Karnataka High Court
Betamax Limited vs State Trading Corporation on 29 March, 2022
Author: B.M.Shyam Prasad
Bench: B.M.Shyam Prasad
1
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF APRIL, 2019
PRESENT
THE HON'BLE MR. L. NARAYANA SWAMY,
ACTING CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE ASHOK G.NIJAGANNAVAR
A.P. IM No.5 of 2017
C/W
A.P.EFA No.3 of 2017
IN A.P. IM No.5 of 2017
BETWEEN:
BETAMAX LIMITED
A COMPANY ORGANISED UNDER THE LAWS OF
MAURITIUS, HAVING ITS OFFICE AT
LA TOUR KOENIG,
POINTE AUX SABLES, MAURITIUS
REPRESENTED BY ITS DIRECTOR,
MR VEEKRAM BHUNJUN ... PETITIONER
(BY SRI.DHYAN CHINNAPPA, SENIOR COUNSEL FOR
SRI.PRADEEP NAYAK & SRI.VIKAS MAHENDRA, ADVS.)
AND:
1. STATE TRADING CORPORATION
A MAURITIAN BODY CORPORATE SET UP
UNDER THE PROVISION OF THE STATE
TRADING CORPORATION ACT, 1982 (ACT 24/1982,
LEGISLATION OF REPUBLIC OF MAURITIUS)
HAVING ITS REGISTERED OFFICE AT
2
55 BUSINESS ZONE
EBENE CYBERCITY 72201, MAURITIUS
REPRESENTED BY ITS GENERAL MANAGER
2. NEW MANGALORE PORT TRUST
A PORT ESTABLISHED UNDER THE
MAJOR PORT TRUST, ACT, 1963, HAVING ITS
REGISTERED OFFICE AT
PANAMBUR, MANGALORE - 575 010
D.K. DISTRICT, KARNATAKA
REPRESENTED BY ITS CHAIRMAN ... RESPONDENTS
(BY SRI.GANAPATHI HEGDE, ADV. FOR R2;
SMT.K.S.ANASUYA DEVI, CGC FOR UNION OF INDIA
SRIYUTHS HIROO ADVANI, SHREYAS JAYSIMHA,
ASIF LAMPWALA, SHEIKH YUSUF ALI,
MADHOOJA MULAY, ADVS. FOR R1)
THIS PETITION IS FILED UNDER SEC 9 OF THE
ARBITRATION AND CONCILIATION ACT 1996, AND AMENDMENT
ACT 2015 (NO.3/2016) PRAYING TO: A. ORDER ATTACHMENT
OF THE CARGO DETAILED IN THE SCHEDULE WRITTEN
HEREUNDER AND RESTRAIN THE RESPONDENT NO. 1, ITS
AGENTS, SERVANTS OR ANY OTHER PERSON CLAIMING
THROUGH OR UNDER IT, ITS ASSIGNEES OR SUCCESSORS,
FROM SELLING, ALIENATING OR OTHERWISE REMOVING ANY
OF THE CARGO DETAILED IN THE SCHEDULE WRITTEN
HEREUNDER, OUTSIDE THE JURISDICTION OF THIS HON'BLE
COURT; IN ORDER TO SECURE THE AMOUNT AWARDED BY THE
ARBITRAL TRIBUNAL IN ARB NO.084 OF 2015 DATED
05.06.2017 (ANNEXURE -E) AND ETC.,.
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A.P. EFA NO.3 OF 2017
BETWEEN:
BETAMAX LIMITED
A COMPANY ORGANISED UNDER THE LAWS OF
MAURITIUS
HAVING ITS OFFICE AT
LA TOUR KOENIG
POINTE AUX SABLES
MAURITIUS
REPRESENTED HEREIN BY ITS DIRECTOR
MR.VEEKRAM BHUNJUN ... PETITIONER
(BY SRI.DHYAN CHINNAPPA, SENIOR COUNSEL FOR
SRI.PRADEEP NAYAK & SRI.VIKAS MAHENDRA, ADVS.)
