Himachal Pradesh High Court
The Chief General Manager vs Sh. Kashmir Singh (Government … on 2 January, 2025
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Arb. Case No. 581 of 2023 a/w
Arb. Case Nos. 582 to 584 of 2023
Reserved on: December 13 , 2024
Decided on: January 2 , 2025
1. Arb. Case No. 581 of 2023
The Chief General Manager
H.P. Telecom Circle & ors. …Petitioners
Versus
Sh. Kashmir Singh (Government Contractor) …Respondent
2. Arb. Case No. 582 of 2023
Sh. Kashmir Singh (Government Contractor)
…Petitioner
Versus
The Chief General Manager
H.P. Telecom Circle & ors. …Respondents
3. Arb. Case No. 583 of 2023
Sh. Kashmir Singh (Government Contractor)
…Petitioner
Versus
The Chief General Manager
H.P. Telecom Circle & ors. …Respondents
4. Arb. Case No. 584 of 2023
The Chief General Manager
H.P. Telecom Circle & ors. …Petitioners
Versus
Sh. Kashmir Singh (Government Contractor) …Respondent
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2
Coram:
Ms. Justice Jyotsna Rewal Dua, Judge
1
Whether approved for reporting? Yes.
For the petitioner : Mr. Navlesh Verma, Advocate, for the
petitioner(s) in Arb. Case Nos. 581 and 584 of
2023.
Mr. H.S. Rangra, Advocate, for the petitioner(s)
in Arb. Case Nos. 582 and 583 of 2023.
For the respondents : Mr. H.S. Rangra, Advocate, for the
respondent(s) in Arb. Case Nos. 581 and 584
2023
Mr. Navlesh Verma, Advocate, for the
respondent(s) in Arb. Case Nos. 582 and 583
of 2023.
Jyotsna Rewal Dua, Judge
Background of the case
A dispute arose between Sh. Kashmir Singh, a
Government Contractor and the Telecom Department in relation to
two works awarded to him in Division Mandi Himachal Pradesh. Sh.
Kashmir Singh moved two Arbitration Case Nos. 37 & 38 of 2019
under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in
short ‘the Act’) for appointment of arbitrator. Considering total value
of claim in both cases at around Rs. 11 lacs, a learned Advocate
was appointed as arbitrator for deciding both the claims. The
arbitrator entered into the references and passed separate awards
in two cases on 11.11.2022 directing the Telecom Department to
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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3pay Rs. 4,40,521/- alongwith interest @ 6% p.a. from the date of
filing of the claim petition in one claim and Rs. 2,26,554/- in the other
alongwith interest @ 6% p.a. from the date of filing of the claim
petition. Respondents were also directed to refund the security
amount within 30 days failing which interest @ 6% p.a. was
chargeable. Sh. Kashmir Singh filed objections under Section 34 of
the Act before the learned District Judge, Mandi. Learned District
Judge considered the provisions of Section 2(1)(e), Section 11 &
Section 42 of the Act, judicial precedents of various Hon’ble High
Courts & Hon’ble Supreme Court and held that arbitrator was
appointed by the High Court of Himachal Pradesh, which is vested
with original civil jurisdiction, therefore, it will fall within the definition
of ‘Court’ under Section 2(i)(e), hence by virtue of Section 42 of the
Act, all subsequent applications are required to be filed before the
High Court and not before the District Court. Accordingly learned
District Judge held that it did not have jurisdiction to entertain the
objections filed by Sh. Kashmir Singh. Objections were ordered to be
returned to him for presentation before the appropriate Court i.e. this
Court. Learned District Judge had also observed that all arbitration
proceedings were conducted at Shimla, therefore, the District Judge
Mandi will have no jurisdiction to entertain the objections.
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4Consequently, these objections i.e. Arbitration Case Nos.
582 & 583 of 2023 have been filed by Sh. Kashmir Singh under
Section 34 of the Act challenging the awards passed by the learned
arbitrator on 11.11.2022. Counter Arbitration Case Nos. 581 & 584
of 2023 have been filed by the Telecom Department assailing the
same awards passed by the learned arbitrator.
2. The Point involved
Before embarking upon merits of the objections, the first
question that needs addressing is: Whether upon appointment of
arbitrator under Section 11(6) of the Act by the High Court more
particularly where the High Court also exercises original civil
jurisdiction, the objections against the award are to be filed before
the High Court or the District Judge.
In the instant case, applications under Section 11(6) of the
Act were moved by Sh. Kashmir Singh in this Court seeking
appointment of arbitrator in Arbitration Case Nos. 37 & 38 of 2019.
Sole arbitrator was appointed by the High Court on 02.08.2019. So
whether the High Court which also exercises original civil jurisdiction
has exclusive jurisdiction to entertain objections under Section 34 of
the Act, is the point to be delved upon. Learned Counsel for the
parties have been heard accordingly.
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5
2(i). Legal Provisions
Sections 42, 2(1)(e) & 11 of the Act have bearing on the
question concerned:-
2(i)(a) “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.”
Section 42 starts with a non-obstante clause i.e.
‘notwithstanding anything contained elsewhere in this Part or in any
other law for the time being in force’. The words ‘this Part’ refers to
Part-I which encompasses Sections 1 – 43. As per Section 42,
where an application with respect to an arbitration agreement under
Part-I has been made to a Court then that Court alone will have the
jurisdiction over (a) arbitral proceedings & (b) all subsequent
applications arising out of that agreement and the arbitral
proceedings shall be made in that Court and in no other Court.
2(i)(b) ‘Court’ has been defined in Section 2(1)(e) of the Act to
mean:-
2(1)(e) “Court” means –
“(i) in the case of an arbitration other than international
commercial arbitration, the principal Civil Court of original
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6jurisdiction in a district, and includes 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, 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;”
2(1)(c) Section 11 of the Act pertains to appointment of
arbitrators. Relevant portion of this Section is as follows:-
’11. Appointment of arbitrators.–(1) A person of any nationality
may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a
procedure for appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an
arbitration with three arbitrators, each party shall appoint one
arbitrator, and the two appointed arbitrators shall appoint the
third arbitrator who shall act as the presiding arbitrator.
(3A) The Supreme Court and the High Court shall have the
power to designate, arbitral institutions, from time to time, which
have been graded by the Council under Section 43-I, for the
purposes of this Act:
Provided that in respect of those High Court jurisdictions,
where no graded arbitral institution are available, then, the
Chief Justice of the concerned High Court may maintain a panel
of arbitrators for discharging the functions and duties of arbitral
institution and any reference to the arbitrator shall be deemed
to be an arbitral institution for the purposes of this section and
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7the arbitrator appointed by a party shall be entitled to such fee
at the rate as specified in the Fourth Schedule:
Provided further that the Chief Justice of the concerned High
Court may, from time to time, reviews the panel of arbitrators.
(4) If the appointment procedure in sub-section (3) applies
and–
(a) a party fails to appoint an arbitrator within thirty days
from the receipt of a request to do so from the other
party; or
(b) the two appointed arbitrators fail to agree on the third
arbitrator within thirty days from the date of their
appointment,
the appointment shall be made, on an application of the party,
by the arbitral institution designated by the Supreme Court, in
case of international commercial arbitration, or by the High
Court, in case of arbitrations other than international
commercial arbitration, as the case may be.
(5) Failing any agreement referred to in sub-section (2), in an
arbitration with a sole arbitrator, if the parties fail to agree on the
arbitrator within thirty days from receipt of a request by one
party from the other party to so agree the appointment shall be
made on an application of the party in accordance with the
provisions contained in sub-section (4).
(6) Where, under an appointment procedure agreed upon by the
parties,–
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach
an agreement expected of them under that procedure; or
(c) a person, including an institution, fails to perform any
function entrusted to him or it under that procedure,
The appointment shall be made, on an application of the party,
by the arbitral institution designated by the Supreme Court, in
case of international commercial arbitration, or by the High
Court, in case of arbitrations other than international commercial
arbitration, as the case may be to take the necessary measures,
unless the agreement on the appointment procedure provides
other means for securing the appointment.
(6A) xxx xxx
(6B) The designation of any person or institution by the
Supreme Court or, as the case may be, the High Court, for the
purposes of this section shall not be regarded as a delegation of
judicial power by the Supreme Court or the High Court.
(7) - 11(A) xxx xxx"
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8
2(ii) Comparison of Section 11(6) as it stood before and after
the amendment of the Arbitration and Conciliation Act, 1996 on
23.10.2015 (by Act 3 of 2016) , may first be noticed:-
Section 11(6) before 2015 amendment. Section 11(6) after 2015 amendment.
