Limitations in extending bar under Section 42 Arbitration and Conciliation Act, 1996

By merely filing an application before any Court, the bar under Section 42 cannot be extended, when another application is filed by a party before another Court, which has got jurisdiction. The Madras High Court in its recent decision held that section 42 of the Arbitration and Conciliation Act, 1996, cannot be invoked unless the parties disputing the jurisdiction proves that the Court which entertained the first application has the jurisdiction to entertain such application. In other words, to invoke the bar of section 42 it is all the more important that any party disputing the jurisdiction of the court must establish that the court which entertained the first application at the earliest point of time, has the jurisdiction. The Court further observed that the primary object and intend of the legislation is to avoid multiplicity of proceedings and to discourage Forum shopping at the instance of either of the party to the arbitration agreement. M/s. Surya Pharmaceuticals Ltd. Vs. M/s. First Leasing Company of India Ltd. (12.11.2013, Madras HC)