provided, however, that the expenses and fees of the third member of the Arbitral Tribunal and any other expenses of the Arbitral Tribunal not capable of being attributed to any one member shall be borne in equal parts by the Parties."
"(i) restrain the Respondent from proceeding in any manner, with the ICC arbitration contrary to the Agreement dated 28.01.2005;
(ii) restrain the Respondent from getting the Agreement dated 28.01.2005 modified/substituted from ICC;
(iii) restrain the Arbitral Tribunal constituted by ICC under ICC Rules from proceeding with the arbitration;
(iv) Pass such other and further order(s) as may be deemed just and proper in facts and circumstances of this case."
(i) AA No. 483/2011 was filed by Antrix in the City Civil Court at Bangalore as far back as on 5th December 2011 much before the filing of the present petition by Devas and much prior to the AT passing the Award on 14th September, 2015. Therefore, the bar under Section 42 of the Act would apply to the present petition. Any further application could be instituted by Devas only before the City Civil Court at Bangalore.
(ii) Devas not having objected to the territorial jurisdiction of the City Civil Court at Bangalore must be taken to have waived such objection. Devas' objection to the jurisdiction of the Bangalore City Civil Court was on the basis that the seat of arbitration was at New Delhi. It is submitted that after the judgment of the Constitutional Bench of the Supreme Court in Bharat Aluminium Co. v. Kaiser Aluminium Technical Service Inc. (2012) 9 SCC 552 (' Balco '), the designation of the 'seat' or 'place' of arbitration does not confer exclusive jurisdiction on the Court of that location. Reliance is also placed on the decisions of this Court in Priya Hiranandani Vandrevala v. Niranjan Hiranandani 2016 (3) Arb LR 128 affirmed by the Division Bench (DB) in 2016 (4) Arb LR 18 (Del) (DB) and NHPC Ltd. v. Hindustan Construction Co. 2015 (4) Arb LR 297 (Del) (DB);
(iii) By placing reliance on paragraph 265 of the petition filed under Section 34 of the Act before the Bangalore City Civil Court, Antrix had sought to explain why it is only that Court which has exclusive jurisdiction to deal with the petition. The subject matter of the dispute viz. the termination of the agreement having been conveyed in Bangalore, it was plain that the substantial part of the cause of action arose in Bangalore. Further, the agreement was signed at Bangalore. Both the parties have their registered office in Bangalore. Therefore, the Court in Bangalore continued to have subject matter jurisdiction apart from territorial jurisdiction and pecuniary jurisdiction. In terms of the decision of the Supreme Court in State of West Bengal v. Associated Contractors 2015 1 SCC 32, it is the Bangalore Court which would have jurisdiction and the present petition would be barred under Section 42 of the Act.
(iv) The Court at Delhi will not have exclusive jurisdiction only because the seat of arbitration is in Delhi. The decision in Balco (supra) states that the Court at the seat and the Court where suit would have been instituted (treating arbitration to be a suit) would have concurrent jurisdiction. Even Article 20(f) of the Agreement dated 28th January, 2005 indicates that the intention of the parties was not to confer exclusive jurisdiction on any one Court. It states that the Award may be enforced by any Court of competent jurisdiction.
(v) The reliance placed by Devas on the decisions in Reliance Industries Ltd. v. Union of India (2014) 7 SCC 603; A v. B (2006) EWHC 2006 (Comm.), Prima Buildwell Pvt. Ltd. v. Lost City Developments LLC (2011) 125 DRJ 624 and Enercon (India) Ltd. v. Enercon GMBH (2014) 5 SCC 1 in support of the plea that the seat is akin to exclusive jurisdiction is misplaced. Those decisions were concerned with the issue whether Part I of the Act would apply to international arbitration. The said principle would be inapplicable when two Courts are within India, both being governed by the same legal regime. In such cases, unless it is held that the Court within whose jurisdiction the cause of action arises alone would have jurisdiction, Section 2(i)(e) would be rendered otiose.
