ADANI ENTERPRISES LIMITED, MUMBAI v. ANTIKEROS SHIPPING CORPORATION, GREECE
2019-03-22
S.J.KATHAWALLA
body2019
DigiLaw.ai
JUDGMENT : S.J. Kathawalla, J. By the above Notice of Motion the Petitioner has prayed that the delay in filing the above Review Petition be condoned. 2. The above Review Petition is filed by the Petitioner (Original Respondent) seeking a re-call of the order dated 21st April, 2011 passed in Arbitration Application No. 572 of 2011 ("Order"). 3. The Order reads as under : "2. Heard the learned Counsel for the Applicant. Perused the record. There is an arbitration clause in the agreement between the parties. In terms of the arbitration clause the Applicant has appointed Shri R.S.Cooper as his nominee on the arbitral tribunal. The Respondent has not responded to the letter from the Applicant. In this view of the matter, considering the provisions of Section 11 of the Arbitration Act Ms.J.K.Bhatt is appointed as member of the arbitral tribunal. Now, Shri R.S.Cooper and Ms. J.K.Bhatt shall appoint an umpire. Application disposed of." 4. Following the Order, the facts leading to the filing of the present Review Petition are as under : 4.1. The arbitrator nominated by the Respondent herein and the arbitrator appointed by this Court pursuant to the Order, proceeded to appoint the third arbitrator and thereby constituted the arbitral tribunal. 4.2. On 1st February, 2013, the Petitioner herein filed an application before the Arbitral Tribunal under Section 16 of the Arbitration and Conciliation Act, 1996 ("Act") inter alia on the ground that as the Petitioner is a body corporate incorporated under the laws of Liberia and thereby outside India; the present arbitration would be an 'International Commercial Arbitration' as defined under Section 2 (1) (f) of the Act. The Petitioner therefore challenged the jurisdiction of the arbitral tribunal on the ground that this Court could not have passed the Order and instead, only the Apex Court could have by virtue of Section 11 of the Act. At the hearing of the Section 16 Application, the arbitral tribunal passed an order dated 3rd July, 2013 which reads: "Having considered the arguments of both parties, the Tribunal holds as follows : (a) The Tribunal is a creature of the Order of the Bombay High Court and derives its Jurisdiction from that Order. It cannot decide on the validity of the Order itself by acting, so to say, as a Court of Appeal.
It cannot decide on the validity of the Order itself by acting, so to say, as a Court of Appeal. If the Respondents are aggrieved by the Bombay High Court Order, they should have mounted a challenge to the Order before the appropriate legal forum. (b) In view of the Tribunal's holding in (a) above, the Tribunal rejects the plea of the Respondents that two members of the Tribunal should recuse themselves from this Arbitration. (c) At this stage, the Tribunal is withholding its decision on the existence of a valid arbitration agreement, if any, between the Parties. It will take the issue along with the merits of the claim of both the Parties for consideration at a suitable date to be advised for the next hearing." 4.3. On 19th September, 2013, the following order came to be passed by the Arbitral Tribunal : "In our Award dated 3rd July 2013, we had stated that we are withholding our decision on the existence of a valid arbitration agreement. We note that as per the High Court Order dated 21st April 2011, there exists an arbitration clause in the agreement between the parties. The parties to the High Court proceedings are M/s. Antikeros Shipping Corporation and M/s. Adani Enterprises Ltd. Accordingly, the Hon'ble High Court has already decided this issue and it is not open to us to go into the same. We therefore hold that there is a valid arbitration agreement between the parties and the objection of the Respondent that there is no valid arbitration agreement between the parties is rejected." 4.4. Following the aforesaid, it is common ground between the parties that proceedings continued before the arbitral tribunal. Affidavits of Evidence etc. came to be filed following which cross-examination ensued. 4.5. During the course of final arguments in or around July, 2018, the Petitioner herein claims to have learnt of a decision dated June 8, 2016 passed by a Ld. Single Judge of this Court in the case of Roptonal Ltd. & Anr. vs. Anees Bamzee, 2016 SCC OnLine Bom 3555 ("Roptonal"). On the basis of the decision in Roptonal, the Petitioner filed an application dated 3rd August, 2018 for re-call of the orders dated 3rd July, 2013 and 19th September, 2013 before the arbitral tribunal on the ground that this Court never had the necessary jurisdiction to pass the Order. 4.6.
vs. Anees Bamzee, 2016 SCC OnLine Bom 3555 ("Roptonal"). On the basis of the decision in Roptonal, the Petitioner filed an application dated 3rd August, 2018 for re-call of the orders dated 3rd July, 2013 and 19th September, 2013 before the arbitral tribunal on the ground that this Court never had the necessary jurisdiction to pass the Order. 4.6. In the meantime, the Petitioner preferred the present Review Petition on 24th August, 2018 seeking to re-call the Order on the ground that this Court never had the necessary jurisdiction to pass the Order and hence, the Order is a nullity and nonest. As stated earlier, the Petitioner also filed a Notice of Motion being Notice of Motion (L) No. 2015 of 2018 seeking condonation of delay of 2680 days in filing the present Review Petition. 4.7. However, despite the lapse of approximately 7 months, the Petitioner has failed to remove the office objections and finally number either the Review Petition and/or the Notice of Motion. Be that as it may, this is the brief factual matrix surrounding the present controversy. 5. Appearing for the Petitioner, Mr. Vikram Nankani, Ld. Senior Advocate argued that in the present case, one of the parties viz. the Petitioner is admittedly located outside India. Therefore, the present arbitration proceeding is an International Commercial Arbitration as defined under Section 2 (1) (f) of the Act. According to him, the Ld. Chief Justice of this Court or his designate, had no jurisdiction to appoint an arbitrator where the subject matter of the application under Section 11 of the Act is an International Commercial Arbitration. He therefore argued that the Order was passed without jurisdiction. According to him, where the court had no power or jurisdiction to pass an order, the order so passed is a nullity or non-est. In this respect, he placed heavy reliance on Roptonal and particularly, the following paragraphs therefrom: "42.
