1. An attempt has been made through this appeal to assail an order of the Arbitrator, concededly issued from the Seat of Arbitration in Chennai - ordering certain interim measures under Section 17 of the Arbitration and Conciliation Act, 1996 - before this Court on the allegation that said order is now being enforced through the District Court, Alappuzha, within whose limits the subject matter is presently situated.
2. The interpretational question impelled before this Court is whether, merely because an order of the Arbitrator is sought to be enforced in Kerala, under the provisions of Section 17(2), said order would become susceptible to a challenge before this Court, construing it to be competent, as per the definition of “Court” under Section 2(e) of the afore mentioned Act.
3. Before I proceed to answer this, the constitutive facts would be required to be seen.
4. This appeal has been filed by the appellant impugning the order issued by the Arbitrator in an arbitration proceedings initiated against him by M/s. Kotak Mahindra Bank Ltd. ('the Bank' for short), the respondent herein, under Section 17 of the Arbitration and Conciliation (Amendment) Act, 1996 (hereinafter referred to as the 'Act' for short), as amended through the Act, 2015.
5. The appellant says that the impugned order issued by the Arbitrator, as per which, his movable properties have been ordered to be taken possession of by a Receiver, is illegal and unlawful; and therefore, that he is entitled to challenge the same before this Court. However, in the same breath, the appellant concedes that the seat of arbitration is in Chennai and that, as per the terms of the arbitration agreement, only the courts in Chennai will obtain jurisdiction. He, nevertheless, contends that since the Bank has approached the District Court, Alappuzha, for enforcement of the impugned order, by filing C.M.A.(Arb.) No. 24/2019, this Court will obtain jurisdiction under Section 42 of the Act. He thus prays that this appeal be allowed.
6. I heard Smt. C.G. Bindu, learned counsel appearing for the appellant and Sri. Latheesh Sebastian, learned counsel appearing for the bank.
7. Smt. C.G. Bindu made vehement submissions that, going by the provisions of Section 42 of the Act, this Court will obtain jurisdiction to entertain this appeal because the Bank had themselves approached the District Court, Alappuzha for enforcement of the order impugned herein. She says that the 'Court' in Section 42, read with Section 36 of the Act, is the one which obtains jurisdiction to enforce orders issued under the Act; and therefore, that when the Bank themselves have invoked the jurisdiction of the District Court, Alappuzha, this appeal becomes maintainable before this Court. She thus reiteratingly prays that this appeal be entertained and allowed.
8. Sri. Latheesh Sebastian, learned counsel appearing for the respondent Bank, in opposition submits that the afore assertions of Smt. C.G. Bindu are wholly untenable because, going by Section 2(e) of the Act, a Court has been defined in the following manner:
“2(e) “Court” means –
(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction 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.”
He says that by no stretch of imagination can the appellants now claim that this court will obtain jurisdiction, merely because the impugned order has been subsequently sought to be enforced, under the provisions of Section 17(2) of the Act, before the District Court, Alappuzha, since the subject matter is now within its jurisdictional territory. He, therefore, prays that this appeal be dismissed.
9. I have considered the afore submissions and have examined the materials available on record, as also the impugned order.
10. It is without doubt that the Arbitrator has issued the order from the Seat of Arbitration, which concededly is in Chennai. It is also without contest that the various clauses in the arbitration agreement also provide for such an arrangement. That being so, normally, this Court would not obtain any jurisdiction to hear a challenge against the impugned order, which has been issued by the Arbitrator under Section 17 of the Act.
11. Be that as it may, the singular contention urged by Smt. C.G. Bindu, in asserting that this appeal is maintainable before this Court, is that the respondent Bank has approached the District Court, Alappuzha, for enforcement of the impugned order; and therefore, that a combined reading of Sections 17(2), 36(1) and 42 of the Act would make this appeal competent to be considered by this Court.
12. I have, therefore, closely examined the provisions of Sections 17(2), 36(1) and 42 of the Act, which are as under:
“17(2): Subject to any orders passed in an appeal under Section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order the Court.
36(1): Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section(2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.
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 the agreement and the arbitral proceedings shall be made in that Court and in no other court.”
The position of law, as is manifest from Section 17(2) of the Act, is that an order issued by the Arbitral Tribunal under Section 17(1), which provides for interim measures, is deemed to be an order of the Court and liable to be enforced under the Code of Civil Procedure [CPC for short hereinafter] in the manner as if it were under an order of the court. Section 36 thereafter provides that an Award of an Arbitral Tribunal shall also be enforced in accordance with the provisions of the CPC in the same manner as it were a decree of the Court.
13. In the afore context, when one goes through the provisions under Section 42, which only provides that when an application is made to a court with respect to an arbitration agreement, it alone will have the jurisdiction over the arbitral proceedings and that all subsequent applications arising out of the agreement and that the arbitral proceedings shall be made in that court and in no other.
14. I am afraid that no amount of scrutiny of the afore extracted provisions supports the submissions of Smt.C.G.Bindu, that this Court will obtain jurisdiction to assess the challenge against an order passed by the Arbitrator with the Seat of Arbitration being in Chennai, solely because the said order is sought to be enforced through a local court in Kerala, under the provisions of Section 17(2) of the Act.
15. As I have already said above, Section 17(2) only provides for the method of enforcement of an order of interim measure issued by the Arbitral Tribunal. Admittedly, it is solely since the subject matter involved in the impugned order is now located within the territorial jurisdiction of the District Court, Alappuzha, that an application under Section 17(2) had been made by the Bank for its enforcement. I cannot, therefore, understand how Section 36 of the Act would apply - being the provision relating to enforcement of Awards – and as to how Section 42 will vest this Court with the jurisdiction to hear the challenge against the impugned order. This is more so because, Section 42 is intended only to apply to a court as defined under Section 2(1)(e) of the Act; and in the case at hand, it can only mean that the courts in Chennai, including the High Court of Madras, since the Seat of Arbitration is admittedly in Chennai and the impugned order has been issued by the Arbitrator from there.
16. I cannot, conseque
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ntially, offer imprimatur to the submissions of Smt.Bindu, that an order of interim measure issued by the Arbitrator outside Kerala can be challenged before this Court, solely because it is sought to be enforced through a local court in Kerala under the provisions of Section 17(2) of the Act. 17. In the afore circumstances, I certainly cannot find this appeal to be maintainable and resultantly dismiss it; however without making any order as to costs. 18. After I dictated this judgment, Smt. C.G. Bindu prayed that it may also be clarified that my observations herein will not prejudice her client's rights to challenge the order impugned before the appropriate Court. Even when I hear this request, I am sure that there is no reason why this Court should issue any such clarification, since the right of the appellant to approach a competent Court is always available to him statutorily; my findings and observations herein being confined only to the question of maintainability of this appeal.