Delve into the detailed legal analysis presented by the court in the jurisdictional matter concerning the conferment of authority on Commercial Courts to handle arbitration disputes. The judgment scrutinizes the provisions of the Arbitration Act and the Commercial Courts Act, highlighting the challenge of conflicting views among High Courts on this issue. Stay informed on the nuances of commercial dispute resolution and the hierarchy of judicial bodies as per the prevailing legislations.
Facts
- State Government established Courts of Civil Judge (Senior Division) as Commercial Courts under the Act, 2015.
- Appellants challenged this designation through writ petitions in the High Court.
- Appellants initially filed proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 in the District Court.
- Proceedings were transferred to the newly established Commercial Court (Civil Judge, Senior Division) due to the notification.
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Issue
- The issue in the present appeal is whether the State Government can confer jurisdiction to hear applications under Sections 9, 14, and 34 of the Arbitration and Conciliation Act, 1996, upon Commercial Courts subordinate to the rank of Principal Civil Judge in the District, going against the provisions of Section 2(1)(e) of the Arbitration Act.
- Relevant provisions of the Arbitration Act, 1996, and the Commercial Courts Act, 2015 need to be referred to, including Section 2(1)(e) of the Arbitration Act and Sections 3, 10, 15, and 21 of the Commercial Courts Act, 2015.
- Analysis of the definition of ‘Court’ under Section 2(1)(e) of the Arbitration Act and the constitution of Commercial Courts under Sections 3, 10, 15, and 21 of the Commercial Courts Act, 2015 is essential in determining the jurisdictional issue.
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Arguments
- Section 2(1)(e) of the Arbitration Act excludes inferior courts from jurisdiction.
- Dispute related to arbitration is considered a commercial dispute under the Commercial Courts Act.
- The objective of the Arbitration Act is speedy disposal with minimal court interference.
- Commercial Courts Act, being a later Act, prevails for arbitration matters under Section 10.
- Conflicting views exist among High Courts regarding the priority of the Arbitration Act over the Commercial Courts Act.
- The Arbitration Act is considered a special and exhaustive code, prevailing over the Commercial Courts Act.
- Designating Civil Judges as Commercial Courts may lead to challenges in High Courts, defeating the purpose of speedy disposal.
- Legislature enacted the Commercial Courts Act, 2015 for speedy resolution of commercial disputes.
- Conflict between Section 3 of the Commercial Courts Act and Section 2(1)(e) of the Arbitration Act is highlighted.
- Decision does not imply that all provisions of the Arbitration Act prevail over the Commercial Courts in case of conflict
- The decision in BGS SGS SOMA JV case is not applicable to the present case as Section 13(1) of the Commercial Courts Act does not provide an independent right of appeal
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Analysis
- The Law Commission recommended the constitution of Commercial Divisions in High Courts for fast disposal of high-value commercial disputes.
- The Commercial Courts Act, 2015 was introduced to provide speedy resolution of commercial disputes, including arbitration proceedings.
- The Act specifically confers jurisdiction on Commercial Divisions in High Courts for arbitration matters.
- All applications or appeals arising from arbitration under the Arbitration and Conciliation Act, 1996, are to be heard by the Commercial Division of the High Court if constituted.
- The Act prevails over any other inconsistent laws, ensuring all commercial disputes, including arbitration disputes, are heard in Commercial Courts when constituted.
- The Act establishes a hierarchy for the resolution of commercial disputes with specific provisions for different types of arbitrations.
- All suits and applications relating to a commercial dispute of a Specified Value pending in a High Court with a Commercial Division shall be transferred to the Commercial Division.
- The Commercial Division may hold case management hearings to ensure speedy disposal of the suit or application.
- The court may prescribe new timelines for filing written statements as necessary.
- If a suit or application is not transferred, the Commercial Appellate Division may withdraw and transfer it to the appropriate Commercial Division or Court.
- The Act has an overriding effect over any other inconsistent laws or instruments.
- Jurisdiction for commercial disputes is specified based on consultation with the High Court and State Government.
- Commercial Courts may be constituted at the District level as deemed necessary.
- Provisions of the Act apply to procedures not completed at the time of transfer.
- State Government may specify pecuniary value for jurisdiction over Commercial Courts.
- Sections 3 & 10 of Act, 2015 are in consonance with the same view.
- The High Court’s decision aligns with the interpretation of these sections.
- The judgment agrees with the High Court’s stance on this matter.
Decision
- Appeals have failed and are dismissed
- No order as to costs
Case Title: JAYCEE HOUSING PVT. LTD. Vs. REGISTRAR (GENERAL), ORISSA HIGH COURT, CUTTACK (2022 INSC 1119)
Case Number: C.A. No.-006876-006876 / 2022