AND:
STATE TRADING CORPORATION
A MAURITIAN BODY CORPORATE SET UP UNDER THE
PROVISIONS OF THE STATE TRADING CORPORATION
ACT, 1982 ACT 24/1982, LEGISLATION OF
REPUBLIC OF MAURITIUS) HAVING ITS
REGISTERED OFFICE AT 55 BUSINESS ZONE
EBENE CYBERCITY 72201
MAURITIUS
REPRESENTED BY ITS GENERAL MANAGER
... RESPONDENT
(SRIYUTHS HIROO ADVANI, SHREYAS JAYSIMHA,
ASIF LAMPWALA, SHEIKH YUSUF ALI,
MADHOOJA MULAY, ADVS. FOR R1)
THIS PETITION IS UNDER SEC.47, 48 AND 49 OF THE
ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO: I.
TO ENFORCE THE AWARD PASSED BY THE TRIBUNAL DATED 5
4
JUNE 2017 IN ARB NO.084 OF 2015 AND EXECUTE THE AWARD
FILED HEREWITH IN THE EXECUTION PETITION ANNEXED
HEREWITH. II. PASS SUCH OTHER ORDER AS THIS HON'BLE
COURT MAY DEEM FIT AND PROPER IN THE INTEREST OF
JUSTICE.
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDER ON 07.01.2019 AND COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, ASHOK G
NIJAGANNAVAR., MADE THE FOLLOWING:-
ORDER
APIM No.5/2017 is filed under Section 9 of the Arbitration & Conciliation Act, 1996, (for short, `the Act') for interim orders and the other AP-EFA No.3/2017 is filed under Section 47, 48 and 49 of the Act, as amended by the Amendment Act, 2015, for enforcement of the award dated 05.06.2017.
2. These two petitions were posted for admission on 07.01.2019. The learned counsel for the first respondent raised the following preliminary objections regarding jurisdiction, etc.
(i) Arbitration proceedings started prior to amendment to Arbitration & Conciliation Act, 1996 and the amendment being prospective, Amendment Act which has come into 5 effect on 23.10.2015 does not apply to the present proceedings and the Court to enforce foreign award is either Principal Civil Court of original jurisdiction in a district, and includes the High Court of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit. If it is to be held that this Court has jurisdiction, then it is the learned Single Judge and not the Division Bench.
(ii) In view of Commercial Courts Act, a Commercial Division to be set up in the High Court. Then the matter will have to be heard by a Single Judge.
(iii) Right to appeal conferred under Section 37 of the Act, will be affected by virtue of matter being heard by a Division Bench.
(iv) Since the amendment Act does not apply to the present proceedings, application under Section 9 of the Act cannot be filed.
3. It is necessary to decide first whether this Court has jurisdiction to hear these proceedings or it is the principal Civil Court of original jurisdiction in a district. The decision on the 6 other points raised for consideration whether to be gone into or not is depending upon decision on the first point.
4. The learned counsel for the petitioner contended that whether the Act applies prospectively or retrospectively is irrelevant in the context of the change of forum from the District Court to the High Court. The procedural amendments which change forum or the procedure always operate retrospectively unless the Amendment Act provides otherwise specifically. The learned Senior Counsel in this regard placed reliance on the decision in Board of Control for Cricket in India v. Kochi Cricket (2018 (6) SCC 287). It is stated, the present proceedings were filed on 22.11.2017, which is after coming into force of Amendment Act on 23.10.2015 and therefore the Amendment Act applies to the present proceedings.
5. On the other hand, the learned Counsel for Respondent No.1 submits that notice of arbitration having served on May 14, 2015, in terms of Section 21 of the Act, the arbitration proceedings commenced well before coming into 7 force of Amendment Act on 23.10.2015 and therefore the Amendment Act does not apply to the present proceedings. The learned Counsel placing reliance on Ardee Infrastructure Projects Pvt. Ltd., v. Anuradha Bhatia & Ors of the Delhi High Court (Judgment delivered on: 06.01.2017 + FAO (OS) No.221/2016) and Global Aviation Services Pvt. Ltd. v Airport Authority of India of the Bombay High Court (Commercial Arbitration Petition No.434 of 2017), contended that reference to "Court" in Section 48 of the Act, would be a court as defined under Section 2(1)(e) of the Act and it is the "the principal Civil Court of original jurisdiction", which in this case would be the District Court at Mangalore. It is further contended that if this Court were to hold that Amending Act of 2015 applies, then as per Section 2(e)(ii), it refers to a Single Judge of this High Court and not to the Division Bench. The learned Counsel submits that when the Act prescribes the "Court" for considering the petitions in question, Circular dated August, 22, 2016, is of no consequence and matter will have to be referred to the Single Judge. It is also contended referring to Sections 6, 8 & 9 of the Karnataka High Court Act, 1961 and Rules made there under that only Single 8 Judge can hear petitions under Section 9 and Sections 48 to 49 of the Act and not the Division Bench.