(6) Where, under an appointment (6) Where, under an appointment procedure agreed upon by the procedure agreed upon by the parties,-- parties,-- (a) a party fails to act as required (a) a party fails to act as required under that procedure; or under that procedure; or (b) the parties, or the two appointed (b) the parties, or the two appointed arbitrators, fail to reach an arbitrators, fail to reach an agreement expected of them under agreement expected of them under that procedure; or that procedure; or
(c) a person, including an institution, (c) a person, including an institution,
fails to perform any function fails to perform any function
entrusted to him or it under that entrusted to him or it under that
procedure, procedure,
a party may request the Chief the appointment shall be made, on
Justice or any person or institution an application of the party, by the
designated by him to take the arbitral institution designated by the
necessary measure, unless the Supreme Court, in case of
agreement on the appointment international commercial arbitration,
procedure provides other means for or by the High Court, in case of
securing the appointment. arbitrations other than international
commercial arbitration, as the case
may be to take the necessary
measures, unless the agreement on
the appointment procedure provides
other means for securing the
appointment.
The words ‘Chief Justice’ existing in Section 11 (4), (5) &
(6) were substituted with ‘Supreme Court’ or, as the case may the
‘High Court’. The other provisions of Section 11 were also amended
accordingly.
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9
Use of the words ‘High Court’ in Section 11(6) of the Act
instead of ‘Chief Justice’ has given rise to the question in the
present case that when the appointment of the arbitrator is not by
the Chief Justice but by the High Court of Himachal Pradesh and
incidentally this High Court exercises original civil jurisdiction and
falls within the definition of ‘Court’ under Section 2(1)(e) then by
virtue of Section 42 of the Act, objections challenging the arbitral
award should also be filed before this Court.
3. Legal Position
The question – Whether appointment of arbitrator by the
Chief Justice under the Act (prior to 2015 amendment) was an
administrative or judicial act came up for consideration in several
cases.
3(i). Konkan Railway Corpn. Ltd. & others vs. Mehul
Construction Co.2, held that order of appointment of arbitrator
passed under Section 11(6) was administrative in nature. The Chief
Justice does not function as a Court or a Tribunal. The said order
cannot be subjected to judicial scrutiny of the Supreme Court. The
nature of function performed by the Chief Justice being essentially
to aid, constitution of the Arbitral Tribunal cannot be held to be a
judicial function or otherwise legislature would have used the
2
(2000) 7 SCC 201
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10
words ‘Court’ or ‘a judicial authority’ instead of choosing the
expression ‘the Chief Justice or his nominee’. Relevant paras from
the judgment are as under:-
“4. … … In fact a Bench of this Court in
Sundaram Finance case3 while considering the scope of
Section 9 of the Act has approached the problem from this
perspective and incidental observation has been made that
Section 11 does not require the Court to pass a judicial order
appointing arbitrator. The nature and function performed by
the Chief Justice or his nominee under sub- section (6) of
Section 11 being essentially to aid the constitution of the
arbitral tribunal cannot be held to be a judicial function as
otherwise the legislature could have used the expression
‘court’ or ‘judicial authority’ instead of choosing the
expression ‘the Chief Justice or his nominee’. If a
comparison is made with the English Arbitration Act 1996 it
would appear that under the English Act it is the Court which
has been vested with the function of appointment of an
arbitrator upon failure of the agreed appointment procedure
and an order made by the Court becomes appealable under
Section 11(5) whereas under the Arbitration and Conciliation
Act of 1996 in India the power of appointment is vested with
the Chief Justice or his nominee.
5. An analysis of different sub-sections of Section 11
would indicate the character of the order, which the Chief
Justice or his nominee passes under Sub-section (6) of
Section 11. Sub-section (3) and sub-section (4) deals with
cases, in which a party fails to appoint an arbitrator or the
arbitrators fail to agree on the third arbitrator and thus seeks
3
(1999) 2 SCC 479
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11
to avoid frustration or unreasonable delay in the matter of
constitution of the arbitral tribunal. It authorises the Chief
Justice of India or the Chief Justice of a High Court
concerned, or any person or institution designated by him to
make the appointment upon request of a party, if the other
party has failed to appoint an arbitrator within thirty days
from the receipt of a request to that end. Sub-sections 4, 5
and 6 designedly use the expression ‘Chief Justice’ in
preference to a Court or other authority as in paragraphs (3)
and (4) of Article 11 of the Model Law, obviously for the
reason that the Chief Justice acting in his administrative
capacity, is expected to act quickly without encroaching on
the requirements that only competent persons are appointed
as arbitrators. Sub-section (4) does not lay down any time
limit within which the Chief Justice or his nominee,
designated by him, has to make the appointment. It however
expects that these functionaries would act promptly. While
sub-sections (4) and (5) deal with removal of obstacles
arising in the absence of agreement between the parties on
a procedure for appointing the arbitrator or arbitrators, sub-
section (6) seeks to remove obstacles arising when there is
an agreed appointment procedure. These obstacles are
identified in Clauses (a), (b) and (c) of sub-section(6). Sub-
section(6) provides a cure to these problems by permitting
the aggrieved party to request the Chief Justice or any
person or institution designated by him to take the necessary
measure i.e. to make the appointment, unless the agreement
on the appointment procedure provides other means for
securing the appointment. Sub-section(6), therefore, aims at
removing any dead-lock or undue delay in the appointment
process. This being the position, it is reasonable to hold
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12
that while discharging the functions under sub-
section(6), the Chief Justice or his nominee will be
acting in his administrative capacity and such a
construction would subserve the very object of the new
Arbitration Law.
6. The nature of the function performed by the Chief
Justice being essentially to aid the Constitution of the
Arbitration Tribunal immediately and the legislature having
consciously chosen to confer the power on the Chief Justice
and not a Court, it is apparent that the order passed by the
Chief Justice or his nominee is an administrative order, as
has been held by this Court in Ador Samia case4 and the
observations of this Court in Sundaram Finance Ltd.3 case
also is quite appropriate and neither of those decisions
require any re-consideration. This being the position even an
order refusing to appoint an arbitrator will not be amenable
to the jurisdiction of this Court under Article 136 of the
Constitution. Needless to mention such an order refusing to
appoint an arbitrator after deciding the contentious issues
would be an act of non-performance of duty and in view of
what has been stated earlier the concerned authority could
be directed by mandamus to perform its duty.”
3(ii) Konkan Railway Corpn. Ltd. & others2 was approved by
the Constitution Bench of the Apex Court in Konkan Railway
Corporation Ltd. & another vs. Rani Construction Pvt. Ltd.5 holding
that nature of function performed by the Chief Justice or his
nominee under Section 11(6) of the Act is purely administrative. It is
4
(1999) 8 SCC 572
5
(2002) 2 SCC 388
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13
neither judicial nor quasi judicial. No contentious issue can be
decided while performing functions under Section 11(6) of the Act.
3(iii) SBP & Co. vs. Patel Engineering Ltd. & another6,
overruled Konkan Railway Corporation Ltd. vs. Rani Construction
Pvt. Ltd.5. The majority decision held that under Section 11(6) there
are several preliminary matters to be determined by the Chief
Justice or his designate before appointment of an arbitrator viz.
Whether application for appointment of arbitrator has been moved
before the High Court having jurisdiction; Whether valid arbitration
agreement exists between the parties; Whether dispute between
the parties is arbitrable etc. For deciding these questions before
appointing arbitrator, the Chief Justice or his designate can proceed
either on the basis of affidavits or documents produced or take such
evidence as may be necessary. It was held that once the statute
creates an authority, confers on it power to adjudicate and makes its
decision final on matters to be decided by it, normally, that decision
cannot be said to be purely administrative though power to appoint
arbitrator is not conferred on the Supreme Court or the High Court
but on the Chief Justice of India or the Chief Justice of the High
Court. One possible reason for this is that conferment of power upon
the High Court would be governed by normal procedure of the Court
6
(2005) 8 SCC 618
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14
including right of appeal. However this situation is to be avoided
since object of the Act itself is to restrict interference by the Courts.
Therefore, power is conferred on highest judicial authority in the
country & in the states in their capacities as Chief Justices. But the
power so conferred is not as persona designata. The mere fact that
power is conferred upon Chief Justice and not on the Court presided
by him, would not mean that power conferred is only administrative
and not judicial. Relevant paragraphs of the judgment read as
under:-
“9. Normally, any tribunal or authority conferred with a
power to act under a statute, has the jurisdiction to satisfy
itself that the conditions for the exercise of that power
existed and that the case calls for the exercise of that power.
Such an adjudication relating to its own jurisdiction which
could be called a decision on jurisdictional facts, is not
generally final, unless it is made so by the Act constituting
the tribunal. Here, sub-section (7) of Section 11 has given a
finality to the decisions taken by the Chief Justice or any
person or institution designated by him in respect of matters
falling under sub-sections (4), (5) and (6) of Section 11.
Once a statute creates an authority, confers on it power to
adjudicate and makes its decision final on matters to be
decided by it, normally, that decision cannot be said to be a
purely administrative decision. It is really a decision on its
own jurisdiction for the exercise of the power conferred by
the statute or to perform the duties imposed by the statute.
