Court rules on territorial jurisdiction under Arbitration and Conciliation Act, impacting National Highways Act disputes
In a pivotal judgment, the Punjab and Haryana High Court has declared Faridkot as the juridical seat for entertaining objections under Section 34 of the Arbitration and Conciliation Act, 1996. This decision was rendered in a consolidated hearing of 95 Civil Revision Petitions, addressing the contentious issue of territorial jurisdiction in cases of statutory arbitration under the National Highways Act, 1956.
The petitioners, whose lands were acquired by the National Highways Authority of India (NHAI), challenged the jurisdiction of the Bathinda court, where objections to the arbitration awards were initially filed. The awards were passed by the Commissioner of Faridkot Division, who conducted proceedings in Faridkot, prompting the Additional District Judge in Bathinda to return the objections due to lack of jurisdiction.
The High Court, presided over by Justice Jasgurpreet Singh Puri, examined the statutory provisions and the conduct of arbitration proceedings. It highlighted the absence of an agreement between parties on the arbitration seat, given the statutory nature of the arbitration. The Court applied principles from the Supreme Court's judgment in BGS SGS Soma JV v. NHPC Ltd., concluding that the venue of arbitration proceedings becomes the seat in the absence of contrary indications.
The Court emphasized that the award was passed in Faridkot, thus establishing it as the juridical seat. It rejected arguments regarding practical difficulties and case load at Faridkot, underscoring that jurisdiction is determined by legal principles rather than convenience.
The judgment mandates that objections under Section 34 must be filed in Faridkot, setting aside previous orders by the Bathinda court that had restored objections there. This ruling clarifies the jurisdictional landscape for statutory arbitrations under the National Highways Act, influencing future disputes involving land acquisition and compensation.
Bottom line:-
Arbitration - Determination of territorial jurisdiction for objections under Section 34 of the Arbitration and Conciliation Act, 1996 in statutory arbitration cases governed under the National Highways Act, 1956 - The venue where all proceedings were held and the award was passed is deemed as the seat of arbitration.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 34, 31(4), 20; National Highways Act, 1956 Sections 3G(5), 3G(6)
Yashpreet Singh v. Union of India, (Punjab And Haryana) : Law Finder Doc id # 2886140
