2009 (4) TMI 1001 - SC - Indian Laws

Summary

Issues involved: Jurisdiction of Bombay High Court in an Arbitration Petition where a previous application was filed before Delhi High Court and subsequently dismissed.

Summary:

Background: The case involves a dispute between a Liberian Shipping Company and a government company regarding a charter party for transporting Rock Phosphate. The arbitration clause in the agreement required each party to appoint an arbitrator, with an umpire to be appointed in case of disagreement.

Issue 1 - Jurisdiction of Delhi High Court: The respondent had initially nominated an arbitrator from Delhi High Court, but the appointment was challenged by the appellant. The Delhi High Court dismissed the respondent's petition as infructuous after the nominated arbitrator passed away.

Issue 2 - Appointment of Umpire: The arbitrators appointed an umpire, but the respondent raised objections to the appointment. The umpire suggested approaching the court for further orders.

Issue 3 - Jurisdiction of Bombay High Court: The appellant approached the Bombay High Court for the appointment of the umpire and extension of time for making the award. However, the High Court dismissed the petition citing lack of jurisdiction due to the previous application before the Delhi High Court.

Court's Analysis: The Supreme Court analyzed the provisions of the Arbitration Act, emphasizing that the objective of Section 31 is to vest exclusive jurisdiction in a single court for arbitration matters. The Court clarified that applications under Sections 33 and 34, challenging the validity of the arbitration agreement, fall within the purview of Section 31(4).

Precedents: The Court referred to previous judgments to support its interpretation, highlighting that the court where the arbitration proceedings were initiated retains jurisdiction unless explicitly transferred. The Court differentiated cases where control over proceedings was retained by a specific court.

Decision: The Supreme Court allowed the appeal, setting aside the High Court's order and restoring the application for extension of time for making the award to the Bombay High Court. The High Court was directed to consider the application on its merits within six months. No costs were awarded in the case.