Unless, the authority satisfies itself that the conditions for
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15exercise of its power exist, it could not accede to a request
made to it for the exercise of the conferred power. While
exercising the power or performing the duty under Section
11(6) of the Act, the Chief Justice has to consider whether
the conditions laid down by the section for the exercise of
that power or the performance of that duty, exist. Therefore,
unaided by authorities and going by general principals, it
appears to us that while functioning under Section 11(6) of
the Act, a Chief Justice or the person or institution
designated by him, is bound to decide whether he has
jurisdiction, whether there is an arbitration agreement,
whether the applicant before him, is a party, whether the
conditions for exercise of the power have been fulfilled and if
an arbitrator is to be appointed, who is the fit person, in
terms of the provision. Section 11(7) makes his decision on
the matters entrusted to him, final.
10. The very scheme, if it involves an adjudicatory
process, restricts the power of the Chief Justice to
designate, by excluding the designation of a non-judicial
institution or a non-judicial authority to perform the functions.
For, under our dispensation, no judicial or quasi-judicial
decision can be rendered by an institution if it is not a judicial
authority, court or a quasi-judicial tribunal. This aspect is
dealt with later while dealing with the right to designate
under Section 11(6) and the scope of that designation.
11. The appointment of an arbitrator against the
opposition of one of the parties on the ground that the Chief
Justice had no jurisdiction or on the ground that there was
no arbitration agreement, or on the ground that there was no
dispute subsisting which was capable of being arbitrated
upon or that the conditions for exercise of power under
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16Section 11(6) of the Act do not exist or that the qualification
contemplated for the arbitrator by the parties cannot be
ignored and has to be borne in mind, are all adjudications
which affect the rights of parties. It cannot be said that when
the Chief Justice decides that he has jurisdiction to proceed
with the matter, that there is an arbitration agreement and
that one of the parties to it has failed to act according to the
procedure agreed upon, he is not adjudicating on the rights
of the party who is raising these objections. The duty to
decide the preliminary facts enabling the exercise of
jurisdiction or power, gets all the more emphasized, when
sub-section (7) designates the order under sub-sections (4),
(5) or (6) a ‘decision’ and makes the decision of the Chief
Justice final on the matters referred to in that sub-Section.
Thus, going by the general principles of law and the
scheme of Section 11, it is difficult to call the order of
the Chief Justice merely an administrative order and to
say that the opposite side need not even be heard before the
Chief Justice exercises his power of appointing an arbitrator.
Even otherwise, when a statute confers a power or imposes
a duty on the highest judicial authority in the State or in the
country, that authority, unless shown otherwise, has to act
judicially and has necessarily to consider whether his power
has been rightly invoked or the conditions for the
performance of his duty are shown to exist.
…
13. It is common ground that the Act has adopted the
UNCITRAL Model Law on International Commercial
Arbitration. But at the same time, it has made some
departures from the model law. Section 11 is in the place of
Article 11 of the Model Law. The Model Law provides for the
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17
making of a request under Article 11 to “the court or other
authority specified in Article 6 to take the necessary
measure”. The words in Section 11 of the Act, are “the Chief
Justice or the person or institution designated by him”. The
fact that instead of the court, the powers are conferred on
the Chief Justice, has to be appreciated in the context of the
statute. ‘Court’ is defined in the Act to be the principal civil
court of original jurisdiction of the district and includes the
High Court in exercise of its ordinary original civil jurisdiction.
The principal civil court of original jurisdiction is normally the
District Court. The High Courts in India exercising
ordinary original civil jurisdiction are not too many. So in
most of the States the concerned court would be the District
Court. Obviously, the Parliament did not want to confer the
power on the District Court, to entertain a request for
appointing an arbitrator or for constituting an arbitral tribunal
under Section 11 of the Act. It has to be noted that under
Section 9 of the Act, the District Court or the High Court
exercising original jurisdiction, has the power to make
interim orders prior to, during or even post arbitration. It
has also the power to entertain a challenge to the award
that may ultimately be made. The framers of the statute
must certainly be taken to have been conscious of the
definition of ‘court’ in the Act. It is easily possible to
contemplate that they did not want the power under
Section 11 to be conferred on the District Court or the
High Court exercising original jurisdiction. The intention
apparently was to confer the power on the highest judicial
authority in the State and in the country, on Chief Justices of
High Courts and on the Chief Justice of India. Such a
provision is necessarily intended to add the greatest
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18
credibility to the arbitral process. The argument that the
power thus conferred on the Chief Justice could not even be
delegated to any other Judge of the High Court or of the
Supreme Court, stands negatived only because of the power
given to designate another. The intention of the legislature
appears to be clear that it wanted to ensure that the power
under Section 11(6) of the Act was exercised by the highest
judicial authority in the concerned State or in the country.
This is to ensure the utmost authority to the process of
constituting the arbitral tribunal.
…
18. It is true that the power under Section 11(6) of the Act
is not conferred on the Supreme Court or on the High Court,
but it is conferred on the Chief Justice of India or the Chief
Justice of the High Court. One possible reason for
specifying the authority as the Chief Justice, could be
that if it were merely the conferment of the power on the
High Court, or the Supreme Court, the matter would be
governed by the normal procedure of that Court,
including the right of appeal and the Parliament
obviously wanted to avoid that situation, since one of
the objects was to restrict the interference by Courts in
the arbitral process. Therefore, the power was conferred
on the highest judicial authority in the country and in
the State in their capacities as Chief Justices. They have
been conferred the power or the right to pass an order
contemplated by Section 11 of the Act. We have already
seen that it is not possible to envisage that the power is
conferred on the Chief Justice as persona designata.
Therefore, the fact that the power is conferred on the Chief
Justice, and not on the court presided over by him is not
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19
sufficient to hold that the power thus conferred is merely an
administrative power and is not a judicial power.”
The conclusions were summed up by the Hon’ble Court in
the following paragraph:-
“47. We, therefore, sum up our conclusions as follows:
i) The power exercised by the Chief Justice of the
High Court or the Chief Justice of India under
Section 11(6) of the Act is not an administrative
power. It is a judicial power.
ii) The power under Section 11(6) of the Act, in its
entirety, could be delegated, by the Chief Justice of
the High Court only to another judge of that court and
by the Chief Justice of India to another judge of the
Supreme Court.
iii) In case of designation of a judge of the High Court or
of the Supreme Court, the power that is exercised by
the designated, judge would be that of the Chief
Justice as conferred by the statute.
iv) The Chief Justice or the designated judge will have
the right to decide the preliminary aspects as
indicated in the earlier part of this judgment. These
will be, his own jurisdiction, to entertain the request,
the existence of a valid arbitration agreement, the
existence or otherwise of a live claim, the existence of
the condition for the exercise of his power and on the
qualifications of the arbitrator or arbitrators. The Chief
Justice or the judge designated would be entitled to
seek the opinion of an institution in the matter of
nominating an arbitrator qualified in terms of Section
11(8) of the Act if the need arises but the order
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20appointing the arbitrator could only be that of the
Chief Justice or the judge designate.
v) Designation of a district judge as the authority under
Section 11(6) of the Act by the Chief Justice of the
High Court is not warranted on the scheme of the Act.
vi) Once the matter reaches the arbitral tribunal or the
sole arbitrator, the High Court would not interfere with
orders passed by the arbitrator or the arbitral tribunal
during the course of the arbitration proceedings and
the parties could approach the court only in terms of
Section 37 of the Act or in terms of Section 34 of the
Act.
vii) Since an order passed by the Chief Justice of the
High Court or by the designated judge of that court is
a judicial order, an appeal will lie against that order
only under Article 136 of the Constitution of India to
the Supreme Court.
viii) There can be no appeal against an order of the
Chief Justice of India or a judge of the Supreme
Court designated by him while entertaining an
application under Section 11(6) of the Act.
ix) In a case where an arbitral tribunal has been
constituted by the parties without having recourse to
Section 11(6) of the Act, the arbitral tribunal will have
the jurisdiction to decide all matters as contemplated
by Section 16 of the Act.
x) Since all were guided by the decision of this Court in
Konkan Railway Corporation Ltd. and Anr. v. Rani
Construction Pvt. Ltd.5 and orders under Section
11(6) of the Act have been made based on the
position adopted in that decision, we clarify that
( 2025:HHC:305 )
21appointments of arbitrators or arbitral tribunals thus
far made, are to be treated as valid, all objections
being left to be decided under Section 16 of the Act.
As and from this date, the position as adopted in this
judgment will govern even pending applications under
Section 11(6) of the Act.
xi) Where District Judges had been designated by the
Chief Justice of the High Court under Section 11(6) of
the Act, the appointment orders thus far made by
them will be treated as valid; but applications if any
pending Page 1824 before them as on this date will
stand transferred, to be dealt with by the Chief Justice
of the concerned High Court or a Judge of that court
designated by the Chief Justice.
xii) The decision in Konkan Railway Corporation Ltd.
and Anr. v. Rani Construction Pvt. Ltd.5 is
overruled.”
