delhihighcourt

BALASORE ALLOYS LIMITED vs STATE TRADE CORPORATION OF INDIA LIMITED

$~31
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on:12th February, 2024
+ O.M.P. (COMM) 468/2023

BALASORE ALLOYS LIMITED ….. Petitioner
Through: Mr. Akhil Sibal, Senior Advocate with Mr. Sandeep S. Ladda, Mr. Yashvardhan & Ms. Kritika Nagpal, Advocates.

versus

STATE TRADE CORPORATION
OF INDIA LIMITED ….. Respondent
Through: Mr. Madhu Sudan Bhayana, Advocate.

CORAM:
HON’BLE MR. JUSTICE PRATEEK JALAN
PRATEEK JALAN, J. (ORAL)
I.A. 22893/2023 (Exemption)
Exemption allowed, subject to all just exceptions.
The application stands disposed of.
O.M.P. (COMM) 468/2023 & I.A. 22892/2023 (seeking ad interim ex-parte stay of the impugned award), I.A. 22894/2023 (to file additional documents)

1. The petitioner has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 [“the Act”], to assail an arbitral award dated 03.03.2021. By this judgment, I propose to decide a preliminary objection taken by the respondent as to territorial jurisdiction of this Court.
2. On the last date of hearing i.e. 09.02.2024, such a preliminary objection was taken on the ground that the petitioner had earlier instituted a petition under Section 9 of the Act before the District Judge, Balasore, Odisha. It was submitted by Mr. Madhu Sudan Bhayana, learned counsel for the respondent, that, by operation of Section 42 of the Act, the concerned Court in Odisha alone would have jurisdiction to entertain Section 34 proceedings. It was also pointed out that the respondent had filed O.M.P.(T)(COMM.) 19/2015 before this Court, which was dismissed on this ground by an order dated 14.12.2015. The petitioner herein was represented when the said order was passed. It is submitted that jurisdiction having been asserted by the petitioner itself in Balasore, on which basis it also resisted the jurisdiction of this Court in the earlier proceedings, the petitioner cannot now move this Court under Section 34.
3. In response to this preliminary objection, Mr. Akhil Sibal, learned Senior Counsel for the petitioner, submits that the seat of the arbitration was admittedly in Delhi. He argues that the Courts in Delhi are therefore vested with exclusive supervisory jurisdiction over the arbitral proceedings. Mr. Sibal accepts both, that the jurisdiction of the Balasore Court was wrongly invoked by the petitioner, and the jurisdiction of this Court was rightly invoked by the respondent in O.M.P.(T)(COMM) 19/2015. However, in view of the fact that the Balasore Court had no jurisdiction to entertain the Section 9 petition, he submits that Section 42 of the Act is not attracted. For this purpose, he cites the decision of the Supreme Court in BBR (India) (P) Ltd. vs. S.P. Singla Constructions (P) Ltd.1
4. The submission of Mr. Sibal is, in my view, merited. The arbitration was in respect of disputes under an agreement dated 17.07.2006. It contains an arbitration clause, numbered as Clause 17 [although it appears between Clauses 15 and 16]. The said clause reads as follows:-
“17. Arbitration
17.1 Any dispute, controversy or claim (“Dispute”) arising out of, relating to, or in connection with this MOA or the breach, termination or validity hereof, shall initially be resolved by amicable negotiations among executives of the Parties and, if not resolved through such negotiations within days of written notice of the existence of such Dispute, be finally settled in accordance with the rules of Indian Council of Arbitration.
17.2 The arbitration shall be conducted in accordance with the Indian Arbitration and Conciliation Act, 1996 and it shall be conducted in the English language and the venue shall be at New Delhi.
17.3 The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the Parties concerned. The award may include an award of costs, including reasonable attorneys’ fees and disbursements. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets.”2

5. It is clear from Clause 17.2 that New Delhi was expressly designated as the “venue” of the arbitration. The arbitration was to be held in accordance with the Rules of the Indian Council of Arbitration [“ICA”]. A designation of “venue” is, in terms of the judgment of the Supreme Court in BGS SGS SOMA JV vs. NHPC3, to be taken as the “seat” of arbitration, absent any contrary indication in the terms of the agreement. In the present case, learned counsel for the parties have not pointed out any contrary indication. The arbitration proceedings were also admittedly conducted in Delhi and the award was made in New Delhi. In fact, the respondent herein, in its statement of defence before the learned arbitral tribunal, specifically asserted that Delhi was the seat of the arbitration and that the Courts in Delhi had exclusive supervisory jurisdiction. For this purpose, the respondent cited the decision of the Constitution Bench of the Supreme Court in BALCO vs. Kaiser Aluminium Technical Services Inc.,4 and averred as follows:-
“10. The State Trading Corporation of India Limited states and submits that the Hon’ble Supreme Court of India in a Constitution Bench judgment reported in (2012(9) SCC 152) Balco Vs. Kaiser, it is now a settled law that only the Court having the supervisory jurisdiction over the Arbitration as regards disputes between the parties would be the Court to entertain all petitions concerning arbitration under the Supervisory Jurisdiction i.e. where the seat of Arbitration is located. Thus, no other court other than the High Court of Delhi at New Delhi, has the jurisdiction to entertain any application, far less, any application under Section 9 of the Arbitration and Conciliation Act, 1996 in as much as Delhi is the agreed place of arbitration…..”5

6. Mr. Bhayana states that the same objection was taken before the Balasore Court also.
7. Having regard to this admitted position, this Court is indeed the Court with exclusive supervisory jurisdiction over the arbitration, including for the purposes of the present petition. The exclusive jurisdiction of the seat Court has been emphasised in BGS SGS SOMA6, and in Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd.,7 as explained in BBR (India)8 cited by Mr. Sibal.
8. The facts of the present case point to this unavoidable conclusion even though Mr. Bhayana rightly points out that it is the petitioner which had originally invoked the jurisdiction of the Balasore Court and also apparently disputed the jurisdiction of this Court in the proceedings under Sections 14 and 15 of the Act. The position taken by Mr. Sibal now is inconsistent with the position of the petitioner in both the earlier proceedings, but nonetheless legally correct. The only explanation for this situation is that the aforesaid events pre-dated the respondent’s assertion in the statement of defence that the seat of arbitration was in Delhi and the conduct of the arbitration proceedings and making of the award was in Delhi, all of which the petitioner now accepts to be correct.
9. With regard to the applicability of Section 42 of the Act, the Supreme Court in BBR (India)9 has explained that, once exclusive jurisdiction is found to vest in the seat Court, any other Court which had entertained the prior application would have done so without jurisdiction, and such proceedings would not attract Section 42 of the Act. I therefore hold that this Court has jurisdiction to entertain this petition.
10. By an order dated 20.11.2023, the Court requisitioned the arbitral record. The record has not been made available. The arbitration was held under the aegis of the ICA. The Registrar, ICA is directed to hand over the arbitral record to learned counsel for the petitioner, who may place the same before the Court in electronic form within two weeks from today.
11. List on 29.04.2024.

PRATEEK JALAN, J
FEBRUARY 12, 2024
‘pv’/
1 (2023) 1 SCC 693.
2 Emphasis supplied.
3 (2020) 4 SCC 234.
4 (2012) 9 SCC 552.
5 Emphasis supplied.
6 Supra (note 3).
7 (2017) 7 SCC 678.
8 Supra (note 1).
9 Ibid.
—————

————————————————————

—————

————————————————————

O.M.P. (COMM) 468/2023 Page 2 of 6