Single Judge of the Commercial Division has jurisdiction over original applications in international commercial arbitration: Calcutta High Court

The High Court held that the Commercial Courts Act, 2015 clearly defines the Commercial Division and the Commercial Appellate Division. The Commercial Division, consisting of a Single Judge as defined in Section 4(1), deals with original applications and appeals arising out of international commercial arbitration. On the other hand, the Commercial Appellate Division, as defined in Section 5(1), consists of one or more Division Benches and deals with appeals arising out of decisions of the Commercial Division.

The question before the Supreme Court was whether the court, sitting separately in the Commercial Division, has jurisdiction to hear the case or whether the Commercial Appellate Division, consisting of a Division Bench, should hear the case.

The Supreme Court referred to Section 42 of the Arbitration Act and noted that it provides that if an application relating to an arbitration agreement is filed with a court, that court alone shall have jurisdiction over all subsequent applications relating to the same arbitration agreement and proceedings.

The Supreme Court referred to West Bengal and Others vs. Associated Contractors (2015) 1 SCC 32 where the Supreme Court held that the non-obstante clause in Article 42 was not applicable because the agreement between the parties did not fall within its scope. The applicability of Article 42 was relevant only where the original court had no judicial jurisdiction.

The High Court, on the other hand, noted that the case involved a jurisdictional barrier based on statutory provisions rather than an agreement between the parties. The non-obstante clause in Section 42 overrides all other provisions in Part I or related statutes. It therefore held that the definition clause in Section 2 subsection (e)(ii) of the Arbitration Act, which the respondents relied on to argue that the matter should be heard by the Commercial Appellate Division, did not apply when the original court had already heard the application.

The Supreme Court held that Article 42 applied to the present case, conferring jurisdiction on the single judge in the Commercial Division over all subsequent applications relating to the arbitration proceedings.

The Supreme Court held that the decision of the High Court in Associated Contractors predates the CC Act and does not take into account its provisions. It held that Section 2(1)(e)(ii) of the Arbitration Act applies to general disputes but is overridden by the CC Act in the case of commercial disputes as provided in Section 10. It held that Section 10(1) of the CC Act clearly indicates that applications and appeals from international commercial arbitration are to be heard by the Commercial Division of the High Court in which it is situated.

The court thus held that the CC Act clearly confers jurisdiction to hear applications and appeals relating to international commercial arbitration on the single judge sitting in the Commercial Division.

Brief background:

A foreign judgment was given in Chicago and a subsequent application for enforcement was made to the High Court. The High Court must decide whether it had jurisdiction to hear the application under Section 9 of the Arbitration Act, given the related pending applications under Section 34 of the Code of Criminal Procedure.

Initially, a Co-ordinating Bench of the High Court ruled in favour of its jurisdiction in relation to this application. However, that decision was appealed and the Division Bench of the High Court decided that the issue of enforcement and jurisdiction had to be determined by the High Court in the context of the Section 9 application.

The respondents contended that a single-judge bench of the High Court, which deals with matters in the Commercial Division, had no jurisdiction. They based their argument on Section 2(1)(e)(ii) of the Arbitration Act and contended that the property in question is situated in Rajarhat New Town. They argued that since the arbitration was international and commercial and if it were a litigation, it would be dealt with by the Commercial Appellate Division under the Commercial Courts Act, 2015.

The respondents further argued that section 10(1) of the CC Act should be interpreted in conjunction with the definition of “Court” in section 2(1)(e) of the Arbitration Act. They argued that the term “Commercial Division” should be understood to mean the Commercial Appellate Division when dealing with applications arising out of original jurisdictions of other courts.

The High Court held that Section 10(1) of the CC Act confers jurisdiction over original applications relating to international commercial arbitration on the Single Judge of the Commercial Division. Therefore, it held that the bank sitting alone in the Commercial Division has jurisdiction to hear and determine the Section 9 application.

The case will be back on the agenda on August 6, 2024.

Case title: Uphealth Holdings Inc Vs Glocal Healthcare Systems Pvt Ltd And Other And Related Matters

Case number: AP-COM/490/2024 IA NR: GA-COM/1/2024, GA-COM /8/2024 and related matters

Attorney for the applicant: Mr. SNMookherjee, Sr. Adv. Mr. Ratnanko Banerji, Sr. Adv. Mr. Suddhasatva Banerjee, Adv. Mr. Chayan Gupta, Adv. Mr. Anand S. Pathak, Adv. Mr. Vijay Purohit, Adv. Mr. Shivam Pandey, Adv. Mr. Anujit Mookherji, Adv. Mr. Anirudhya Dutta, Adv. Mr. S. Bajaj, Adv. Mr. S. Hoon, Adv. Mr. Nav Dhawan, Adv. Mr. S. Jain, Adv. Mr. A. Ahuja, Adv.

Attorney for the defendant: Mr. Jayanta Kr. Mitra, Sr.Adv. Mr. Piyush Agarwal, Adv. Mr. Debojyoti Das, Adv. ..for respondent no.1 Mr. Ranjan Bachawat, Sr. Adv. Mr. Debashis Karmakar, Adv. Mr. Dhruv Chadha, Adv. Mr. Sagnik Bose, Adv. Mr. Satyam Ojha, Adv. …for respondent no. 2 Mr. Krishnaraj Thaker, Adv. Mr. Dhruv Chadha, Adv. …for respondent no.3 Mr. Dhruba Ghosh, Sr. Adv. Mr. Amit Kr. Nag, Adv. Mr. Rajarshi Dutta, Adv. Mrs. Ajeyaa Choudhury, Adv. …for respondent no. 4 Mr. Sudipto Sarkar, Sr. Adv. Mr. Siddhartha Datta, Adv. Ms. Trisha Mukherjee, Adv. …for respondent No. 5 Mr. Abhrajit Mitra, Sr. adv. Mr. Sarvapriya Mukherjee, Adv. Mr. Anindya Choudhury, Adv. …for respondent no. 6

Date of the judgment: July 19, 2024.

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