3(iv) In Garhwal Mandal Vikas Nigam Ltd. Vs. Krishna Travel
Agency7, the contention raised before the Hon’ble Apex Court was
since the arbitrator had been appointed by the Apex Court, it alone
would have the jurisdiction to decide the objections against the
award. The answer given was that once an arbitrator is appointed
then the appropriate forum for filing and challenging the award will
be the Principal Civil Court of Original Jurisdiction. Parties will
have the right to move under Sections 34 and 37 of the Act
accordingly. In scheme of things if appointment is made by the
7
(2008) 6 SCC 741
( 2025:HHC:305 )
22
High Court or the Supreme Court, Principal Civil Court of Original
Jurisdiction remains the same as contemplated under Section
2(1)(e) of the Act. It was also observed that in case objections to the
award were to lie to High Court/Supreme Court that appointed the
arbitrator that would mean that in every case the High
Court/Supreme Court will become the Principal Civil Court of
Original Jurisdiction under Section 11(6) of the Act. A valuable right
of appeal will be lost. The expression ‘court’ used in Section 34 of
the Act will have to be understood ignoring the definition of ‘court’
in the Act.
The Apex Court also affirmed the view taken in State of
Goa vs. Western Builders8 that in case of appointment of arbitrator
by High Court under Section 11(6), the Principal Civil Court of
Original Jurisdiction remained the District Court and not the High
Court. If arbitrator is appointed by the Supreme Court, the
objections can be filed before the Principal Civil Court of Original
Jurisdiction as defined in Section 2(1)(e). It was also held that
converse position would result in depriving the party of its valuable
right to appeal under Section 37 of the Act. The Court also held that
it was not the intention of the Legislature to make the High Court as
Principal Civil Court of Original Jurisdiction when arbitrator is
8
(2006) 6 SCC 239
( 2025:HHC:305 )
23
appointed by the High Court under Section 11(6) of the Act. Once
an arbitrator is appointed then the appropriate forum for filing the
award and for challenging the same will be the Principal Civil Court
of Original Jurisdiction.
Relevant paragraphs of the judgment read as under:-
“8. Apart from these four cases, which have been brought
to our notice, the position of law is very clear that in case the
argument of learned counsel is accepted, that would mean
that in every case where this court passes an order, be it
on appeal, from the order passed by the High Court
under Section 11(6) of the Arbitration and Conciliation
Act, 1996, this court will become a Principal Civil Court
of Original Jurisdiction. If the argument is further taken to
its logical conclusion that would mean that the parties will
have to approach this Court by making an application under
Section 34 i.e. for setting aside the award. The expression
‘Court’ used in Section 34 of the Act will also have to be
understood ignoring the definition of ‘Court’ in the Act.
9. There is another facet of the problem. The party will
be deprived of the right to file an appeal under Section
37(i)(b) of the Arbitration and Conciliation Act. This means
that a valuable right of appeal will be lost. Therefore, in the
scheme of things, the submission of the learned counsel
cannot be accepted. Taking this argument to a further logical
conclusion, when the appointment is made by the High Court
under Section 11(6) of the Conciliation Act, then in that case,
in every appointment made by the High Court in exercise of
its power under Section 11 (6), the High Court will become
the Principal Civil Court of Original Jurisdiction, as defined in
( 2025:HHC:305 )
24Section 2(1)(e) of the 1996 Act. That is certainly not the
intention of the legislature. Once an arbitrator is
appointed then the appropriate forum for filing the
award and for challenging the same, will be the Principal
Civil Court of Original Jurisdiction. Thus, the parties will
have the right to move under Section 34 of the 1996 Act
and to appeal under Section 37 of the 1996 Act.
Therefore, in the scheme of things, if appointment is
made by the High Court or by this Court, the Principal
Civil Court of Original Jurisdiction remains the same as
contemplated under Section 2(1)(e) of the 1996 Act.
10. We further reiterate that the view taken by this Court
in National Aluminium Co. Ltd. Vs. Pressteel & Fabrications
(P) Ltd.9 and State of Goa vs. Western Builders8 is the
correct approach and we reaffirm the view that in case
any appointment of arbitrator is made by the High Court
under Section 11(6), the principal Civil Court of Original
Jurisdiction remains the District Court and not the High
Court. And likewise, if an appointment of the arbitrator is
made by this Court, in that case also, the objection can only
be filed before the Principal Civil Court of Original
Jurisdiction as defined in Section 2(1)(e) of the 1996 Act.
Thus, in this view of the matter, we hold that the plea raised
by learned counsel for the petitioner that this Court should
entertain the award given by the arbitrator appointed by this
Court and all objections to at should be disposed of by this
Court is inacceptable and consequently, the prayer made in
the application is rejected.”
9
(2004) 1 SCC 540
( 2025:HHC:305 )
25
3(v) In State of Maharashtra through Executive Engineer vs.
Atlanta Limited10, the Hon’ble Supreme Court considered Section
2(1)(e) of the Act and said that where the High Court exercised
ordinary civil jurisdiction over a district, the High Court will have
preference to the Principal Civil Court of Original Jurisdiction in that
district. In that case one party had moved under Section 34 before
the District Judge and the other party challenged the award before
the High Court. It was held that ‘Court’ for the purpose of Section 42
will be the High Court and not the District Court. Reasons assigned
inter alia were that firstly inclusion of the High Court in definition of
the ‘Court’ in Section 2(1)(e) would become nugatory if the above
conclusion was not accepted as the Principal Civil Court of Original
Jurisdiction would always be court lower in grade than the High
Court. Secondly, it is the superior court exercising orginal jurisdiction
which has been chosen to adjudicate the disputes arising out of
arbitration agreement. Relevant paragraphs of the judgments read
as under:-
“32. All the same, it is imperative for us to determine,
which of the above two courts which have been approached
by the rival parties, should be the one, to adjudicate upon
the disputes raised. For an answer to the controversy in
hand, recourse ought to be made first of all to the provisions10
(2014) 11 SCC 619
( 2025:HHC:305 )
26of the Arbitration Act. On the failure to reach a positive
conclusion, other principles of law, may have to be relied
upon. Having given out thoughtful consideration to the issue
in hand, we are of the view, that the rightful answer can be
determined from Section 2(1)(e) of the Arbitration Act, which
defines the term “Court”. We shall endeavour to determine
this issue, by examining how litigation is divided between a
High Court exercising “ordinary original civil jurisdiction”, and
the “principal civil court of original jurisdiction” in a district.
What needs to be kept in mind is, that the High Court of
Bombay is vested with “ordinary original civil jurisdiction”
over the same area, over which jurisdiction is also exercised
by the “principal Civil Court of original jurisdiction” for the
District of Greater Mumbai (i.e. the Principal District Judge,
Greater Mumbai). Jurisdiction of the above two courts on the
“ordinary original civil side” is over the area of Greater
Mumbai. Whilst examining the submissions advanced by the
learned counsel for the appellant under Section 15 of the
Code of Civil Procedure, we have already concluded, that in
the above situation, jurisdiction will vest with the High Court
and not with the District Judge. The aforesaid choice of
jurisdiction has been expressed in Section 2(1)(e) of the
Arbitration Act, without any fetters whatsoever.
33. It is not the case of the appellants before us, that
because of pecuniary dimensions, and/or any other
consideration(s), jurisdiction in the two alternatives
mentioned above, would lie with the Principal District Judge,
Greater Mumbai. Under the scheme of the provisions of the
Arbitration Act therefore, if the choice is between the High
Court (in exercise of its “ordinary original civil jurisdiction”) on
the one hand, and the “principal civil court of original
( 2025:HHC:305 )
27jurisdiction” in the District i.e. the District Judge on the other;
Section 2(1)(e) of the Arbitration Act has made the choice in
favour of the High Court. This in fact impliedly discloses a
legislative intent. To our mind therefore, it makes no
difference, if the “principal civil court of original
jurisdiction”, is in the same district over which the High
Court exercises original jurisdiction, or some other
district. In case an option is to be exercised between a
High Court (under its “ordinary original civil
jurisdiction”) on the one hand, and a District Court (as
“principal Civil Court of original jurisdiction”) on the
other, the choice under the Arbitration Act has to be
exercised in favour of the High Court.
34. In the present controversy also, we must choose the
jurisdiction of one of two courts i.e. either the “ordinary
original civil jurisdiction” of the High Court of Bombay; or the
“principal civil court of original jurisdiction” in District Thane
i.e. the District Judge, Thane. In view of the inferences
drawn by us, based on the legislative intent emerging out of
Section 2(1)(e) of the Arbitration Act, we are of the
considered view, that legislative choice is clearly in favour of
the High Court. We are, therefore of the view, that the
matters in hand would have to be adjudicated upon by the
High Court of Bombay alone.”
