In a recent judgment, the Bombay High Court reiterated that in terms of Section 10, Section 12 and Section 2(i) coupled with Section 15(2) of the of the Commercial Courts Act, where the subject matter of arbitration is a commercial dispute of a ‘specified value’, Commercial Courts have exclusive jurisdiction. It was further held that even if the relief of injunction (as sought in the present facts) is not susceptible to monetary value, the valuation of the real subject matter of arbitration has to be taken into consideration to determine the ‘specified value’.
The judgment was pronounced by the Bombay High Court in the matter of D.M. Corporation Pvt. Ltd. Vs. State of Maharashtra, Writ Petition No. 3119 of 2018, decided on 05.04.2018.
Following a dispute between the parties, the Petitioner approached the District Court, Satara, under Section 9 of the Arbitration Act and Conciliation Act, 1996 seeking the relief of interim injunction restraining the Respondents from terminating the said Agreement.
Subsequently, an application was filed by the Respondents contending inter-alia that this arbitral dispute between the parties relates to ‘commercial dispute’ and the subject matter of the dispute being above the ‘specified value’, the Arbitration Application is required to be transferred to the specially constituted Commercial Court as per Section 15 of the Commercial Courts Act. The trial Court passed an order of transferring the Arbitration Application to the Commercial Court, namely, District Judge-1, Satara.
The Petitioner resisted the application contending that the relief which the Petitioner is claiming is simpliciter of injunction and no particular relief is asked, which can be of a ‘specified value’ as contemplated under Section 12 of the Commercial Courts Act; therefore the Civil Court has the jurisdiction to decide the Arbitration Application.
The Bombay High Court noted that if the submission of the Petitioner that this being an application simpliciter for injunction, Civil Court alone will have the jurisdiction to entertain it, was to be accepted, then the very object of enacting Section 10(3) and of establishing the Commercial Courts will be frustrated. The Court held that Section 10 of Commercial Courts Act clearly provides for exclusive jurisdiction of the Commercial Courts in respect of Arbitration matters, where the subject matter of an arbitration is a Commercial dispute of a ‘specified value’. Thus, if Section 10 of the Act which pertains to ‘jurisdiction in respect of arbitration matters’, Section 12 of the Act which pertains to ‘determination of specified value’, and, Section 2(i) of the Act which defines ‘specified value’, coupled with Section 15(2) of the Act are read together, then there remains no doubt that, where the subject matter of arbitration is a commercial dispute of a ‘specified value’, which is not less than Rs.1 crore, then such matter needs to be transferred and decided by the Commercial Court alone, wherever it is established. It was held that sub- section 10(3) of the Act is all encompassing and does not exclude from its purview even the application under Section 9 of the Arbitration Act in whichever, words it is drafted and whatever relief, final or interim, claimed therein, whether in the form of injunction or otherwise.
The Court also dealt with the objection of the Petitioners that the relief of injunction is not susceptible to monetary value, by holding that the Court has to see the real nature of the relief sought. In the facts of the case, the real nature of the dispute was the arbitration agreement, the subject matter of which was above Rs.1 crore; it is a dispute of commercial nature.