He therefore argued that the Order was passed without jurisdiction. According to him, where the court had no power or jurisdiction to pass an order, the order so passed is a nullity or non-est. In this respect, he placed heavy reliance on Roptonal and particularly, the following paragraphs therefrom: "42. In my view since one of the parties to the arbitration agreement was admittedly incorporated outside India, the arbitration being "international commercial arbitration" within the meaning of section 2(1)(f) of the Arbitration Act, the application for appointment of an arbitrator in case of any breach of the agreed procedure for appointment of an arbitrator could be filed only before the Chief Justice of India under section 11(9) when the said arbitration application (97 of 2013) came to be filed and not before the Chief Justice of this court. In my view in the facts of this case, only the Chief Justice of India or his designate could appoint an arbitrator under section 11(9) of the Arbitration Act and not Chief Justice of this court or his designate. None of the party brought these facts to the notice of the learned designate of the Chief Justice when the said order dated 12th June, 2014 was passed by the learned designate but they gave consent insofar as name of the learned arbitrator is concerned. 43. In my view even by consent of parties, the learned designate of the Chief Justice of this court could not have appointed an arbitrator under section 11(6) of the Arbitration Act in view of the arbitration being "international commercial arbitration" within the meaning of section 2(1)(f) of the Arbitration Act. In my view, the said order dated 12th June, 2014 passed by the learned designate of the Chief Justice suffered from inherent lack of jurisdiction and thus can be recalled by the learned designate of the Chief Justice of this court by exercising powers to have procedural review permissible under Article 215 of the Constitution of India. 44. Supreme Court in case of Sangham Tape Company v. Hans Raj, (2005) 9 SCC 331 and in case of Kapra Mazdoor Ekta Union v. Birla Cotton, (2005) 13 SCC 777 has carved out a distinction between the powers of court to review on merits and the procedural review.
44. Supreme Court in case of Sangham Tape Company v. Hans Raj, (2005) 9 SCC 331 and in case of Kapra Mazdoor Ekta Union v. Birla Cotton, (2005) 13 SCC 777 has carved out a distinction between the powers of court to review on merits and the procedural review. It is held that where a Court or quasi judicial authority having jurisdiction to adjudicate on merit proceeds to do so, its judgment or order can be reviewed on merit only if the Court or the quasi judicial authority is vested with power of review by express provision or by necessary implication. It is held that the procedural review belongs to a different category. In such a review, the Court or quasi judicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so ascertains whether it had committed a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and consequently the order passed therein. Supreme Court has also given various illustrations in the said judgment as to when a court or quasi judicial authority exercise power of procedural review. 45. The Allahabad High Court in case of Manish Engineering Enterprises v. Managing Director, IFFCO, (supra) has adverted to the above referred Supreme Court judgments and has held that the court can entertain a procedural review if it had committed a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and consequently, the order passed therein. In my view the said arbitration application (97 of 2013) filed by the petitioner herein before the Chief Justice of this court under section 11(6) of the Arbitration Act though one of the party to the arbitration agreement was incorporated outside India admittedly and the arbitration being the "international commercial arbitration", itself was not maintainable before the Chief Justice of this court, the order passed by the learned designate of the Chief Justice consequently in such proceedings which were not maintainable before the Chief Justice of this court invalidates not only the proceedings itself but also the order passed by the learned designate of the Chief Justice therein. 46.
46. In my view the applicants to the said arbitration application having committed a procedural illegality which goes to the root of the matter and was filed before the Chief Justice of a wrong court, not having jurisdiction, the said proceedings itself being illegal and without jurisdiction, the order passed by the learned designate of the Chief Justice therein also became illegal and without jurisdiction. In my view the petitioners have thus rightly filed the present proceedings inter alia praying for exercise of the procedural review by the learned designate of the Chief Justice and for recall of the order dated 12th June, 2014. The judgments of Supreme Court in case of Sangham Tape Company (supra) and in case of Kapra Mazdoor Ekta Union (supra) squarely apply to the facts of this case. I am in respectful agreement with the views expressed by the Allahabad High Court in case of Manish Engineering Enterprises (supra). This court in case of Rosy Blue (India) Pvt. Ltd. (supra) has adverted to the judgment of Supreme Court in case of Kapra Mazdoor Ekta Union (supra) and has taken the same view. 50. In my view even when such courts exercise such powers by recording arbitration agreement for the first time in such proceedings, such courts cannot and does not exercise powers under section 11 of the Arbitration Act which powers are specifically conferred only on the Chief Justice of a High Court or his designate or the Chief Justice of India or his designate as the case may be. In my view the learned senior counsel for the respondent is thus not correct in his submission that if by consent of parties, if an arbitrator can be appointed by courts in the proceedings other than the arbitration proceedings, the Chief Justice of the High Court or his designate can also appoint an arbitrator by consent of parties even if the arbitration was "international commercial arbitration" and one of the party to the arbitration agreement had been incorporated outside India.
