The Supreme Court while considering the issue wether the original civil court has jurisdiction to extend the time in terms of Sec 29(A) of the Arbitration and Conciliation Act,1996 or it is only High Court which has the jurisdiction to do so has held that mere appointment of an arbitrator by the High Court under Section 11 of the Arbitration and Conciliation Act, 1996 does not divest the jurisdiction of the Principal Civil Court to entertain applications for extension of time under Section 29A.
A Bench of Justice Pamidighantam Sri Narasimha and Justice R. Mahadevan ruled that applications under Section 29A for extension of time to make arbitral awards must be filed before the “Court” as defined under Section 2(1)(e) of the Act, regardless of whether the arbitrator was appointed by the High Court or by the parties.
The Court set aside the Bombay High Court (Goa Bench) ruling which had held that since the arbitrator was appointed by the High Court, only the High Court could extend the time under Section 29A. Clarifying the scope of jurisdiction under Section 11, the Court held that the power exercised by the High Court to appoint arbitrators is limited and stands exhausted once the appointment is made, rendering the High Court functus officio. It was observed that the appointing court does not retain any supervisory or controlling authority over the arbitral proceedings thereafter.
Rejecting concerns expressed by several High Courts that allowing Civil Courts to substitute arbitrators appointed by High Courts would lead to jurisdictional anomaly or hierarchical conflict, the Supreme Court held that jurisdiction flows from statutory mandate and not from perceived judicial hierarchy. The Court observed that interpretation based on status or hierarchy of courts is inconsistent with the rule of law, emphasizing that statute alone determines jurisdiction.
The Bench further reiterated that the definition of “Court” under Section 2(1)(e) is exhaustive and governs all proceedings under Part I of the Act unless expressly excluded. Accordingly, applications under Section 29A must be filed before the Principal Civil Court of original jurisdiction, or before the High Court only where it exercises ordinary original civil jurisdiction.
The Court also clarified that Section 42 of the Act, which provides exclusive jurisdiction to the court where the first application is filed, does not apply to proceedings under Section 11, as applications under Section 11 are not made before a “Court” as defined under Section 2(1)(e). Therefore, appointment of arbitrators by the High Court does not confer exclusive jurisdiction upon it for subsequent arbitral proceedings.
The case arose from arbitration proceedings initiated pursuant to a family settlement agreement dated 11 January 2021 among members of the Chowgule family. Due to delays in completion of proceedings, an application seeking extension of time under Section 29A(4) was filed before the Commercial Court. However, since one of the arbitrators had earlier been appointed by the Bombay High Court at Goa under Section 11, the Commercial Court’s jurisdiction was challenged. Accepting this contention, the High Court had set aside the Commercial Court’s order granting extension, prompting the present appeal.
Allowing the appeal, the Supreme Court set aside the judgments of the High Court, restored the Commercial Court’s order extending the arbitral timeline, and permitted the parties to seek further extension before the Commercial Court, if required.
