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Report No. 176

2.4.11 Necessity for a separate provision in sec. 42 as to the forum where subsequent applications including those under section 34 to set aside the award are to be filed in cases arising under section 8 - proposed section 42 (3):

Here we are filling up an omission in sec. 42 of the 1996 Act in as much as it was not noticed that the action could be filed in Courts subordinate to the Principal District Court. The question is as to what is to be done in the event of the application being allowed and an award being passed by the arbitral tribunal and as to where the objections or subsequent applications are to be filed. This aspect will again be dealt with in discussion under Section 42.

Under the old Act of 1940, in view of the very general definition of 'Court' in section 2 (e), objections to the award could be filed under sec.39 of that Act in the same court in which the legal proceeding was stayed and which made the reference to arbitration. Here Section 2 (1) (e) defines court differently. What is to happen if the action under sec. 8 is filed before a Judicial authority which is a Court subordinate to the principal District Court. Firstly, one would think prima facie that under the 1996 Act, objections to the award could be filed before the same 'judicial authority' i.e., the subordinate Court which made the reference.

But Section 42 refers only to a 'court' as defined in Section 2 (1) (e). Secondly, In view of the enlarged meaning proposed to be given to the words 'judicial authority', as including quasi-Judicial statutory authorities, it is not possible to direct objections to the award to be filed before "judicial authorities" which are not courts in the strict sense and which are only quasi judicial statutory authorities. At the same time it is necessary to see that applications for setting aside awards are filed uniformly in one court (This will be so except under the proposed section 8A to same extent).

We proposed to resolve these two issues arising under sec. 42 in the context of sec. 8. Section 42 requires that if an application has been filed in a court, then all subsequent applications under the Act are to be filed in the same Court. In the case of section 8 which relates to reference by a 'judicial authority' having original jurisdiction, if the judicial authority is the Principal District Court or the Court of the Principal Judge, City Civil Court or the High Court in its original jurisdiction, sec. 42 can apply in all its terms.

The action under sec. 8 can also be one before a court inferior status to the above principal court. In such a situation, we propose that the subsequent applications should be filed in the Principal Court of the District or City, as the case may be, as aforesaid and not in the inferior Court.

Similarly, if the initial action is before a quasi-judicial authority like the District Consumer Forum or the State Commission or the National Commission - all of which have also original jurisdiction - and where the said authorities refer matters to arbitration, all subsequent applications should be filed not before those tribunals which might have made the references to arbitration but the applications have to be filed in the Court as defined in Section 2 (1) (e).

To this effect, we are rectifying an omission in sec. 42 and we are clarifying the position by adding a sub-section in Section 42, viz., Section 42 (3). In view of what we have stated already under sec.5, there is no question of such orders on the jurisdictional issues passed on the application referred to in sec.8 being challenged under sec.115, Code of Civil Procedure Code, 1908 or Letters Patent or High Court Acts or under any remedy provided by the special law applicable to the judicial authority.

All these remedies are clearly excluded. Of course, in cases where the 'judicial authority' is subordinate to the High Court, an application may perhaps be filed under Art. 227 of the Constitution of India. The Report of the UN Commission (see paras 62, 63 extracted earlier) accepts the availability of a constitutional remedy. After all Art.227 is also discretionary. So far as future applications under sec. 34(1) or other applications in matters where reference to arbitration is made under sec. 8, see the discussion under sec. 42, in para 2.30.1 and the relevant sub section (3) of section 42 in para 2.30.3 and 2.30.6.

The Arbitration and Conciliation (Amendment) Bill, 2001 Back

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