In my view there is no substance in the submission of the learned senior counsel that once consent was given by the parties to appoint an arbitrator in a proceeding under section 11, such party cannot challenge the jurisdiction of the Chief Justice or his designate to appoint an arbitrator though there was inherent lack of jurisdiction of the Chief Justice or his designate to pass such order. 52. In my view even if the original applicant did not bring to the notice of the learned designate of the Chief Justice that the arbitration application filed by the applicant was not maintainable before the Chief Justice of this court or the respondent did not raise any objection about the maintainability of the said arbitration application before the Chief Justice of this court and agreed to the name of the learned arbitrator being appointed, since it was a case of lack of inherent jurisdiction of the learned Chief Justice or his designate to pass any order under section 11(6) of the Arbitration Act in view of one of the parties having incorporated outside India, it would not amount to any waiver on the part of the either party under section 4 of the Arbitration Act. In my view, the provisions of section 11(6) or section 11(9) are not derogable and thus the question of waiver under section 4 of the Arbitration Act does not arise. The judgment of Supreme Court in case of Narayan Prasad Lohia (supra) relied upon by the learned senior counsel for the respondent thus does not assist the respondent and is clearly distinguishable in the facts of this case. 55. Insofar as submission of the learned senior counsel for the respondent that the petitioners themselves had applied for an appointment of an arbitrator under section 11 before the Chief Justice of this court, the petitioners are precluded from challenging the order appointing the learned arbitrator passed by the designate of the Chief Justice and also on the ground that the petitioners have admittedly filed a statement of claim and the proceedings are proceeded upto the stage of commencement of evidence is concerned, in my view there is no merit in this submission of the learned senior counsel. The respondents themselves have not raised any issue of jurisdiction before the learned designate of the Chief Justice in the said arbitration application filed by the petitioners under section 11(6).
The respondents themselves have not raised any issue of jurisdiction before the learned designate of the Chief Justice in the said arbitration application filed by the petitioners under section 11(6). In the facts of this case, there was inherent lack of the jurisdiction on the part of the learned designate of the Chief Justice to appoint the learned arbitrator. Merely because the petitioners have filed a statement of claim before the learned arbitrator or have filed affidavit of evidence, that would not confer jurisdiction on the learned arbitrator since he has been appointed by the learned designate of the Chief Justice of this court who had no jurisdiction to entertain the arbitration application filed by the petitioners under section 11(6) in view of the admitted fact that one of the party had incorporated outside India. In any event, since the issue of jurisdiction was not raised by the respondent before the learned designate of the Chief Justice in the said arbitration application, the issue of jurisdiction was deemed to have been rejected by the designate by the learned Chief Justice in the said order. The learned arbitrator thus in my view could not have re-opened the said issue. 61. In my view the powers of the Chief Justice of High Court or his designate under section 11(6) and power of Chief Justice of India or his designate can be exercised only when there is failure of consent of parties though there is an arbitration agreement exist and cannot be equated with powers of court in other proceedings where there was no arbitration agreement recorded between the parties initially. Pursuant to the powers conferred on the Chief Justice of the High Courts and the Supreme Court, courts have framed schemes for appointment of arbitrator and have framed rules. Since the parties had failed to appoint an arbitrator in accordance with the agreed procedure, the assistance of the Chief Justice of the High Court or the Chief Justice of India for appointment of an arbitrator in such a situation is mandatory and not directory. Such powers under section 11(6) or under section 11(9) cannot be exercised by any other court even by consent of parties. Similar powers which vest in the Chief Justice of India under section 11(9) could not have been exercised by the Chief Justice of a High Court or his designate under section 11(6) even by consent of parties.
Such powers under section 11(6) or under section 11(9) cannot be exercised by any other court even by consent of parties. Similar powers which vest in the Chief Justice of India under section 11(9) could not have been exercised by the Chief Justice of a High Court or his designate under section 11(6) even by consent of parties. The provisions under section 11(6) and 11(9) are exception to each other. 62. Supreme Court in case of Zuari Cement Ltd. v. Regional Director, ESIC Hyderabad, (2015) 7 SCC 690 has held that where there is want of jurisdiction, the order passed by the court/tribunal is a nullity or non est. What is relevant is whether the court had the power to grant the relief asked for. Supreme Court has dealt with an order passed by the High Court directing the appellant to approach the ESI Court constituted under section 74 of the ESIS Act for the reliefs which the appellant had claimed in the writ petition. None of the parties to the said proceedings challenged the order of the High Court but subjected themselves to the jurisdiction of the ESIS Court. It is held by the Supreme Court that neither order of the High Court nor the act of the corporation subjecting itself to the jurisdiction of the ESIS Court would confer the jurisdiction upon ESIS Court to determine the question of exemption from the operation of the Act. It is held that by consent, the parties cannot agree to jurisdiction in the court to try the dispute when the court does not have jurisdiction. It is held that the objection as to want of jurisdiction can be raised at any stage when the court lacks jurisdiction, the fact that the parties earlier acquiesced in the proceedings is of no consequence. Though the High Court had directed one of the parties to approach the ESIS Court constituted under section 74 of the ESIS Act and such party had approached the ESIS Court pursuant to the said order passed by the High Court, the Supreme Court having held that the ESI Court could not have decided the said issue involved in the said proceedings, the order passed by the ESI Court was declared the non est. 63.
63. Insofar as submission of the learned counsel for the petitioners that the parties had given consent only in respect of the name of the learned arbitrator who was appointed by the learned designate of the Chief Justice and no consent for appointment of the sole arbitrator is concerned, a perusal of the said order dated 12th June, 2014 clearly indicates that the parties had agreed to the name of a former Chief Justice of Allahabad High Court as a sole arbitrator. Be that as it may, even by consent for appointment of an arbitrator by parties could not have conferred jurisdiction on the learned designate of the Chief Justice under section 11(6) for the reasons recorded aforesaid. In my view the present proceeding is seeking procedural review of the order dated 12th June, 2014 is thus maintainable. The petitioners have made out a case for recall of the order dated 12th June, 2014 passed by the learned designate of the Chief Justice and the said order thus deserves to be recalled. 64. In my view since the designate of the Chief Justice did not have power to appoint an arbitrator in case of international commercial arbitration and such power vest only in the Chief Justice of India under section 11(9) of the Arbitration Act, even such an order passed by the learned designate of the Chief Justice would not confer the jurisdiction on the learned arbitrator though the parties to the arbitration application had not raised any objection about maintainability of the said arbitration application and had acquiesced in the arbitration application filed before the Chief Justice of this court and the same was of no consequence. In my view, the judgment of Supreme Court in case of Zuari Cement Ltd. (supra) squarely applies to the facts of this case. I am respectfully bound by the said judgment. 65. I, therefore, pass the following order:- (a) Order dated 12th June, 2014 passed by the learned designate of the Chief Justice in arbitration application No. 97 of 2013 is recalled. (b) Arbitration Application No. 97 of 2013 is dismissed being without jurisdiction. (c) Review Petition (L) No. 7 of 2016 is allowed in the aforesaid terms. (d) No order as to costs." 6. Placing reliance on Roptonal, Advocate Nankani argued that the factual matrix in Roptonal is almost identical to the present case.
