K. Sasidharan and K.P. Girijakumari v. The Manager, Sundaram Finance Ltd.

**C. R.** IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN WEDNESDAY, THE 4TH DAY OF JULY 2018 / 13TH ASHADHA, 1940 **Arb.A.No. 23 of 2018** AGAINST THE ORDER IN OP(ARB) 10/2017 of ADDL.DISTRICT COURT-I,MAVELIKKARA DATED 25-01-2018 --------- ## APPELLANTS/PETITIONERS 1 K.SASIDHARAN, AGE 64, KRISHNAVILASAM, MATTOM NORTH, THATTRAMBALAM P.O., MAVELIKARA - 690 103. 2 K.P. GIRIJAKUMARI, KRISHNAVILASAM, MATTOM NORTH, THARAMBALAM P.O., MAVELIKARA - 690 103, ALAPPUZHA. BY ADVS.SRI.K.MOHANAKANNAN SMT.A.R.PRAVITHA ## RESPONDENT/RESPONDENT: THE MANAGER, SUNDARAM FINANCE LTD., 21, PATULLOS ROAD, CHENNAI - 600 002. THIS ARBITRATION APPEALS HAVING BEEN FINALLY HEARD ON 04-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **C. R.** ## **V. CHITAMBARESH & SATHISH NINAN, JJ.** **= = = = = = = = = = = = = = = = = = Arbitration Appeal No.23 of 2018 = = = = = = = = = = = = = = = = = = Dated this the 4[th] day of July, 2018** ## **J U D G M E N T** ## **Sathish Ninan, J.** Which is the court that will have territorial jurisdiction to entertain an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”), is the short question that arises for determination. ## 2. In _**Indus Mobile Distribution (P) Ltd. v.**_ ## _**Datawind Innovations (P) Ltd. [2017 (2) KLT 665**_ _**(SC)]**_ , the Apex Court held thus: - “.....the moment the seat is designated, it is akin to an exclusive jurisdiction clause...” The Apex Court was referring to the seat of arbitration, and held that the seat of arbitration decides the territorial jurisdiction of the courts ARBA No.23 of 2018 :- 2 :- which will have exclusive jurisdiction to entertain applications regulating arbitral proceedings arising out of the agreement between the parties. The Apex Court directed the application under Section 9 of the Arbitration Act, which was the subject matter therein, to be filed in the court where the seat of arbitration is situated. 3. Section 42 of the Act which deals with jurisdiction, reads thus: “ **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.” The terms “subsequent applications arising out of that agreement” appearing in the Section was interpreted by the Apex Court in _**State of West Bengal and Others v. Associated Contractors [2015**_ ARBA No.23 of 2018 :- 3 :- _**(1) SCC 32]**_ to hold that it refers to applications under Section 34 also. The Apex Court at paragraph 25 held thus: “(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. (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.” Therefore, if the seat of the arbitration is determinative regarding the court in which an application under Section 9 of the Act is to be filed, then the same would follow in the case of an application under Section 34 of the Act also. This is all the more so in view of Section 34(4) of the Act which reads thus: “On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the ARBA No.23 of 2018 :- 4 :- arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the arbitral tribunal will eliminate the grounds for setting aside the arbitral award.” Thereunder power is given for the court to adjourn the proceedings giving the Arbitral Tribunal opportunity to resume the proceedings for the purposes enumerated therein. So also, it is relevant to note that powers are conferred on the Arbitral Tribunal under Section 17 of the Act to pass interim directions even after passing of the award but before it is enforced. Here it would be relevant to refer to Section 17 of the Act which reads thus: ## **“17. Interim measures ordered by arbitral** — **tribunal.** (1) A party may, during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance — with section 36, apply to the arbitral tribunal (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in ARBA No.23 of 2018 :- 5 :- — respect of any of the following matters, namely: (a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration; (c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver; (e) such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient, and the arbitral tribunal shall have the same power for making orders, as the Court has for the purpose of, and in relation to, any proceedings before it. (2) Subject to any orders passed in an appeal ARBA No.23 of 2018 :- 6 :- 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 of the Court.” 4. Though Section 34 is not an appellate remedy, it is a proceeding under which the very award is at challenge though on the limited grounds enumerated thereunder. On the above discussions, we conclude that the court situated within the territorial jurisdiction of the seat of arbitration alone will have jurisdiction to entertain an application under Section 34 of the Act. 5. Coming to the facts of the present case, Clause 22(b) of the agreement between the parties provides that, “Venue of arbitration proceeding shall be at Chennai”. The arbitrator is at Chennai. As found by the learned District Judge, the seat of arbitration is at Chennai. We concur with the learned District Judge in holding that he has no territorial jurisdiction to entertain the petition. ARBA No.23 of 2018 :- 7 :- Arbitration appeal is accordingly dismissed. **Sd/V. CHITAMBARESH JUDGE Sd/SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge