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Petition To set aside Arbitral Award lies before High Court only when it possesses Original Civil Jurisdiction rules Supreme Court

Petition To set aside Arbitral Award lies before High Court only when it possesses Original Civil Jurisdiction rules Supreme Court

The Supreme Court on Monday held that a petition to set aside an arbitration award is only maintainable before a High Court if it has original civil jurisdiction.

The division bench of Justices MR Shah and MM Sundresh held In the absence of the High Court of Orissa having original jurisdiction, the concerned District Court can be said to be `Court’ and, therefore, the proceedings under Section 34 of the Arbitration Act against the award passed by the Arbitrator shall lie before the concerned District Court, as defined under Section 2(e) of the 2 Arbitration Act. In that view of the matter, the High Court has not committed any error in passing the impugned judgment and order and remanding the matter to the concerned District Court/Court to decide Section 34 application in accordance with law and on its own merits.

The court further observed the definition of “Court” under Section 2(e) of the Arbitration and Conciliation Act stating that "in the case of arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in the 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 the arbitration if the same had been the subject-matter of the arbitration if the same had been the Section 34 of the Act allows for judicial review of an arbitral award.

“2(e) “Court” means- 

(i) in the case of arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in the 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 from decrees of courts subordinate to that High Court;”

In this case, a petition was filed with the District Court concerned under Section 34 of the Arbitration and Conciliation Act. This petition was dismissed because the order appointing the arbitrator under section 11(6) was a judicial order, and section 42 required the appeal to be filed in the Court where the application was made. The appeal against this order was allowed by the Orissa High Court, and the petition was remanded to the District Court.

Case Title: Yashpal Chopra vs. Union of India

SLP(C) 18324/2022

Read the Complete order on the following link:-

https://main.sci.gov.in/supremecourt/2022/23197/23197_2022_6_10_39226_Order_31-Oct-2022.pdf

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