SC resolves arbitration dilemma

The Supreme Court ruled last week that if an arbitration appeal can be filed in a district court or a high court, the choice under the Arbitration and Conciliation Act has to be exercised in favour of the high court. Usually, the court where the appeal was filed first will have the jurisdiction, according to the Act. But this suit raised a peculiar problem. In this case, chief engineer vs Atlanta Ltd, both the parties were dissatisfied with the arbitral award. The chief engineer of the Maharashtra public works department, who was asked to pay Rs 58 crore plus interest at the rate of 20 per cent by the arbitrator, moved the appeal before the Thane district court because a bypass was to be built in that district. Builder Atlanta, equally dissatisfied with the award, moved the Bombay High Court on the same day, creating a jurisdictional conundrum as both the appeals were filed on the same day, in different courts. Two courts cannot deal with the same award. This situation has not been contemplated in the Act. Atlanta moved the high court for transferring the Thane appeal to the high court. It ruled in favour of Atlanta. The state appealed to the Supreme Court. It upheld the high court view and ruled in favour of the jurisdiction of the high court interpreting Section 2 (1)(e) of the Act.

Article referred: http://www.business-standard.com/article/opinion/sc-resolves-arbitration-dilemma-114011900826_1.html