The Delhi High Court in the case Kush Raj Bhatia v. M/S DLF Power & Services Ltd., [ARB.P. 869/2022 dated 06.12.2022] held that the application under Section 11 of the A&C Act rejected on merits, cannot be reopened by the way of a review petition.
FACTS
Mr. Kush Raj Bhatia (hereinafter referred to as the “Petitioner”) has filed the present Review Petition under Order XLVII Rule 1 read with Section 114 of the Civil Procedure Code, 1908 (hereinafter referred to as the “CPC”). The Petitioner sought a review of the order dated 12.10.2022 (hereinafter referred to as the “Impugned Order”) dismissing the application under Section 11 of the Arbitration and Conciliation Act (hereinafter referred to as the “A&C Act”) observing that the Court had no territorial jurisdiction to entertain the application.
ISSUE BEFORE THE HIGH COURT
Whether the Court had the jurisdiction to review the Impugned Order under Section 11 of the A&C Act?
CONTENTIONS OF THE PARTIES
The Petitioner contended that the definition of “location” provided in the Black’s Law Dictionary has not been considered by the Court. It was argued that the Court had reached the finding of lack of territorial jurisdiction to appoint an Arbitrator, without considering the submissions made by the Petitioner. It was asserted that the Court had not considered the cases relied upon by the Petitioner.
The Petitioner submitted that Arbitration Clause stated that the place of Arbitration is New Delhi, which has exclusive jurisdiction. Moreover, the venue of Arbitration may be New Delhi but the seat of Arbitration shall be Gurgaon and at the High Court of Chandigarh. Thus, there are prima facie errors in the Impugned Order and hence, sufficient grounds of review are present to appoint an Arbitrator under Section 11 of the A&C Act and to appoint an Arbitrator.
The Respondents argued that the power of review is not provided under the A&C Act and hence, the present petition is not maintainable. It was also submitted that earlier in a similar dispute between the parties, the Respondents had agreed to arbitration at Delhi as it was on concession and not on merits. The Respondents were not ready to submit the jurisdiction at Delhi due to the specific Arbitration Clause agreed upon between the parties.
DECISION AND FINDINGS
The Delhi High Court relied on the case of Ram Chandra Pillai v. Arunschalathammal & Ors. (1871 (3) SCC 847) and SBP & Co. v. Patel Engineering Ltd. And Anr. ((2005) 8 SCC 618) and observed that the Impugned Order is passed under Section 11 of the A&C Act, in the exercise of the statutory powers and hence, the review can also be done under the A&C Act. Thus, as the A&C Act does not provide the power of review, the Court does not have jurisdiction to review the present order.
The Delhi High Court further relied on Roger Shashoua v. Mukesh Sharma ((2009) EWHC 957) and Mankanstu Impex Pvt. Ltd. v. Airusal Ltd. ((2020) 5 SCC 399) and examined the tests laid down and held that even though the Arbitration Clause specifically stated the place of Arbitration was New Delhi, it was also specified that the Courts at Gurgaon/High Court of Chandigarh had the exclusive jurisdiction.
The Delhi High Court relied on Jain Studios Ltd. Through its President v. Shin Satellite Public Co. Ltd. ((2006) 65 SCC 501) opined that the power to review should be exercised very carefully and cautiously and only in exceptional cases. It was also observed that once the application for the appointment of the Arbitrator has been rejected, the same cannot be sought to be reviewed indirectly through a review petition. It was held that the present petition challenging the Impugned Order on merits is beyond the scope of review and jurisdiction of the Court. The Petition was disposed-off.
AMLEGALS REMARKS
The Delhi High Court in the present case has upheld the concept that the power of review and appellate power is different and that should not be confused. The power of review shall be exercised only in extraordinary and scarce circumstances.
Moreover, when exclusive jurisdiction is mutually agreed between the parties, it cannot be further denied or disputed by the party. The power of review is not conferred under A&C Act, only the Supreme Court has the power to review under the A&C Act. Hence, the application under Section 11 of the A&C Act has been rejected on merits it cannot be re-opened by the indirect method by the way of the review petition.
– Team AMLEGALS assisted by Ms. Bhavika Lohiya (Intern)
For any queries or feedback, please feel free to get in touch with rohit.lalwani@amlegals.com or himanshi.patwa@amlegals.com.
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