(vi) Likewise, the other decisions relied upon by Devas i.e., Salarjung Museum v. Design Team Consultants 2009 Supp (2) Arb LR 463 and Jyoti Turbopower Services Pvt. Ltd. v. Shenzhen Shandong Nuclear Power Construction 2011 (3) Arb. LR 442 (DB) were rendered earlier to the decision of the Constitution Bench of the Supreme Court in Baico (supra). On the other hand, the decision of the learned Single Judge in Priya Hiranandani Vandrevala v. Niranjan Hiranandani (supra) which was confirmed by the DB in appeal squarely applied in the facts of the present case. The decisions in Swastik Gases Pvt. Ltd. v. IOCL (2013) 9 SCC 32 and B.E. Semioes Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd. (2015) 12 SCC 225 were in cases where the relevant clause specified the Court that would have exclusive jurisdiction whereas there is no such exclusive jurisdiction clause in the present case. Likewise, the decision dated 4th October, 2016 in Arb. Pet. No. 278/2016 (R.P. Saxena & Sons v. Mahindra Logistics Ltd.), the decision dated 8th March, 2016 in Arb. P. 375/2015 (Overseas Mobiles Pvt. Ltd. v. ZTE Telecom India) and the decision of the Madras High Court in Surya Pharmaceuticals v. First Leasing Company of India (2014) 2 CTC 545 were in cases where there was an exclusive jurisdiction clause.
(vii) The question that requires to be addressed by this Court is whether the present petition is barred by Section 42 of the Act and for that limited purpose, whether the Bangalore Court is the Court of competent jurisdiction. The Court will have to examine whether the Bangalore Court has territorial, pecuniary or subject matter jurisdiction. However, this Court is not required to examine whether the reliefs prayed for in the petition pending in City Civil Court at Bangalore are capable of being granted. That issue would be decided by the City Civil Court in Bangalore before which AA No. 483/2011 is pending.
(viii) As explained by the Calcutta High Court in Hriday Nath Roy v. Ram Chandra Barna Sarma ILR 48 Cal 138, there is a fundamental distinction between lack of jurisdiction and erroneous exercise of jurisdiction. In the present case, it could not be said that the Bangalore Court lacks jurisdiction in view of Section 2(1)(e) of the Act as explained by the Constitution Bench in Balco (supra). Irrespective of whether the order passed by the Bangalore Court in the petition under Section 9 was erroneous, that would not oust the jurisdiction of that Court. In other words, it would not be an order passed by a Court without jurisdiction. At the highest, it could be said to be an erroneous order passed by a Court of competent jurisdiction. As long as the Bangalore Court is of the view that it does not lack territorial, pecuniary or subject matter jurisdiction, the bar under Section 42 would apply. Reliance is placed on the decisions in Sasken Communication Technologies Ltd. v. Prime Telesystems Limited (2002) 99 DLT 640 and Engineering Project (India) Ltd v. Indiana Engineering Works (2004) 76 DRJ 119.
(ix) The averments in the application under Section 11 of the Act before the Supreme Court were in the context of jurisdiction of that Court and not in respect of the jurisdiction of the Court at Delhi or Bangalore. Further, as explained in State of West Bengal v. Associated Contractors (supra), under the Act, as it stood prior to 23rd October, 2015, applications under Section 11 of the Act were not considered to be before a 'Court' as defined under Section 2(1)(e) of the Act and, therefore, would not be included for the purposes of Section 42 of the Act. In any event, even if the averments in the petition before the Supreme Court were to be construed as some kind of admission or concession, it would not act as an estoppel against Antrix from approaching the Bangalore City Civil Court since there cannot be any estoppel against law.
(x) There was no question of issue estoppel since the issue of jurisdiction of the Court competent to hear the application within the meaning of Section 2(1)(e) and Section 42 of the Act was not at all an issue before the Supreme Court and not decided by it in Antrix Corporation v. Devas Multimedia (2014) 11 SCC 560. There the Supreme Court clarified that the invocation of the ICC Rules by Devas would be subject to challenge in appropriate proceedings.
