M.G. Mohanty vs. That State of Odisha

Abstract

The Commercial Courts Act 2015 (hereinafter referred to as the "CC Act") was established to speed up the resolution of commercial disputes promptly and with as little interference as possible in the highest courts. The law also gives the Commercial Court jurisdiction to hear commercial arbitration proceedings. Although the intention is noble, the legislators inadvertently left jurisdictional inconsistencies in the law, resulting in a conflict with the provisions of the Arbitration and Conciliation Act, of 1996. The conflict of jurisdiction arises due to the distinction between the commercial courts established by law, presided over by Civil Judges Senior Division, and the provisions outlined in the Arbitration and Conciliation Act, 1996 (AC Act). According to the AC Act, exclusive jurisdiction to adjudicate disputes related to arbitration lies with the Chief Civil Court of the respective district. This discrepancy has given rise to uncertainty regarding the authority of newly established Commercial Courts to entertain applications under the Arbitration Act. While a definitive legal resolution to this jurisdictional conflict remains elusive, the Madhya Pradesh High Court, following the Appellate Court's precedent, has determined that irrespective of the claim's value, cases pertaining to arbitration must be adjudicated within the purview of the District Civil Court. It has been observed that commercial disputes connected to arbitration, as governed by Sections 9, 14, 34, and 36 of the Arbitration Law, fall under the jurisdiction of a commercial court situated within the domain of a district judge or an additional district judge. No Class I Civil Judge or any Small Claims Court can adjudicate disputes.