The Single Bench of the Delhi High Court in the case of Ramacivil India Constructions Pvt Ltd vs Union of India consisting of Justice Yashwant Varma reiterated that the venue restriction provision as contained in Section 42 of the Act would have no application to enforcement proceedings.
Facts
The two enforcement petitions were filed before this Court for enforcement and execution of the Arbitral Award passed in November 2017. Against the same, the Judgement Debtor had preferred a petition u/s 34 of the Arbitration and Conciliation Act, 1996 [“of the Act”] before the Dehradun (Commercial) Court. The court dismissed the petition because it lacked jurisdiction. Against the above order by the Dehradun (Commercial) Court, an appeal was pending before the Uttarakhand High Court on that day.
In this appeal, no constraint on the Award's enforcement exists. The court noted that the 2017 Award hasn't been enforced.
Contentions Made
Respondent: It was contended that the judgment debtor made a substantial objection to the Dehradun (Commercial) Court's ruling, thus enforcement should have stayed until the Uttarakhand High Court decides the appeal. A question of jurisdiction was also raised. According to an Office Memorandum ["OM,"] clause 2.2 requires the judgment debtor to deposit 75% of the Award in an Escrow Account, which will be released if the claimant provides a bank guarantee. Moreover, as per Section 42 of the Act, since the appeal was ongoing before the Uttarakhand High Court, the enforcement petition should also be filed there.
Observations by the Court
The court recognized that the competent authority referred to arbitration within its territorial jurisdiction, the arbitral proceedings were held and continued in Delhi, and the Award was likewise delivered in Delhi. It further emphasized that the aforementioned Office Memorandum is at most a recommendation to PSUs. It cannot bind the powers of the Court as granted by Section 36 of the Act.
It also opined the Uttarakhand High Court appeal didn't fall under the ambit of Section 42. In Vijay Gupta v. Renu Malhotra, the Division Bench of the Court found that Section 42 of the Act's venue restriction provision does not apply to enforcement proceedings. It was of the considered opinion that it could not be said that the enforcement petition has been wrongly instituted before this Court.
Order
The Bench allowed the judgment debtor to consequently place and deposit the entire amount as due and payable in terms of the Arbitral Award of November 2017. The aforesaid deposit was to be affected by the Registrar General of this Court within a period of six weeks from the day of order. These matters were to be listed on 30.01.2023.
Case: Ramacivil India Constructions Pvt Ltd vs Union of India
Citation: OMP (ENF.) (COMM.) 164/2021
Bench: Justice Yashwant Varma
Decided on: 5th December 2022
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