(xi) Devas was guilty of suppression of material facts and documents including the factum of having delayed the adjudication of AA No. 483/2011; having filed enforcement proceedings in the Court in Paris, having filed an IA in AA No. 483/2011 and the factum of it having been argued for several days.
(i) The question whether Section 42 of the Act is applicable in the present case ought to be decided by this Court alone. Reliance is placed on the decision of the Madras High Court in Surya Pharmaceuticals v. First Leasing Company of India (supra), the onus was on Antrix to establish that that (a) the Section 9 petition before the Bangalore Court was maintainable in law; (b) the Section 9 petition before the Bangalore Court was one which was made "under this Part"; and (c) the Bangalore Court had jurisdiction to entertain the Section 9 petition filed by Antrix. That onus has not been discharged by the Respondent.
(ii) The petition filed under Section 9 by Antrix in the City Civil Court at Bangalore was not maintainable in law and was ex facie incompetent as it sought a stay of the ICC arbitration proceedings. It was explained by the Supreme Court in Bhatia International v. Bulk Trading S.A. (2002) 4 SCC 105 ('Bhatia') that Section 9 only permits an application for interim measures mentioned in clause (i) and (ii) thereof. There could not be an application for stay of the arbitration proceedings or to challenge the existence or validity of the arbitration agreement or the jurisdiction of the AT. Reliance was placed on the decision of Bombay High Court in Oil & Natural Gas Corporation v. Jagson Inti. Ltd. AIR 2005 Bom 335. Reliance was also placed on the decision in H.K.A. Agencies v. Actia India Pvt. Ltd. (2011) 1 ILR 378.
(iii) Section 42 of the Act will not apply in the following situations:
(a) Where an application under Part I is filed in a Court that is not competent to consider the said application; and
(b) Where an application has been made in a Court of competent jurisdiction but it is barred by law i.e., it is not an application under Part I of the Act.
In the present case, since neither of the above conditions have been met, therefore, the bar of Section 42 of the Act would not apply.
(iv) It is reiterated that the Court at Bangalore does not have the 'subject matter jurisdiction' since it does not have the jurisdiction to grant the reliefs sought in the application. Reliance is placed on the decision of this Court in Park Plaza Hotels & Resorts Pvt. Ltd. v. World Park Hotels (India) Ltd. 2005 (Supp) Arb LR 231 (Del) and the decision dated 16th September, 2016 in Execution Petition No. 443/2014 (GEA EGI Contracting v. Bharat Heavy Electricals Ltd.).
(v) Antrix has been indulging in forum shopping. In its petition under Section 11 of the Act before the Supreme Court, Antrix itself conceded that the seat of arbitration was in Delhi; that the cause of action only arose at Delhi and that the competent Court for the purposes of Section 2(1)(e) was Delhi. Antrix further conceded that the Award had its genesis in the policy decision of the Government taken in Delhi and that the cause of action wholly arose within the jurisdiction of this Court. Having taken the above stand in the petition under Section 11 of the Act, Antrix was now estopped from contending to the contrary. Reliance is placed on the decision in Nagindas Ramdas v. Dalpatram Ichharam (1974) 1 SCC 242.
(vi) There was no stay of the arbitration proceedings by the Supreme Court in the application in the petition under Section 11 of the Act which was pending before it. There was also no such stay granted in the Section 9 petition of Antrix pending before the City Civil Court, Bangalore.
(vii) Further, Antrix filed a suit before the Bangalore City Civil Court seeking stay of the arbitration proceedings. The prayers made in the Section 11 petition before the Supreme Court and the Section 9 petition in the Bangalore City Civil Court were identical. Even the pleadings were identical. The Section 11 petition having not been entertained, the Section 9 petition was barred in law and ex facie incompetent. Even the suit filed by Antrix was barred in law and not maintainable in view of Section 5 of the Act as explained by the Supreme Court in Chatterjee Petrochem Co. v. Haldia Petrochemicals Ltd. (2014) 14 SCC 574.
(viii) The Section 11 petition of Antrix was dismissed by the Supreme Court on 10th May, 2013. The review petition filed against the said judgment was dismissed on 29th August, 2013. With the dismissal of the Section 11 petition, the invocation of ICC arbitration by the Petitioner stood upheld and, therefore, the principles of res judicata were attracted and would give rise to an issue estoppel. Reliance is placed on the decision of the Supreme Court in Hope Plantations Ltd. v. Taluk Land Board, Peermade (1999) 5 SCC 590 and Union of India v. Reliance Industries Ltd. (2015) 10 SCC 213.
(ix) Pursuant to the decision of the Supreme Court, Antrix fully participated in the arbitration proceedings. The principle of comity of jurisdiction had no application to the present case since the City Civil Court at Bangalore had not even assumed jurisdiction or upheld that it did. Devas' objection to the jurisdiction of that Court had been pending consideration since 2011. For the principle of comity of jurisdiction to apply, the Court where the other proceedings are pending has to be (a) a Court of competent jurisdiction; (b) a Court that can grant the relief sought for; and (c) whose jurisdiction has not been ousted by an agreement of the parties. The answer to the above conditions has to be in the negative in view of the declaration of law in Bhatia (supra). Reliance is also placed on the decision dated 31st May, 2007 of this Court in W.P. 4037 of 2007 (CFA Institute v. All India Institute of Technical Education) and Kanchid Mal v. DDA (2007) 99 DRJ 406 (DB).
(x) The proceedings before the Bangalore City Civil Court are coram non judice i.e., wholly without jurisdiction. Even assuming that the Bangalore Court takes upon itself to exercise a jurisdiction that it does not have, any order passed by it would be a nullity. Reliance is placed on Harshad Chiman Lal Modi v. DLF Universal Ltd. (2005) 7 SCC 791 and Official Trustee, West Bengal v. Sachindra Nath Chatterjee (1969) 3 SCR 92.
(xi) The decisions of both the learned Single Judge and the DB in Priya Hiranandani Vandrevala v. Niranjan Hiranandani (supra) are distinguishable on facts as there was no agreed seat of arbitration in that case. The parties there were not ad idem as to the seat of arbitration. Clause 13.4 of the agreement in that case permitted the parties to approach "a Court of competent jurisdiction for enforcement of the arbitral award". A specific plea taken in that case was that the Section 9 petition in the Bombay High Court was 'frivolous' and 'malafide'. No plea was taken that the petition was incompetent or barred by law. In Priya Hiranandani Vandrevala v. Niranjan Hiranandani (supra), the Court was dealing with two petitions that were maintainable and which were filed in two Courts of competent jurisdiction. Moreover, the reliefs sought were in respect of immoveable properties located in Mumbai.
(xii) The seat is analogous to an exclusive jurisdiction clause. Once the parties here decided that the seat would be in Delhi, the Courts in Delhi would have exclusive jurisdiction to entertain all matters arising under the arbitration proceedings. Reliance is placed on Reliance Industries Ltd. v. Union of India (supra) [followed in Union of India v. Reliance Industries (supra), Balco (supra) and Prima Buildwell Ltd. v. Lost City Developments LLC (supra)].
(xiii) Designation of the seat of arbitration is important for determining the Court that would have supervisory jurisdiction over the contract or the arbitration proceedings. More importantly, it will determine the Court in which the challenge to the Award can be entertained. It is inconceivable that the supervisory Court can 'shift' or 'change'. If the plea of Antrix were to be accepted, it would shift the supervisory Court from Delhi to Bangalore. This would be contrary to the law laid down in Balco (supra) that only the 'Seat Court' has jurisdiction to entertain a challenge to an Award. Reliance is placed on the decisions in B.E. Simoes Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd. (supra) State of West Bengal v. Associated Contractors (supra) and Swastik Gases Pvt. Ltd. v. IOCL (supra).