3(vi) In State of West Bengal & others vs. Associated
Contractors11, the question of law before the Hon’ble Supreme
Court was as to which Court will have the jurisdiction to entertain
and decide applications under Section 34 of the Act. Under Section
11
(2015) 1 SCC 32
( 2025:HHC:305 )
28
9 of the Act an interim order was passed by the High Court. In an
application under Section 11 of the Act, arbitrator was appointed to
adjudicate the dispute between the parties. An argument was raised
that by virtue of Section 42 of the Act it is only the High Court that
will have jurisdiction to decide the applications under Section 34 of
the Act. Hon’ble Apex Court held that definition of word ‘Court’ in
Section 2(1)(e) of the Act is exhaustive as the Section uses the
expression “means and includes”. Under this definition Principal Civil
Court of Original Jurisdiction or the High Court in exercise of its
original civil jurisdiction will be ‘Court’ as defined under Section
2(1)(e) of the Court. Apex Court also affirmed the view taken in State
of Maharashtra through Executive Engineer10 and held that the
expression ‘with respect to an arbitration agreement’ widens the
scope of Section 42 to include all matters which directly or indirectly
pertain to an arbitration agreement. Applications made to Courts
whether before, during or after arbitral proceedings, made under
Part-I of the Act, are all covered by Section 42. The essential
ingredient of the Section is that an application under Part-I must be
made in a ‘Court’. It was held that Section 11 applications are not to
be moved before the ‘court’ as defined but before the Chief Justice
either of the High Court or the Supreme Court, as the case may be,
or their delegates. This is despite the fact that the Chief Justice or
( 2025:HHC:305 )
29
his delegate has now to decide judicially and not administratively.
Section 42 would not apply to applications made before the Chief
Justice or his delegate for the simple reason that the Chief Justice or
his delegate is not ‘court’ as defined by Section 2(1)(e). The Chief
Justice does not represent the High Court. In contrast to
applications moved under Sections 8 and 11 of the Act, the
applications under Section 9 are moved to the ‘court’ for passing of
interim orders before or during arbitral proceedings or at any time
after the making of the arbitral award but before its enforcement.
Therefore, they attract Section 42 to preclude the making of all
subsequent applications under Part-I to any court except the court to
which an application has been made under Section 9 of the Act. The
Court gave following reasons for holing that when the Apex Court
appoints arbitrator it will not be construed as Court within the
meaning of Section 2(1)(e):–
“20. As noted above, the definition of “court” in Section
2(1)(e) is materially different from its predecessor contained
in Section 2(c) of the 1940 Act. There are a variety of
reasons as to why the Supreme Court cannot possibly
be considered to be “court” within the meaning of
Section 2(1)(e) even if it retains seisin over the arbitral
proceedings. Firstly, as noted above, the definition is
exhaustive and recognizes only one of two possible courts
that could be “court” for the purpose of Section 2(1)(e).
( 2025:HHC:305 )
30Secondly, under the 1940 Act, the expression “civil court”
has been held to be wide enough to include an appellate
court and, therefore would include the Supreme Court as
was held in the two judgments aforementioned under the
1940 Act. Even though this proposition itself is open to
doubt, as the Supreme Court exercising jurisdiction under
Article 136 is not an ordinary Appellate Court, suffice it to
say that even this reason does not obtain under the present
definition, which speaks of either the Principal Civil Court or
the High Court exercising original jurisdiction. Thirdly, if an
application would have to be preferred to the Supreme Court
directly, the appeal that is available so far as applications
under Sections 9 and 34 are concerned, provided for under
Section 37 of the Act, would not be available. Any further
appeal to the Supreme Court under Article 136 would also
not be available. The only other argument that could possibly
be made is that all definition sections are subject to context
to the contrary. The context of Section 42 does not in any
manner lead to a conclusion that the word “court” in Section
42 should be construed otherwise than as defined. The
context of Section 42 is merely to see that one court alone
shall have jurisdiction over all applications with respect to
arbitration agreements which context does not in any
manner enable the Supreme Court to become a “court”
within the meaning of Section 42. It has aptly been stated
that the rule of forum conveniens is expressly excluded by
section 42. See: JSW Steel Ltd. vs. Jindal Praxair Oxygen
Co.Ltd., (2006) 11 SCC 521 at para 59. Section 42 is also
markedly different from Section 31(4) of the 1940 Act in that
the expression “has been made in a court competent to
entertain it” does not find place in Section 42. This is for the
( 2025:HHC:305 )
31
reason that, under Section 2(1)(e), the competent Court is
fixed as the Principal Civil Court exercising original
jurisdiction or a High Court exercising original civil
jurisdiction, and no other court. For all these reasons, we
hold that the decisions under the 1940 Act would not obtain
under the 1996 Act, and the Supreme Court cannot be
“court” for the purposes of Section 42.”
It was also held that Section 42 applies to all proceedings
with respect to arbitration agreements including the applications
made after the final award as under:-
“21. One other question that may arise is as to whether
Section 42 applies after the arbitral proceedings come to an
end. It has already been held by us that the expression “with
respect to an arbitration agreement” are words of wide
import and would take in all applications made before during
or after the arbitral proceedings are over. In an earlier
judgment, Kumbha Mawji v. Dominion of India, AIR 1953 SC
313, the question which arose before the Supreme Court
was whether the expression used in Section 31(4) of the
1940 Act “in any reference” would include matters that are
after the arbitral proceedings are over and have culminated
in an award. It was held that the words “in any reference”
cannot be taken to mean “in the course of a reference”, but
mean “in the matter of a reference” and that such phrase is
wide enough and comprehensive enough to cover an
application made after the arbitration is completed and the
final Award is made. (See Paras 317-18). As has been
noticed above, the expression used in Section 42 is wider
( 2025:HHC:305 )
32
being “with respect to an arbitration agreement” and would
certainly include such applications.”
Following conclusions were drawn by the Court:-
“25. Our conclusions therefore on Section 2(1)(e) and
Section 42 of the Arbitration Act, 1996 are as follows:
(a) Section 2(1)(e) contains an exhaustive definition
marking out only the Principal Civil Court of
Original Jurisdiction in a district or a High Court
having original civil jurisdiction in the State, and
no other court as “court” for the purpose of Part-I
of the Arbitration Act, 1996.
(b) The expression “with respect to an arbitration
agreement” makes it clear that Section 42 will
apply to all applications made whether before or
during arbitral proceedings or after an Award is
pronounced under Part-I of the 1996 Act.
(c) However, Section 42 only applies to applications
made under Part-I if they are made to a court as
defined. Since applications made under Section 8
are made to judicial authorities and since
applications under Section 11 are made to the
Chief Justice or his designate, the judicial
authority and the Chief Justice or his designate
not being court as defined, such applications
would be outside Section 42.
(d) Section 9 applications being applications made to a
court and Section 34 applications to set aside arbitral
awards are applications which are within Section 42.
(e) In no circumstances can the Supreme Court be
“court” for the purposes of Section 2(1)(e), and
( 2025:HHC:305 )
33whether the Supreme Court does or does not
retain seisin after appointing an Arbitrator,
applications will follow the first application made
before either a High Court having original
jurisdiction in the State or a Principal Civil court
having original jurisdiction in the district as the
case may be.
(f) Section 42 will apply to applications made after the
arbitral proceedings have come to an end provided
they are made under Part-I.
(g) If a first application is made to a court which is neither
a Principal Court of original jurisdiction in a district or a
High Court exercising original jurisdiction in a State,
such application not being to a court as defined would
be outside Section 42. Also, an application made to a
court without subject matter jurisdiction would be
outside Section 42.
The reference is answered accordingly.”
3(vii). Emm Enn Associates vs. Commander Works Engineer &
others12 relied upon SBP & Co. Vs. Patel Engg. Ltd. Case6 to hold
that exercise of power under Section 11(6) is judicial in nature;
While exercising this power, the Chief Justice can examine whether
the claim is live and needs to be adjudicated. In cases of stale
claims the applications can be rejected.
4. Learned Counsel for the claimant – Sh. Kashmir Singh
falls back upon State of Maharashtra through Executive Engineer
12
(2016) 13 SCC 61
( 2025:HHC:305 )
34
vs. Atlanta Ltd. Case10 to support the order passed by the learned
District Judge and submits that this High Court exercises ordinary
original Civil jurisdiction. The arbitrator was appointed by this Court.
Between the High Court that exercises original civil jurisdiction and
the Principal Civil Court of Original Jurisdiction, the choice is to be
exercised in favour of the High Court for filing the objections against
the award passed by the arbitrator as it would make no difference if
the Principal Civil Court of Original Jurisdiction is in the same
district over which the High Court exercises original jurisdiction or
some other district. Learned Counsel for the claimant also pressed
into service the amendment of Section 11(6) under Act 3 of 2016
that came into force w.e.f. 23.10.2015 and replaced the words
‘Chief Justice’ with ‘High Court’ in case of other than international
commercial arbitration as under:-
“(6) Where, under an appointment procedure agreed upon
by the parties,–
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to
reach an agreement expected of them under that
procedure; or
(c) a person, including an institution, fails to perform any
function entrusted to him or it under that procedure,
The appointment shall be made, on an application of the
party, by the arbitral institution designated by the Supreme
Court, in case of international commercial arbitration, or by
the High Court, in case of arbitrations other than
( 2025:HHC:305 )
35international commercial arbitration, as the case may be to
take the necessary measures, unless the agreement on the
appointment procedure provides other means for securing
the appointment.”