(b) Arbitration Application No. 97 of 2013 is dismissed being without jurisdiction. (c) Review Petition (L) No. 7 of 2016 is allowed in the aforesaid terms. (d) No order as to costs." 6. Placing reliance on Roptonal, Advocate Nankani argued that the factual matrix in Roptonal is almost identical to the present case. In addition to Roptonal, he also placed reliance on Zuari Cement Limited vs. Regional Director & Ors., (2015) 7 SCC 690 to argue that where there is want of jurisdiction, the order passed by a court is a nullity or non-est. He argued that parties cannot confer jurisdiction on a court by consent when it inherently lacked jurisdiction. In this context, he placed reliance on Sushil Kumar Mehta vs. Gobind Ram Bohra (Dead), (1990) 1 SCC 193 , Harshad Chiman Lal Modi vs. DLF Universal Ltd. & Anr., (2005) 7 SCC 791 , State of Orissa & Ors. vs. Brundabadn Sharma & Anr., (1995) Supp3 SCC 249. The crux of his argument is therefore that as the Order was passed by this Court whilst it inherently lacked jurisdiction, the Order is liable to be re-called. He argued that the powers under Section 11 of the Act are not derogable and therefore, the Respondent cannot rely upon the provisions of Section 4 of the Act to contend that the parties have waived their right to challenge the Order. In support of his submissions, he relied upon Jain Studios Ltd. vs. Shin Satellite Public Co. Ltd., (2006) 5 SCC 501 , State of Maharashtra vs. Hindustan Construction Company Ltd. [Review Petition No.2 of 2013 in Arbitration Appeal No. 6 of 2007 in Arbitration Application No.44 of 2003], Soham Shah vs. Indian Film Company Ltd. & Anr., (2016) 3 MhLJ 476 , Kapra Mazdoor Ekta Union vs. Birla Cotton Spinning and Weaving Mills Ltd. & Anr., (2005) 13 SCC 777 . He therefore argued that an order passed under Section 11 of the Act can be subject to review. In the present case, according to him, as the Order was a nullity and non-est, delay in moving the present Review Application is inconsequential. He argued that delay cannot by itself validate an act which is otherwise void ab-initio.
He therefore argued that an order passed under Section 11 of the Act can be subject to review. In the present case, according to him, as the Order was a nullity and non-est, delay in moving the present Review Application is inconsequential. He argued that delay cannot by itself validate an act which is otherwise void ab-initio. He argued that a challenge to the validity of an order which is in itself a nullity or non-est, particularly for want of jurisdiction, can be raised at any stage and in such cases, the question of limitation does not arise at all. He placed reliance on Urban Improvement Trust, Jodhpur vs. Gokul Narain (Dead) by Lrs. & Anr., (1996) 4 SCC 178 and Shaikh Mohammad Murghay & Anr vs. State of Maharashtra & Ors., (2012) 4 MhLJ 771 . In any event, according to him, the Petitioner has made out sufficient cause to condone the delay in filing the present Review Petition on the ground that the Petitioner only learnt of the decision of this Court in Roptonal on or around July, 2018. Mr. Nankhani therefore concluded that the Order be recalled and the present Review Petition be allowed. 7. As opposed to the aforesaid arguments of Mr. Nankhani, Mr. Pratap, Ld. Senior Advocate appearing for the Respondent argued that the Petitioner has failed to make out any sufficient cause to condone the delay in filing the present Review Petition. He argued that the Petitioner's reliance on Roptonal to justify sufficient clause is false and misleading. According to him, as Roptonal was a decision under Section 11, it cannot be treated as a binding precedent. He argued that Roptonal has no precedential value apart from the fact that is has been erroneously decided and is per incuriam. In support of his argument, he placed reliance on State of West Bengal & Ors. vs. Associated Contractors, (2015) 1 SCC 32 and particularly paragraph no. 17 thereof. He argued that the Petitioner ought to have been aware of the Apex Court's decision in SBP & Co. vs. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618 ("SBP") passed earlier in time to Roptonal. He argued that it was not as if the Petitioner had no remedy prior to Roptonal. According to him, the Petitioner always had the remedy of challenging the Order by filing a Petition under Article 136 of the Constitution.
vs. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618 ("SBP") passed earlier in time to Roptonal. He argued that it was not as if the Petitioner had no remedy prior to Roptonal. According to him, the Petitioner always had the remedy of challenging the Order by filing a Petition under Article 136 of the Constitution. He argued that it would be a travesty of justice if at this late stage, when the matter is closed for an award before the arbitral tribunal, the Petitioner herein be permitted to challenge the appointment of the arbitral tribunal. He argued that the merits of an impugned order are not required to be considered at all when considering whether sufficient cause is shown for condonation of delay. He argued that the legality or otherwise of an order is not required to be considered and the court is only concerned with whether sufficient cause is shown for condonation of delay and whether the grounds for condonation of delay are spelt out clearly and distinctly in the application and no negligence or any inaction or want of bona fides is imputable to a party i.e. the delay should not be for reasons which indicate the parties negligence in not taking necessary steps which it would have or should have taken. In support of this submission, he relied upon Municipal Corporation of Ahmedabad vs. Voltas Ltd.,1994 SCCOnLineGuj 78, State of Gujarat vs. Sayed Mohd. Baquir El. Edroos, (1981) 4 SCC 1 , Balwant Singh (Dead) vs. Jagdish Singh & Ors., (2010) 8 SCC 685 , Sandhya Rani Sarkar vs. Sudha Rani Debi & Ors., (1978) 2 SCC 116 , Kamalbai & Anr. vs. Ganpat, (2007) 1 MhLJ 807 . He argued that it would amount to putting a premium on the dishonest conduct of the Petitioner if this Court were to condone the delay and entertain this Review Petition. He argued that the Respondent has incurred legal costs, tribunal's fees and other expense which are over Rs.1.76 Crores which would be completely wasted if the present Review Petition is allowed.