(xiv) By virtue of Article 20(b) of the Agreement dated 28th January, 2005 and in view of the definition of 'Court' under Section 2(1)(e) of the Act, the Courts in Delhi alone were to have the exclusive jurisdiction to entertain and decide any questions forming the subject matter of the present Agreement. Reliance was placed on the decisions in Ansaldo Caldaie Boilers India Private Limited v. NAGAI Power Private Limited 2015 SCC On Line Bom 7244 and Reliance Infrastructure Ltd. v. Roadway Solution (I) Pvt. Ltd. 2016 SCC OnLine Bom 16.
"42. Jurisdiction. —Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court."
"7.1 The jurisdiction as referred to under Section 42 of the Arbitration and Conciliation Act, 1996, would only mean that the Court which entertain[s] the first application must have jurisdiction. In other words, Section 42 of the Act cannot be invoked unless the party, who raises the plea of jurisdiction demonstrate[s] that the Court which entertained the first application has got the jurisdiction.
7.2 The further fact that the arbitration agreement has been entered into between the parties, is not in dispute. Mere filing of an application before a Court by itself will not oust the jurisdiction. It other words, by merely filing an application before any Court, the bar under Section 42 cannot be extended, when another application is filed by a party before another Court, which has got jurisdiction. Therefore, a party, who raises the plea of lack of jurisdiction, will have to establish the fact that the Court, which entertains the first application at the earliest point of time, has got jurisdiction...
The object and intend enshrined in the Arbitration and Conciliation Act, 1996, is to avoid multiplicity of proceedings and the Forum shopping at the instance of one of the parties to an arbitral agreement. It can only be applied when the first application filed is before a Court of competent jurisdiction and thereafter, the second application is filed by either of parties to avoid the jurisdiction of the Court, which entertain the said earlier application."
"6.... It is only when the basic ingredient for filing of the arbitration proceedings before the Court of competent jurisdiction is satisfied that the bar contemplated under Section 42 of the Act can be enforced against the maintainability of a petition before another Court."
"96.... We are of the opinion, the term "subject-matter of the arbitration" cannot be confused with "subject-matter of the suit". The term "subject-matter" in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the Courts having supervisory control over the arbitration proceedings. Hence, it refers to a Court which would essentially be a Court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two Courts i.e. the Court which would have jurisdiction where the cause of action is located and the Courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the Courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the Courts of Delhi being the Courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the Courts would have jurisdiction i.e. the Court within whose jurisdiction the subject-matter of the suit is situated and the Courts within the jurisdiction of which the dispute resolution i.e. arbitration is located.
97. The definition of Section 2(1)(e) includes "subject matter of the arbitration" to give jurisdiction to the Courts where the arbitration takes place, which otherwise would not exist. On the other hand, Section 47 which is in Part/I of the 'Arbitration Act, 1996 dealing with enforcement of certain foreign awards has defined the term "Court" as a Court having jurisdiction over the subject-matter of the award. This has a clear reference to a Court within whose jurisdiction the asset/person is located, against Which/whom the enforcement of the international arbitral award is sought. The provisions contained in Section 2(1)(e) being purely jurisdictional in nature can have no relevance to the question whether Part I applies to arbitrations which take place outside India."
(i) to restrain Devas from proceeding with the ICC arbitration;
(ii) to restrain Devas from getting the Agreement dated 28th January 2005 modified/substituted from ICC;
(iii) to restrain the AT constituted by the ICC under ICC Rules from proceeding with the arbitration.
|Prayers in AA 483/2011 in the City Civil Court at Bangalore under S. 9||Prayers in the application in the S. 11 petition in the Supreme Court|
|i. restrain Devas from proceeding in any manner, with the ICC Arbitration contrary to the Agreement dated 28th January 2005;||i. restrain Devas from proceeding in any manner, with the ICC Arbitration contrary to the Agreement dated 28th January 2005;|
|ii. restrain Devas from getting the Agreement dated 28th January 2005 modified/substituted from ICC.||i. restrain Devas from proceeding in any manner, with the ICC Arbitration contrary to the Agreement dated 28th January 2005;|
|iii. restrain the AT constituted by ICC under ICC Rules from proceeding with the arbitration.||iii. restrain Devas from getting the Agreement dated 28th January 2005 modified/substituted from ICC.|
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