Learned Counsel for the Telecom Department outlined the
development of law on the subject and contended that in the instant
cases it is the Principal Civil Court of Original Jurisdiction that ought
to have decided the objections against the arbitral award and
prayed for setting aside the judgments passed by the learned
District Judge. It was submitted that Telecom Department filed its
two Arbitration Cases bearing Nos. 581 & 584 of 2023 in this Court
only to avoid conflicting orders and in light of impugned orders
passed by the learned District Judge.
5. Consideration
5(i). It was by way of Act 3 of 2016 that the words ‘Chief Justice
or any person or institution designated by him’ in Section 11(6) of
the Act were substituted by the words ‘Supreme Court’, or as the
case may be, the ‘High Court’, or any person or institution
designated by such Court’.
It would be appropriate to first examine the reasons for
amending Section 11(6) of the Arbitration and Conciliation Act, 1996
by Act 3 of 2016. Report No. 246 of the Law Commission of India,
( 2025:HHC:305 )
36
the basis for amending the Arbitration and Conciliation Act 1996 by
the Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016)
would be a relevant factor.
5(i)(a) In para-24 of the report, the Commission proposed
changing the existing scheme of power of appointment being
vested in the ‘Chief Justice’ to the ‘High Court’ & the ‘Supreme
Court’ and clarified that delegation of power of appointment (as
opposed to a finding regarding the existence/nullity of the arbitration
agreement) shall not be regarded as a judicial act. This was
proposed to rationalize the law and provide greater incentive for the
High Court and/or Supreme Court to delegate the power of
appointment (being a non-judicial act) to specialized, external
persons or institutions. The Commission further recommended
amendment of Section 11(7) so that the decisions of the High Court
regarding existence/nullity of the arbitration agreement are final
where the arbitrator has been appointed and as such are non-
appealable. Para of the report relevant to the context reads as
under:-
“24. Two further sets of amendments have been proposed
in this context. First, it is observed that a lot of time is spent
for appointment of arbitrators at the very threshold of
arbitration proceedings as applications under section 11 are
kept pending for many years. In this context, the
( 2025:HHC:305 )
37Commission has proposed a few amendments. The
Commission has proposed changing the existing scheme of
the power of appointment being vested in the “Chief Justice”
to the “High Court” and the “Supreme Court” and has
expressly clarified that delegation of the power of
“appointment” (as opposed to a finding regarding the
existence/nullity of the arbitration agreement) shall not be
regarded as a judicial act. This would rationalize the law and
provide greater incentive for the High Court and/or Supreme
Court to delegate the power of appointment (being a non-
judicial act) to specialized, external persons or institutions.
The Commission has further recommended an amendment
to section 11 (7) so that decisions of the High Court
(regarding existence/nullity of the arbitration agreement) are
final where an arbitrator has been appointed, and as such
are non-appealable. The Commission further proposes the
addition of section 11 (13) which requires the Court to make
an endeavor to dispose of the matter within sixty days from
the service of notice on the opposite party.”
5(i)(b). The Law Commission also took note of SBP & Co. Vs.
Patel Engineering Ltd. Case6 wherein power to appoint an arbitrator
under Section 11 had been held to be judicial power and also the
law laid down in National Insurance Co. Ltd. Vs. Boghara Polyfab
Pvt. Ltd.13, as under:-
“30. After a series of cases culminating in the decision in
SBP v Patel Engineering, (2005) 8 SCC 618, the Supreme
Court held that the power to appoint an arbitrator under13
(2009) 1 SCC 267
( 2025:HHC:305 )
38section 11 is a “judicial” power. The underlying issues in this
judgment, relating to the scope of intervention, were
subsequently clarified by Raveendran J. in National
Insurance Co. Ltd. v Boghara Polyfab Pvt. Ltd., (2009) 1
SCC 267, where the Supreme Court laid down as follows –
“1. The issues (first category) which Chief Justice/his
designate will have to decide are:
(a) Whether the party making the application has
approached the appropriate High Court?
(b) Whether there is an arbitration agreement and whether
the party who has applied under section 11 of the Act, is
a party to such an agreement?
2. The issues (second category) which the Chief Justice/his
designate may choose to decide are:
(a) Whether the claim is a dead (long barred) claim or a live
claim?
(b) Whether the parties have concluded the
contract/transaction by recording satisfaction of their
mutual rights and obligation or by receiving the final
payment without objection?
3. The issues (third category) which the Chief Justice/his
designate should leave exclusively to the arbitral tribunal
are:
(a) Whether a claim falls within the arbitration clause (as
for example, a matter which is reserved for final
decision of a departmental authority and excepted or
excluded from arbitration)?
(b) Merits of any claim involved in the arbitration.”
The Law Commission recommended amending Sections
8 and 11 of the Arbitration and Conciliation Act 1996 observing that
( 2025:HHC:305 )
39
scope of judicial intervention is only restricted to a situation where
Court/judicial authority finds that arbitration agreement does not exist
or is null & void. Insofar as nature of intervention is concerned, the
Commission recommended that in the event the Court /judicial
authority is prima facie satisfied against the argument challenging
the arbitration agreement it shall appoint the arbitrator and/or refer
the parties to arbitration, as the case may be. The amendment
envisages that judicial authority shall not refer the parties to
arbitration only if it finds that there does not exist arbitration
agreement or that it is null & void. If the judicial authority is of the
opinion that prima facie the arbitration agreement exists, the dispute
shall be referred to arbitration and leave the existence of arbitration
agreement to be finally determined by the Arbitral Tribunal.
However, if the judicial authority concludes that the arbitration
agreement does not exist, then the conclusion will be final and not
prima facie. In the event the judicial authority refers the dispute to
arbitration and appoints arbitrator under Sections 8 and 11
respectively such decision would be final and non-appealable. An
appeal can be maintained under Section 37 only in the event of
refusal to refer the parties to arbitration or refusal to appoint
arbitrator. Relevant paragraph of the report reads as under:-
( 2025:HHC:305 )
40“33. It is in this context, the Commission has
recommended amendments to sections 8 and 11 of the
Arbitration and Conciliation Act, 1996. The scope of the
judicial intervention is only restricted to situations where the
Court/Judicial Authority finds that the arbitration agreement
does not exist or is null and void. In so far as the nature of
intervention is concerned, it is recommended that in the
event the Court/Judicial Authority is prima facie satisfied
against the argument challenging the arbitration agreement,
it shall appoint the arbitrator and/or refer the parties to
arbitration, as the case may be. The amendment envisages
that the judicial authority shall not refer the parties to
arbitration only if it finds that there does not exist an
arbitration agreement or that it is null and void. If the judicial
authority is of the opinion that prima facie the arbitration
agreement exists, then it shall refer the dispute to arbitration,
and leave the existence of the arbitration agreement to be
finally determined by the arbitral tribunal. However, if the
judicial authority concludes that the agreement does not
exist, then the conclusion will be final and not prima facie.
The amendment also envisages that there shall be a
conclusive determination as to whether the arbitration
agreement is null and void. In the event that the judicial
authority refers the dispute to arbitration and/or appoints an
arbitrator, under sections 8 and 11 respectively, such a
decision will be final and non-appealable. An appeal can be
maintained under section 37 only in the event of refusal to
refer parties to arbitration, or refusal to appoint an
arbitrator.”
( 2025:HHC:305 )
41
5(ii) The High Court in exercise of its original civil jurisdiction
and Principal Civil Court of Original Jurisdiction are ‘Court’ as
defined in Section 2(1)(e) of the Act. With respect to an arbitration
agreement Section 42 of the Act delineates jurisdiction of the Court
and states where an application under Part-I of the Act (i.e. under
Sections 1 – 43) in relation to an arbitration agreement has been
moved in a Court then that Court alone will have jurisdiction not
only over the arbitral proceedings but also over all subsequent
applications arising out of that agreement. All arbitral proceedings
can be made in that Court alone. Section 42 applies to all
applications whether made before or during arbitral proceedings or
after an award is pronounced under Part-1 of the Act. The only rider
is that such an application must have been made to a Court as
defined.
5(iii) In the instant case, application in question was moved
under Section 11(6) of the Act for appointment of arbitrator.
Application was thus under Part-1 of the Act. The application was
made to the High Court of Himachal Pradesh, which incidentally
also exercises original civil jurisdiction. The High Court of Himachal
Pradesh, therefore, technically falls within the definition of ‘Court’
under Section 2(1)(e) of the Act but the arbitrator was not appointed
by the High Court in exercise of its original civil jurisdiction. The
( 2025:HHC:305 )
42
appointment was made in exercise of Section 11(6) of the Act.
Further, the pecuniary limit/ordinary original civil jurisdiction of the
High Court of Himachal Pradesh is over the matters where value
exceeds rupees one crore.
