Subsequent applications can be filed only in the Court Where arbitration proceedings initiated: Madras High Court

Subsequent applications can be filed only in the Court where arbitration proceedings initiated: Madras High Court

The Madras High Court in its recent judgement has held that a court before which arbitration proceedings were initially filed alone has the jurisdiction to deal with all subsequent applications arising out of the same arbitration agreement.

It was noted that if parties engaged in an arbitration proceeding choose to file a subsequent application, they cannot file the same before other courts.

"It is settled under Section 42 of the Act that if parties have chosen to file an application before a particular Court then they cannot go on file other proceedings in other Courts and cause confusion in jurisdiction, irrespective of the fact that they had reserved a particular jurisdiction by contract," the order stated.

In the present case, the Court was considering a batch of revision petitions filed by three individual parties to an arbitration proceeding with a private infrastructure company. As per the original understanding when their dispute went for arbitration, the three petitioners and the respondent company decided that since their cause of action pertaining to the ownership of a plot of land arose in Coimbatore, Tamil Nadu, that place would be the venue of the proceedings.

An arbitrator was appointed by the High Court in 2016. However, in 2017, the respondent company filed some original applications before the High Court in Chennai for the appointment of another arbitrator. At this time, the petitioners and the respondent agreed upon Chennai being the venue of their arbitral proceeding.

Following this in October 2021, displeased with the outcome of the proceeding, the respondent company filed an appeal before a Coimbatore court challenging the final arbitral award.

The petitioners thereby approached High Court seeking that the plea filed before the Coimbatore court be dismissed.

It was argued by the petitioners that since the parties had subjected themselves to the jurisdiction of Chennai, the appeal challenging the arbitral award ought not to have been filed before the district court in Coimbatore. It was stated that the respondent had approached the Coimbatore court merely as a delaying tactic.

Counsel for respondent submitted that the "place of arbitration" could not be equated with the "seat of arbitration," which was already agreed between the parties as Coimbatore and not Chennai.

The subject matter of the agreement is situated at Coimbatore and hence the respondents can very well invoke the jurisdiction of the Court at Coimbatore, he argued.

The Court, however, held that if the parties had agreed to certain terms, they ought to have abided by those terms.

"If the parties have chosen to deviate from the terms by not making much fuss about the terms, it would only mean that the parties have waived the same," the Bench said while referring to the 2017 agreement by which the petitioners and the respondent agreed to have the arbitral proceedings at Chennai.

"...as per sec. 42 of the Act, if the parties to the proceedings have chosen to file any application under Part One before any particular Court, irrespective of their agreement as to the place of Arbitration, that Court alone shall have the jurisdiction over the arbitral proceedings all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court," the Court noted.

It was further noted that:

"As the parties have got the liberty to deviate from the terms on jurisdiction, the number of such deviation is limited to only one. So it is right for the revision petitioners to claim that the respondents, who had subjected themselves to the jurisdiction of the Courts in Chennai by their own conduct, ought to have filed the present application only before the Court at Chennai and not at Coimbatore," it concluded.

Thus, the Court allowed the revision applications filed by the petitioners and the Coimbatore court was directed to return the pleas filed by the respondent company.