6. We have given our anxious consideration to the respective submissions made by the learned Senior Counsel for the petitioner and the learned counsel for the respondent No.1.
7. The amendment brought to the Act includes Section relating to definition Section 2 of the Act also. It is, therefore, first of all we have to decide, whether the Act applies to the present proceedings or the Amended Act.
8. Section 21 of the Act deals with commencement of arbitral proceedings, which reads as follows:
"21. Commencement of arbitral proceedings.- Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent."9
9. Further Section 26 of The Arbitration & Conciliation (Amendment) Act, 2015, which prescribes application of the amended Act, reads as follows:
"26. Act not to apply to pending arbitral proceedings.- Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act."
10. In the instant case, it is the contention of Respondent No.1 that notice of arbitration is dated 15.05.2015, a copy of the same is produced at Annexure-D at Page No.215. This is not in dispute. However, it is the contention of the petitioner that Amendment Act came into force on 23.10.2015 and the present proceedings were filed on 22.11.2017, based on the date of filing the present petitions and thus the Amendment Act, 2015 applies to the present proceedings. Considering the provisions of Section 21 of the Act and Section 26 of the Amendment Act, it is the date of commencement of arbitral proceedings which is an 10 essential criteria and not the date on which the present petitions are filed before this Court. Therefore, date of commencement of arbitral proceedings being prior to coming into force of Amendment Act on 23.10.2015, it is the Act which is applicable to the present proceedings and not the Amendment Act 2015. The decision in Board of Control for Cricket in India v. Kochi Cricket (2018 (6) SCC 287) on which reliance is placed by learned Senior Counsel for the petitioner, cannot be of any help for his contention that the Amendment Act, 2015 is retrospective and it is applicable to the present proceedings. It is held in Para-54 of the judgment that whether certain provisions are clarificatory, declaratory or procedural and therefore retrospective, is a separate and independent enquiry, which we are not required to undertake in the facts of the present cases, except to the extent indicated above, namely, the effect of the substituted Section 36 of the Amendment Act.
11. Next comes the "Court", which has jurisdiction to deal with the present proceedings. The word "Court" is defined under Section 2(1)(e) of the Act as follows:
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"2(1)(e). "Court" means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes".
12. It is noticed that under Section 2(1)(e) it excludes certain Courts. The exclusion clause excludes any Civil Court inferior to such Principal Civil Court or any Court of Small Causes to exercise jurisdiction or to entertain the petition or application under the Act. The exclusion is specific. On a conjoint reading of inclusion and exclusion clauses of Section 2(1)(e), it would emerge that Legislature in its wisdom thought it necessary to confer jurisdiction to decide the questions forming the subject- matter of a suit under the Act with the "Principal Civil Court" of a "District" and by excluding any other Civil Court of a grade inferior to such Principal Civil Court or any Court of Small Causes. The words "Principal Civil Court" is defined in Section 14 of Karnataka Civil Courts Act, which reads as under: 12
"Section 14. Jurisdiction of District Court.-(1) The District Court shall be deemed to be the Principal Civil Court of original jurisdiction within the local limits of its jurisdiction".
13. The two sections namely Section 2(1)(e) of the Act and Section 14 of Karnataka Civil Courts Act make it clear that "Principal District Judge" of that particular District would be the Principal Civil Court of original jurisdiction within the local limits of its jurisdiction, which would be entitled to decide the questions forming the subject-matter of arbitration. Thus, Principal Civil Court of original jurisdiction in a District would mean and include only the Principal District Judge of the District. In the instant case, it is the Principal District Judge, at Mangalore is the Court, which has jurisdiction to deal with the present petitions.
14. For the above reasons and the view taken by us on Point No.1, the decision on the other points raised by the learned counsel for the Respondent No.1 as noted above, is not necessary. Office is directed to return the papers to the 13 petitioner so as to present them before the learned Principal District Judge, at Mangalore. All the questions raised in the petitions are kept open to be gone into there. For statistical purpose, these petitions are accordingly disposed of.
Sd/-
ACTING CHIEF JUSTICE Sd/-
JUDGE akd