5(iv) The arbitrator was appointed on 02.08.2019 when the Act
stood amended and the words ‘Chief Justice’ stood replaced with
the words ‘High Court’. Hence appointment of arbitrator was by the
High Court. The object behind replacing the words ‘Chief Justice’
with ‘High Court’ in Section 11(6) as given by the Law Commission is
that “delegation of the power of ‘appointment’ as opposed to a
finding regarding the existence/nullity of the arbitration agreement
shall not be regarded as a judicial act”. The amendment has been
proposed “for rationalizing the law and providing greater incentive
for the High Court and/or Supreme Court to delegate the power of
appointment ‘being a non-judicial act’ to specialized, external
persons or institutions”. ‘In the event the judicial authority refers the
dispute to arbitration and/or appoints an arbitrator under Sections 8
and 11, such a decision will be final and non-appealable. Section
11(7) of the Act had also been amended. An appeal can be
maintained under Section 37 only in the event of refusal to refer
parties to arbitration or refusal to appoint an arbitrator’. Section
11(7), however was omitted by Act 33 of 2019. The arbitrator was
( 2025:HHC:305 )
43
appointed by the High Court not because this High Court exercises
original civil jurisdiction or in exercise of its original civil jurisdiction
but because of the power given in Section 11(6) of the Act. In
Garhwal Mandal Vikas Nigam Ltd.7 Hon’ble Apex Court held ‘Once
an arbitrator is appointed then the appropriate forum for filing the
award and for challenging the same will be the Principal Civil Court
of Original Jurisdiction. The expression ‘Court’ used in Section 34 of
the Act will also have to be understood ignoring the definition of
‘Court’ in the Act. Thus the parties will have the right to move under
Section 34 of the Act and to appeal under Section 37 of the Act.
Therefore, in the scheme of things, if appointment is made by the
High Court or by this Court, the Principal Civil Court of Original
Jurisdiction remains the same as contemplated under Section
2(1)(e) of the Act.’
5(iv) Appointing an arbitrator under Section 11(6) of the Act by
the Court which exercises original civil jurisdiction may not even
otherwise vest the Court with jurisdiction under Section 42 of the Act
to entertain objections under Section 34 of the Act, if the Court does
not have pecuniary jurisdiction to entertain the objections. In the
instant cases, in both the claims put together, the total amount
involved is around Rs. 11 lacs. In M/s Ravi Ranjan Developers Pvt.
( 2025:HHC:305 )
44
Ltd. vs. Aditya Kumar Chatterjee14, the Supreme Court noted that
“Section 42 cannot possibly have any application to an application
under Section 11(6), which necessarily has to be made before a
High Court…..”. This is regardless of whether that High Court has
original jurisdiction to decide suits or jurisdiction related to subject
matter of arbitration. Consequently the definition provided in Section
2(1)(e) does not directly apply even where appointment of arbitrator
is by a High Court that exercises original jurisdiction.
5(v). The sum total of above discussion is that the High Court
of Himachal Pradesh, which exercises original civil jurisdiction
cannot be classified as ‘Court’ for the purpose of Section 42 of the
Arbitration and Conciliation Act when it merely appointed arbitrators
under Section 11(6) of the Act. Section 42 of the Act will not be
attracted where High Court of Himachal Pradesh has only
appointed the arbitrator and has not undertaken any other exercise.
6. The next point to be deliberated upon is which Court will
have the jurisdiction to hear objections against the arbitral awards
involved in the instant case. Learned District Judge Mandi has held
that it will not have any jurisdiction over the objections arising out
of the arbitral awards. I am inclined to agree with this conclusion
drawn by the learned Court.
14
2022 SCC Online SC 568
( 2025:HHC:305 )
45
In Hindustan Construction Company Limited vs. NHPC
Limited & another15, contract was executed between the parties at
Faridabad and part of cause of action also arose there. However,
New Delhi was the chosen seat of the parties. Learned Additional
District Judge held that though seat of arbitration was at New Delhi
yet by virtue of BALCO vs. Kaiser Aluminium Technical Services
Inc.16, since both Delhi as well as Faridabad Courts would have
jurisdiction as the contract was executed & part of cause of action
arose in Faridabad, Faridabad Court would have the jurisdiction to
decide all other applications as Section 42 of the Act would kick in.
Relying upon BGS SGS Soma JV vs. NHPC17, Hon’ble Apex Court
held that Courts at New Delhi alone would have jurisdiction for the
purposes of challenge to the award. Relevant paras of the report
read as under:-
“3. This Court in Civil Appeal No. 9307 of 2019 entitled
BGS SGS Soma JV vs. NHPC Ltd.17 delivered a judgment
on 10.12.2019 i.e. after the impugned judgment was
delivered, in which reference was made to Section 42 of the
Act and a finding recorded thus:
“59. Equally incorrect is the finding in Antrix
Corporation Ltd. Vs. Devas Multimedia (P) Ltd.
(supra)18 that Section 42 of the Arbitration Act, 1996
would be rendered ineffective and useless. Section 4215
(2020) 4 SCC 310
16
(2012) 9 SCC 552
17
(2020) 4 SCC 234
18
2018 SCC OnLine Del 9338
( 2025:HHC:305 )
46is meant to avoid conflicts in jurisdiction of Courts by
placing the supervisory jurisdiction over all arbitral
proceedings in connection with the arbitration in one
Court exclusively. This is why the section begins with
a non-obstante clause, and then goes on to state
‘…where with respect to an arbitration agreement any
application under this Part has been made in a
Court…’ It is obvious that the application made under
this part to a Court must be a Court which has
jurisdiction to decide such application. The
subsequent holdings of this Court, that where a seat
is designated in an agreement, the Courts of the seat
alone have jurisdiction, would require that all
applications under Part I be made only in the Court
where the seat is located, and that Court alone then
has jurisdiction over the arbitral proceedings and all
subsequent applications arising out of the arbitral
agreement. So read, Section 42 is not rendered
ineffective or useless. Also, where it is found on the
facts of a particular case that either no “seat” is
designated by agreement, or the so-called “seat” is
only a convenient “venue”, then there may be several
Courts where a part of the cause of action arises that
may have jurisdiction. Again, an application under
Section 9 of the Arbitration Act, 1996 may be
preferred before a court in which part of the cause of
action arises in a case where parties have not agreed
on the “seat” of arbitration, and before 3 such “seat”
may have been determined, on the facts of a
particular case, by the Arbitral Tribunal under Section
20(2) of the Arbitration Act, 1996. In both these
situations, the earliest application having been made
to a Court in which a part of the cause of action arises
would then be the exclusive Court under Section 42,
which would have control over the arbitral
proceedings. For all these reasons, the law stated by
the Bombay19, 20 and Delhi18 High Courts in this
regard is incorrect and is overruled.”
4. This was made in the backdrop of explaining para 96
of the Balco16 (supra), which judgment read as a whole
declares that once the seat of arbitration is designated, such
19
Konkola Copper Mines vs. Stewarts & Lloyds of India Ltd. 2013 SCC OnLine Bom 777.
20
Nivaran Solutions vs. Aura Thia Spa Services (P) Ltd., 2016 SCC OnLine Bom 5062.
( 2025:HHC:305 )
47
clause then becomes an exclusive jurisdiction clause as a
result of which only the courts where the seat is located
would then have jurisdiction to the exclusion of all other
courts.
5. Given the finding in this case that New Delhi was the
chosen seat of the parties, even if an application was first
made to the Faridabad Court, that application would be
made to a court without jurisdiction. This being the case, the
impugned judgment is set aside following BGS SGS Soma
JV17 (supra), as a result of which it is the courts at New Delhi
alone which would have jurisdiction for the purposes of
challenge to the Award.
6. As a result of this judgment, the Section 34
application that has been filed at Faridabad Court will stand
transferred to the High Court of Delhi at New Delhi. Any
objections taken on the ground that such objection filed
under Section 34 is out of time hence cannot be
countenanced. The appeal is disposed of accordingly.”
In Inox Renewables Limited vs. Jayesh Electricals
Limited21 the parties had agreed for holding arbitration at Jaipur.
However, an application for appointment of arbitrator was made
before the High Court of Gujarat. The arbitrator was appointed.
Arbitral proceedings were held at Ahmedabad. The arbitral award
was assailed before the Courts at Vadorara. The jurisdiction of
Courts at Vadodara was unsuccessfully resisted. The matter
21
(2023) 3 SCC 733
( 2025:HHC:305 )
48
reached Hon’ble Apex Court. It was held that by mutual agreement
parties had shifted venue/place of arbitration from Jaipur to
Ahmedabad. The moment seat is chosen as Ahmedabad, it is akin
to an exclusive jurisdiction clause, thereby vesting the Courts at
Ahmedabad with exclusive jurisdiction to deal with the arbitration. It
was observed as follows:-
“11. In BGS SGS 17 (supra), this Court, after an exhaustive
review of the entire case law, concluded thus :
“32. It can thus be seen that given the new concept of
“juridical seat” of the arbitral proceedings, and the
importance given by the Arbitration Act, 1996 to this
“seat”, the arbitral award is now not only to state its
date, but also the place of arbitration as determined in
accordance with Section 20. However, the definition
of “court” contained in Section 2(1)(c) of the
Arbitration Act, 1940, continued as such in the
Arbitration Act, 1996, though narrowed to mean only
principal civil court and the High Court in exercise of
their original ordinary civil jurisdiction. Thus, the
concept of juridical seat of the arbitral proceedings
and its relationship to the jurisdiction of courts which
are then to look into matters relating to the arbitral
proceedings – including challenges to arbitral awards –
was unclear, and had to be developed in accordance
with international practice on a case by case basis by
this Court.
xxx xxx xxx
48. The aforesaid amendment carried out in the
definition of “Court” is also a step showing the right
direction, namely, that in international commercial
arbitrations held in India, the High Court alone is to
exercise jurisdiction over such proceedings, even
where no part of the cause of action may have arisen
within the jurisdiction of such High Court, such High
Court not having ordinary original jurisdiction. In such
cases, the “place” where the award is delivered alone
is looked at, and the High Court given jurisdiction to
supervise the arbitration proceedings, on the footing
( 2025:HHC:305 )
49of its jurisdiction to hear appeals from decrees of
courts subordinate to it, which is only on the basis of
territorial jurisdiction which in turn relates to the
“place” where the award is made. In the light of this
important change in the law, Section 2(1)(e)(i) of the
Arbitration Act, 1996 must also be construed in the
manner indicated by this judgment.
49. Take the consequence of the opposite conclusion,
in the light of the facts of a given example, as follows.
New Delhi is specifically designated to be the seat of
the arbitration in the arbitration clause between the
parties. Part of the cause of action, however, arises in
several places, including where the contract is
partially to be performed, let us say, in a remote part
of Uttarakhand. If concurrent jurisdiction were to be
the order of the day, despite the seat having been
located and specifically chosen by the parties, party
autonomy would suffer, which BALCO16 specifically
states cannot be the case. Thus, if an application is
made to a District Court in a remote corner of the
Uttarakhand hills, which then becomes the court for
the purposes of Section 42 of the Arbitration Act,
1996 where even Section 34 applications have then
to be made, the result would be contrary to the stated
intention of the parties – as even though the parties
have contemplated that a neutral place be chosen as
the seat so that the courts of that place alone would
have jurisdiction, yet, any one of five other courts in
which a part of the cause of action arises, including
courts in remote corners of the country, would also be
clothed with jurisdiction. This obviously cannot be the
case. If, therefore, the conflicting portion of the
judgment of BALCO16 in para 96 is kept aside for a
moment, the very fact that parties have chosen a
place to be the seat would necessarily carry with it the
decision of both parties that the courts at the seat
would exclusively have jurisdiction over the entire
arbitral process.
xxx xxx xxx
53. In Indus Mobile Distribution (P) Ltd.22, after
clearing the air on the meaning of Section 20 of the
Arbitration Act, 1996, the Court in para 19 (which has
already been set out hereinabove) made it clear that
the moment a seat is designated by agreement
between the parties, it is akin to an exclusive
22
(2017) 7 SCC 678
( 2025:HHC:305 )
50jurisdiction clause, which would then vest the courts
at the “seat” with exclusive jurisdiction for purposes of
regulating arbitral proceedings arising out of the
agreement between the parties.
xxx xxx xxx
82. On a conspectus of the aforesaid judgments, it
may be concluded that whenever there is the
designation of a place of arbitration in an arbitration
clause as being the “venue” of the arbitration
proceedings, the expression “arbitration proceedings”
would make it clear that the “venue” is really the
“seat” of the arbitral proceedings, as the aforesaid
expression does not include just one or more
individual or particular hearing, but the arbitration
proceedings as a whole, including the making of an
award at that place. This language has to be
contrasted with language such as “tribunals are to
meet or have witnesses, experts or the parties” where
only hearings are to take place in the “venue”, which
may lead to the conclusion, other things being equal,
that the venue so stated is not the “seat” of arbitral
proceedings, but only a convenient place of meeting.
Further, the fact that the arbitral proceedings “shall be
held” at a particular venue would also indicate that the
parties intended to anchor arbitral proceedings to a
particular place, signifying thereby, that that place is
the seat of the arbitral proceedings. This, coupled with
there being no other significant contrary indicia that
the stated venue is merely a “venue” and not the
“seat” of the arbitral proceedings, would then
conclusively show that such a clause designates a
“seat” of the arbitral proceedings. In an International
context, if a supranational body of rules is to govern
the arbitration, this would further be an indicia that
“the venue”, so stated, would be the seat of the
arbitral proceedings. In a national context, this would
be replaced by the Arbitration Act, 1996 as applying
to the “stated venue”, which then becomes the “seat”
for the purposes of arbitration.
xxx xxx xxx
98. However, the fact that in all the three appeals
before us the proceedings were finally held at New
Delhi, and the awards were signed in New Delhi, and
not at Faridabad, would lead to the conclusion that
both parties have chosen New Delhi as the “seat” of
arbitration under Section 20(1) of the Arbitration Act,
( 2025:HHC:305 )
51
1996. This being the case, both parties have,
therefore, chosen that the courts at New Delhi alone
would have exclusive jurisdiction over the arbitral
proceedings. Therefore, the fact that a part of the
cause of action may have arisen at Faridabad would
not be relevant once the “seat” has been chosen,
which would then amount to an exclusive jurisdiction
clause so far as Courts of the “seat” are concerned.”
12. This case would show that the moment the seat is
chosen as Ahmedabad, it is akin to an exclusive jurisdiction
clause, thereby vesting the courts at Ahmedabad with
exclusive jurisdiction to deal with the arbitration. However,
learned counsel for the Respondent referred to and relied
upon paragraphs 49 and 71 of the aforesaid judgment.
Paragraph 49 only dealt with the aspect of concurrent
jurisdiction as dealt with in BALCO 16 (supra) which does not
arise on the facts of the present case. Paragraph 71 is
equally irrelevant, in that, it is clear that the parties have, by
mutual agreement, entered into an agreement to substitute
the venue at Jaipur with Ahmedabad as the place/seat of
arbitration under Section 20(1) of the Arbitration and
Conciliation Act, 1996.
xxx xxx xxx
16. The reliance placed by learned counsel for the
Respondent on Indus Mobile22 (supra), and in particular, on
paragraphs 18 and 19 thereof, would also support the
Appellant’s case, inasmuch as the “venue” being shifted
from Jaipur to Ahmedabad is really a shifting of the
venue/place of arbitration with reference to Section 20(1),
and not with reference to Section 20(3) of the Arbitration and
Conciliation Act, 1996, as it has been made clear that Jaipur
does not continue to be the seat of arbitration and
( 2025:HHC:305 )
52
Ahmedabad is now the seat designated by the parties, and
not a venue to hold meetings. The learned arbitrator has
recorded that by mutual agreement, Jaipur as a “venue” has
gone and has been replaced by Ahmedabad. As clause 8.5
of the Purchase Order must be read as a whole, it is not
possible to accept the submission of Shri Malkan that the
jurisdiction of Courts in Rajasthan is independent of the
venue being at Jaipur. The two clauses must be read
together as the Courts in Rajasthan have been vested with
jurisdiction only because the seat of arbitration was to be at
Jaipur. Once the seat of arbitration is replaced by mutual
agreement to be at Ahmedabad, the Courts at Rajasthan are
no longer vested with jurisdiction as exclusive jurisdiction is
now vested in the Courts at Ahmedabad, given the change
in the seat of arbitration.”
In the present case, even though part of cause of action
arose in District Mandi yet all arbitral proceedings were conducted
at Shimla. It is not the case of either of the parties that any
sitting was held within the jurisdiction of Court of learned District
Judge Mandi. Parties have not even placed on record copy of
agreement to show that they had agreed for fixing seat of
arbitration at Mandi. For all these reasons and keeping in view the
law laid down by the Apex Court, District Judge Mandi will not have
jurisdiction over the objections under Section 34 of the Act against
the arbitral awards.
( 2025:HHC:305 )
53
7. Conclusion
For the foregoing discussion, the judgments passed by the
learned District Judge Mandi on 12.01.2023 in Case Nos. (i)
Objection Pet. No. 02/2022 (Reg. No. 03/2022) and Objection Pet.
No. 03/2022 (Reg. No. 04/2022) are set aside to the extent they hold
that this Court alone will have the jurisdiction to entertain & decide
the objections preferred under Section 34 of the Arbitration and
Conciliation Act against the arbitral awards. It is held that in the
instant case, jurisdiction to decide the objections preferred under
Section 34 of the Act against the arbitral awards will be before the
Principal Court of original jurisdiction at Shimla. As a result, Arb.
Case Nos. 582 & 583 of 2023 filed by claimant – Kashmir Singh
and Arb. Cases Nos. 581 & 584 filed by the Telecom Department
are disposed of as not maintainable before this Court. The
petitioners in these cases shall be at liberty to move the appropriate
Court having jurisdiction for filing objections against the arbitral
awards. In case such objections are preferred within two weeks from
today, the same shall be decided in accordance with law.
Petitions stand disposed of in the aforesaid terms, so also
the pending miscellaneous application(s), if any.
Jyotsna Rewal Dua,
Judge
January 02 , 2025 (PK)
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