He argued that the Respondent has incurred legal costs, tribunal's fees and other expense which are over Rs.1.76 Crores which would be completely wasted if the present Review Petition is allowed. He argued that the Petitioner has waited to see how the arbitration progresses, the evidence given by witnesses on both sides, the evidence of the expert witness of both parties, how each witness has fared in cross-examination, and the final submissions on merits made by the Respondent so as to assess the Petitioner's chances before filing the present Review Petition. He further argued that the power of review is not an inherent power. In this context, he relied upon Patel Narshi Thakershi & Ors. vs. Shri Pradyumansinghji Arjunsinghji, (1971) 3 SCC 844 . According to him, no power of review is conferred on the Civil Court under the Act. The Act, according to him, rules out any possibility of any implied power of review. Section 11 is final and no intervention in the arbitral proceedings once commenced is permissible. He placed reliance on SBP (supra) and argued that a decision rendered under Section 11 (7) of the Act is final and the remedy, if any, would be a challenge under Article 136 of the Constitution of India. Placing further reliance on SBP (supra) and Rosy Blue (India) Pvt. Ltd. vs. Orbit Corporation Ltd.,2013 SCC OnLine Bom 341, he argued that Section 5 of the Act expressly bars judicial intervention in matters covered under Part I of the Act. Additionally, he placed reliance on N.S. Atwal vs. Jindal Steel & Power Ltd.,2011 Scc OnLine Del 103 to argue that decisions under Section 11 of the Act are final and the person passing such order is thereafter functus officio. He also placed reliance on the decision in State of Nagaland vs. Toulvi Kibami, (2003) 8 SCC 671 to argue that if a judgment has been acted upon, no review of such judgment lies. Thus, the arguments follows that assuming a procedural review lies in the present case, the Petitioner, having acted on the Order, cannot now seek a review as the Petitioner has unconditionally accepted the jurisdiction of the tribunal pursuant to the Order. According to him, the Petitioner's present Review Petition is not a procedural review but a substantive review on merits.
Thus, the arguments follows that assuming a procedural review lies in the present case, the Petitioner, having acted on the Order, cannot now seek a review as the Petitioner has unconditionally accepted the jurisdiction of the tribunal pursuant to the Order. According to him, the Petitioner's present Review Petition is not a procedural review but a substantive review on merits. He places reliance on Ground G of the Review Petition which states that there is an "error apparent on the face of the record". This, according to him must necessarily be construed as a ground for a review on merits and not a procedural review. In this context, he placed reliance on Kapra Mazdoor Ekta Union vs. Birla Cotton, Spinning and Weaving Mills, 2005 13 SCC 372 . He placed further reliance on Shiv Hare Builders vs. Executive Engineer, Provincial Division, Public Works Department & Ors.,2010 SCC OnLine ALL 2309 and Narendra Nath Panda & Co. & Anr. vs. Union of India and 3 Ors.,2007 Supp CutLT 141. He also argued that if a challenge to the jurisdiction of a tribunal is not raised in the Statement of Defence, there is a complete bar to raise such challenge at any subsequent proceedings. In support of this argument, he placed reliance on MSP Infrastructure Ltd. vs. Madhya Pradesh Road Development Corporation Ltd., (2015) 13 SCC 713 and Zee Sports Ltd. vs. Nimbus Media, (2018) 1 MhLJ 349 . He argued that an objection as to lack of jurisdiction has to be raised at the earliest possible opportunity and cannot be allowed to be taken at a subsequent stage. In this context, he placed reliance on Hashan Abbas Sayyad, (2007) 2 SCC 355 . Mr. Pratap also argued that the provisions of Section 11 (2) of the Act are derogable and if the parties have derogated from the same and proceeded before an arbitral tribunal, then, it is not possible for a party to thereafter contend that this Court had no jurisdiction to appoint an arbitrator. In this context, reliance was placed on Narayan Prasad Lohia vs. Nikunj Kumar Lohia & Ors., (2002) 3 SCC 572 . Mr. Pratap argued that assuming both parties were aware of the jurisdictional error, the very fact that both parties proceeded with the hearing on merits thereafter, amounts to estoppel or waiver. Mr.
In this context, reliance was placed on Narayan Prasad Lohia vs. Nikunj Kumar Lohia & Ors., (2002) 3 SCC 572 . Mr. Pratap argued that assuming both parties were aware of the jurisdictional error, the very fact that both parties proceeded with the hearing on merits thereafter, amounts to estoppel or waiver. Mr. Pratap further argued that even after this Court's decision in Roptonal, the Petitioner chose to participate in the arbitral proceedings. He argued that even otherwise, this Court should exercise its discretion and not interfere with the Order. According to Mr. Pratap, in the event the present Review is permitted, the substantial costs incurred by the Respondent would go waste, the Respondent would have lost 7 years in pursuing its claim and therefore, irreparable prejudice, loss and injury will be caused to the Respondent. Mr. Pratap therefore concluded that the present Review Petition ought not to be entertained by this Court. 8. I have considered the aforesaid arguments canvassed by the Petitioner and Respondent. I have also considered the various decisions of the Apex Court and this Court as cited by them. At the outset, it is pertinent to note that it is common ground between the parties that the Respondent herein is a body corporate incorporated outside India and thereby the present arbitration proceedings are an 'International Commercial Arbitration'. Hence, the provisions of Section 2 (1) (f ) are squarely applicable to this matter. In this context, it is now trite law that an Application under Section 11 of the Act in International Commercial Arbitrations can only be preferred before the Apex Court and not before this Court. Hence, there can be little quarrel with the fact that the Order inherently suffers from lack of jurisdiction. Keeping this fundamental defect in the Order in mind, I now propose to deal with the arguments canvassed. 9. In so far as Mr. Pratap's arguments are concerned, the mere participation in the arbitration proceedings no matter to what extent cannot in my opinion, validate an order which order is ex-facie de hors jurisdiction. The law on this is well settled. Parties cannot by consent, vest the court with discretion/ jurisdiction/ powers which it otherwise is barred from exercising under statute. Jurisdiction can be vested only by statute and not by consent and acquiescence.
The law on this is well settled. Parties cannot by consent, vest the court with discretion/ jurisdiction/ powers which it otherwise is barred from exercising under statute. Jurisdiction can be vested only by statute and not by consent and acquiescence. It is well settled that jurisdiction cannot be conferred on a court by consent, acquiescence or waiver where there is none, nor can it be ousted where there is. Apposite from such settled law, I do not agree that merely because the parties 'acted on' the Order, the same can now attain legal sanctity. Mr. Pratap's reliance on State of Nagaland & Anr. vs. Toulvi Kibami & Anr., (2003) 8 SCC 671 in support of his argument is misplaced. In this case, the Apex Court was neither dealing with the provisions of the Act nor with an order which was passed without jurisdiction. 10. In so far as the argument of Section 11 being a derogable provision is concerned, I find that the Respondent's incorporation outside India was not brought to this Court's notice when the Order was delivered. Furthermore, it is an admitted ground that the Petitioner was not present at this hearing. Thus, I do not agree that the parties have 'waived' the present objection by virtue of Section 4 of the Act. The powers conferred by the Act on the Apex Court and this Court cannot be deemed to be derogable. Insofar as judgment of the Apex Court in Narayan Prasad Lohia vs. Nikunj Kumar Lohia & Ors. (cited supra) is concerned, the Apex Court held that Section 10 has to be read along with Section 16 of the Act and is, therefore, a derogable provision. They held so on a conjoint reading of Sections 10 and 16 of the Act. According to them, an objection to the composition of an arbitral tribunal is a matter which is derogable. They held so because a party is free not to object within the time prescribed under Section 16(2). If a party chooses not to so object, there will be a deemed waiver under Section 4. It is against this finding that the Apex Court was unable to accept the submissions that Section 10 is a non-derogable provision. However, in the present case, Mr. Pratap seeks to apply this ratio in context of Section 11 of the Act and attempt at validating an order which was passed without jurisdiction.
It is against this finding that the Apex Court was unable to accept the submissions that Section 10 is a non-derogable provision. However, in the present case, Mr. Pratap seeks to apply this ratio in context of Section 11 of the Act and attempt at validating an order which was passed without jurisdiction. I am afraid I cannot agree with Mr. Pratap's reliance on Narayan Prasad Lohia vs. Nikunj Kumar Lohia & Ors. (supra) in the facts of the present matter. In my view, the provisions of Section 11 are not derogable and thus, the question of waiver under Section 4 of the Act in the present case, does not arise. 11. In so far as delay and latches are concerned, I do believe that the conduct of both parties is deplorable. Both parties participated in the arbitration knowing fully that the Order commencing such arbitration inherently lacked jurisdiction. Whilst it is correct that the parties ought to have raised a grievance at the first available opportunity, I do not believe that delay and latches would prevent this Court from exercising jurisdiction in re-calling an order which is otherwise bad in law. Hence, the question of assessing sufficient cause or otherwise does not arise at all. I am not at present reviewing the Order on its merits. I am limiting myself to assessing whether or not the Order was passed de hors necessary jurisdiction under the Act. Mr. Pratap's reliance on Municipal Corporation of Ahmedabad vs. Voltas Ltd., State of Gujarat vs. Sayed Mohd. Baquir El. Edroos (supra), Balwant Singh (Dead) vs. Jagdish Singh (supra), Sandhya Rani Sarkar vs. Sudha Rani Debi & Ors. (supra), Kamalbai vs. Ganpat (supra) would therefore not be of any assistance to him. I do not agree with Mr. Pratap's argument that the legality or otherwise of an order is not required to be considered and the court is only concerned with whether sufficient cause is shown for condonation of delay. As stated hereinabove, I am at present limiting the scope of this Review Petition only to whether the Order lacked jurisdiction or not. I am not reviewing the matter on merits. I hence believe that the Order, being without jurisdiction, ought to be recalled by this Court. 12.
As stated hereinabove, I am at present limiting the scope of this Review Petition only to whether the Order lacked jurisdiction or not. I am not reviewing the matter on merits. I hence believe that the Order, being without jurisdiction, ought to be recalled by this Court. 12. Having expressly held that I am only limiting myself to whether or not the Order was passed without necessary jurisdiction under the Act, I do not agree with Mr. Pratap's argument that the present Review Petition, being a substantial Review Petition on merits is not maintainable. Firstly, I do not agree that I am at present carrying out a substantive review. Secondly, Mr. Pratap's reliance on Rosy Blue (India) Pvt. Ltd. vs. Orbit Corporation Ltd. (supra) and Shiv Hare Builders vs. Executive Engineer, Provincial Division, Public Works Department & Ors. (supra) would also be of no assistance to him as I have already held that I am restricting myself to a procedural review and not a substantive review. The distinction between a procedural review and substantive review has in fact been recognized by both Ld. Single Judges in their decisions sought to be relied upon by Mr. Pratap. Neither one of the two decisions hold that this Court will be divested of its powers to procedurally review an order admittedly passed without jurisdiction. I believe this Court is not prohibited from exercising its power of review to prevent miscarriage of justice or to correct grave and palpable errors committed by it. This Court's power in this regard is plenary. This Court, being a Court of Record, has a duty to itself to keep all its record in accordance with law. Hence, this Court has a duty and the necessary power to correct an earlier erroneous order. This exercise of procedural review will prevent the miscarriage of justice and correct palpable errors which may have been previously committed. In this context, I draw support from the decisions in Kapra Mazdoor Ekta Union vs. Birla Cotton, Spinning and Weaving Mills (supra), M.M. Thomas vs. State of Kerala & Anr., (2000) 1 SCC 666 , Shivdeo Singh & Ors. vs. State of Punjab & Ors., (1963) AIR SC 1909 and State of Maharashtra vs. Hindustan Construction Company Ltd. (supra). 13. It is also Mr. Pratap's argument that orders passed under Section 11 are final and no intervention in the arbitral proceedings once commenced is permissible.
vs. State of Punjab & Ors., (1963) AIR SC 1909 and State of Maharashtra vs. Hindustan Construction Company Ltd. (supra). 13. It is also Mr. Pratap's argument that orders passed under Section 11 are final and no intervention in the arbitral proceedings once commenced is permissible. However, this argument fails the test of scrutiny in view of the decisions rendered in Jain Studios Ltd. vs. Shin Satellite Public Co. Ltd., (2006) 5 SCC 501 , State of Maharashtra vs. Hindustan Construction Company Ltd. [Review Petition No.2 of 2013 in Arbitration Appeal No. 6 of 2007 in Arbitration Application No.44 of 2003], Soham Shah vs. Indian Film Company Ltd., (2016) 3 MhLJ 476 and Roptonal. I have already noted above that constitutional courts, being courts of record, have the necessary jurisdiction and power to recall their own orders. This jurisdiction and power is inherent by virtue of the fact that they are superior courts of record. This has been recognized in several judgments of the Apex Court [see Shivdev Singh & Ors. vs. State of Punjab & Ors., (1963) AIR SC 1909 and M.M. Thomas vs. State of Kerala & Anr., (2000) 1 SCC 666 . In view thereof, Mr. Pratap's reliance on N.S. Atwal vs. Jindal Steel & Power Ltd. (supra) would not be of any assistance to him as in that case, the Ld .Single Judge carried out a substantive review, which according to the Division Bench was without jurisdiction. The facts in the case of N.S. Atwal vs. Jindal Steel & Power Ltd. (supra) are clearly distinguishable from the present matter. 14. In so far as Mr. Pratap's argument that if a challenge to the jurisdiction of the tribunal is not raised in the Statement of Defence, there is a complete bar to raise such challenge at any subsequent proceedings is concerned, his reliance on MSP Infrastructure Ltd. vs. Madhya Pradesh Road Development Corporation Ltd., (2015) 13 SCC 713 and Zee Sports Ltd. vs. Nimbus Media, (2018) 1 MhLJ 349 is rightly placed qua his proposition. However, unlike in the judgments of MSP Infrastructure Ltd. vs. Madhya Pradesh Road Development Corporation Ltd. and Zee Sports Ltd. vs. Nimbus Media in the present case, the arbitral award has not yet been delivered. This distinction has been recognized by the Ld.
However, unlike in the judgments of MSP Infrastructure Ltd. vs. Madhya Pradesh Road Development Corporation Ltd. and Zee Sports Ltd. vs. Nimbus Media in the present case, the arbitral award has not yet been delivered. This distinction has been recognized by the Ld. Single Judge in his decision dated 31st January, 2017 rendered in Chamber Summons (L) No. 114 of 2017 in Arbitration Petition No. 1698 of 2015. Illustratively, the Ld. Single Judge held : "11. As regard the order passed by the learned Single Judge (R.D. Dhanuka, J.) as a designate under Section 11 of the Act in the case of Soham Shah v/s. The Indian Film Company Limited ,it is the contention of Mr. Jain that it do not have any value as a precedent, in view of the decision of the Apex Court in State of West Bengal. The Apex Court in the case of State of West Bengal has held that orders passed under Section 11 of the Act by the designate of the Chief Justice cannot constitute a binding precedent. Even assuming the order Soham Shah has value as a precedent, it is clearly distinguishable on facts. In this case the Petitioner had approached the learned Single Judge to review the order appointing the arbitrator before the arbitration proceedings were concluded and the award was rendered and it is in that context that the learned Judge held that the order could be recalled in view of the objection to the jurisdiction of the Arbitral Tribunal. Though this decision is rendered on 22 February 2016, the decision of the Apex Court in MSP Infrastructure was not noticed. In the order passed in the matter of Roptonal Ltd., the decision of the Apex Court in the case of MSP Infrastructure was cited before the learned Judge and the learned Judge held that since the award was not rendered, the decision in the case of MSP Infrastructure was not applicable and the question whether such ground can be taken in the Petition under Section 34 of the Act need not be gone into. The two decisions of the learned Single Judge will have to seen, keeping in mind the provision of Section 16(4) of the Act where the Arbitrator has a discretion to permit a challenge to the jurisdiction even after the stage under Section 16(2) is crossed.
The two decisions of the learned Single Judge will have to seen, keeping in mind the provision of Section 16(4) of the Act where the Arbitrator has a discretion to permit a challenge to the jurisdiction even after the stage under Section 16(2) is crossed. However, once the arbiral proceedings are culminated, the dicta of the Apex Court in the case of MSP Infrastructure, will govern. 12. In the present case no objection is raised by the Applicant in the statement of defence, nor during the arbitral proceedings, nor in the petition filed under Section 34 within limitation. No foundation was laid. As rightly contended by Mr. Jain, the Chamber Summons is moved only to delay the proceedings. The amendment sought being a completely new ground after the period of limitation, cannot be permitted to be incorporated. In that circumstances, the prayers in the Chamber Summons cannot be granted. The Chamber Summons is accordingly rejected." In the present case, unlike Roptonal, MSP Infrastructure Ltd. vs. Madhya Pradesh Road Development Corporation Ltd. and Zee Sports Ltd. vs. Nimbus Media, the Petitioner herein had in fact challenged the jurisdiction of the arbitral tribunal under Section 16. Furthermore, the Petitioner herein had also filed re-call applications before the arbitral tribunal before approaching this Court. I therefore, do not agree with Mr. Pratap's argument that the Petitioner is now barred from raising the present challenge. 15. As has been recorded hereinabove, the mandate of Section 11 of the Act is clear. An application under Section 11 of the Act in context of an International Commercial Arbitration can and must only be filed before the Apex Court. With this legal basis, it is difficult to now provide ex post facto sanctity to the Order on any of the grounds argued by Mr. Pratap. The Order was admittedly passed without jurisdiction. Therefore, having held that the Order was non-est in law, I would now be constrained to condone the delay and re-call the Order. 16. The present Review Petition is therefore allowed. The order dated 21st April, 2011 passed in Arbitration Application No. 572 of 2011 is re-called as having been passed without jurisdiction. 17. On costs, Mr. Pratap argued that in the event this Court were to allow the Review Petition, the Petitioner must be directed to compensate the Respondent for the costs incurred which amount to Rs.1,76,15,101/-.
The order dated 21st April, 2011 passed in Arbitration Application No. 572 of 2011 is re-called as having been passed without jurisdiction. 17. On costs, Mr. Pratap argued that in the event this Court were to allow the Review Petition, the Petitioner must be directed to compensate the Respondent for the costs incurred which amount to Rs.1,76,15,101/-. There are various reasons to reject such request. Firstly, it was Mr. Pratap's client who approached the incorrect forum and obtained the Order. Thus, his client cannot now be permitted to take advantage of its own wrong. In my opinion, the amount already expended by the parties is wholly irrelevant in adjudicating upon whether or not the Order can be sustained in law. Given that fact that both parties have taken 8 years to attempt at remedying their ignorance of the law, there shall be no order as to costs. 18. Having answered the questions raised as aforesaid, one cannot ignore that a considerable time of 8 years has lapsed in the present matter. In this context, I note that a challenge was preferred to Roptonal by way of a Special Leave Petition resulting in Civil Appeal No.10395 of 2018. At the hearing of this challenge on 10th October, 2018, the following order came to be passed by the Apex Court : "Leave granted. In Arbitration Application No. 97/2013 filed by the Indian Film Company (Cyprus) Ltd. and another, the parties appeared before the High Court on 12.6.2014 and agreed that arbitration agreement existed between the parties and that by consent, the matter be referred to sole Arbitrator, whose name was suggested by the parties. A single Judge of the High Court passed order on 12.6.2014 in terms of said consent. The Arbitrator thereafter entered upon reference and it appears that the matter proceeded before him for more than a year and half. The parties, in the meantime, had exchanged pleadings and the matter was fixed for oral evidence.
A single Judge of the High Court passed order on 12.6.2014 in terms of said consent. The Arbitrator thereafter entered upon reference and it appears that the matter proceeded before him for more than a year and half. The parties, in the meantime, had exchanged pleadings and the matter was fixed for oral evidence. At this juncture, an application for recall, namely, Review Petition (L) No. 7/2016 was preferred by respondents 1 and 2 herein contending, inter alia, that since one of the parties to the arbitration agreement was a company incorporated in a country other than India, the arbitration in question would be an "International Commercial Arbitration" and accordingly, the appropriate Court before which the application under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act') ought to have been preferred was this Court and not the High Court. The submissions were countered by the present petitioner, submitting, inter alia, that as a result of novation and a scheme of amalgamation sanctioned by the Bombay High Court, the original petitioner no. 1 in the arbitration application stood substituted by an Indian entity and as such, there was no infirmity in the exercise of power under Section 11 of the Act. The High Court accepted the contentions advanced by the Review Petitioners and recalled the order dated 12.6.2014. This order of the High Court dated 8.6.2016 is presently under challenge before us. We need not go into the merits or demerits of the respective contentions of the parties, as during the course of hearing, the parties very fairly submitted that there was absolutely no objection to the name of the Arbitrator and the conduct of the proceedings before the Arbitrator. It would, therefore, mean that the very same Arbitrator could still be appointed. In the peculiar facts of the present case, since the arbitration proceedings had gone ahead before the Arbitrator and since there is no objection either to the name of the Arbitrator or to the conduct of the proceedings, in exercise of our power, we declare that the same Arbitrator shall continue to be the Arbitrator in the proceedings. We must, however, observe that the arbitration so conducted shall be an "International Commercial Arbitration" and if any exigency arises, the Court in question shall be this Court and not the High Court.
We must, however, observe that the arbitration so conducted shall be an "International Commercial Arbitration" and if any exigency arises, the Court in question shall be this Court and not the High Court. Rest of the aspects shall continue to be in terms of the arbitration agreement entered into between the parties. Since almost two years have elapsed after the parties had exchanged pleadings, we give liberty to the parties to file additional documents/pleadings or to effect amendments to the existing pleadings in six weeks from today. The parties shall appear before the Arbitrator on 23.10.2018. In case the date in question is not suitable, the Arbitrator may fix such appropriate date as he thinks fit. All contentions of the parties are kept open. The order passed by the High Court is thus modified to the aforementioned extent and the appeal is disposed of in aforesaid terms. No costs." 19. Considering the aforesaid solution rendered by the Apex Court in its aforesaid decision dated 10th October, 2018, in the interest of an eventual cessation of the present proceedings, the parties may, if they deem fit, approach the Apex Court and request that the above solution rendered by the Apex Court be applied to the present case as well.