The High Court · 2025

Judgment

1. 2 3 "'Respondent No'1/Petitioner Somuri Purnachandra Rao, s/o Sri Srinivasarao' Aged about 68 years' Occ: Business r/o Flat No.2A, snJn, sorOn" ApartmenG Plot No.54, Road No 1' Jubilee Gardens Beside H'itL i"v"t"' Kothagua' Serilingampally.'Mandal nr"g;.dJy Districl500084 Smt.somuri Laxmi, w/o Sri Purnachandra Rao' Age-d- about 63 years' Occ: Business rio Flat No.2A, Sn"n, sorohu Apartmenis Plot No.54, Road No'1' Jubilee Gardens Beside fr"tnl i"V"t'' K'othaguda' Serilingampally tyl'anlat - - -l"n"tpond6nt.No'2/RespondentNo'2 Rangareddy District-50008i Smt.Boppana Sarvani, wlo Sri Venkaieswara Rao' Aged about 44 years' Occ' Business, r/o Flat f.fo.aOf Eefnnc" n'"n" Court' Road No 5 Banjara Hills' Hyderabad-500033 "'Respondent No'3/Respondent No'3 IA NO: 10F 2025 Petition under Section 151 CPC Praying that in the circumstances stated in the affidavit filed in suPP ort of the Petition, the High Court maY be pleased to staY the operation of orders dated 05 02.2025 Passed in C.O.P.N o.131 of 2O25 bY Principal SPecial Court in the Cadre of District Judg e for Trial and Disposal of Commercial DisPutes, Hvd erabad and be Pleased to substitute the Present arbitrator with anY former iudge of this Hon'ble Court Counsel for the Petitioner: Mr' V' Prasad Rao c;;;;;l for the Respondent No'1: Mr' M' satyanaravana ;;il;i irr. Cortt made the following: ORDER ior tne Respondent Nos'2 and 3: Mr' Rusheek Reddv THE H, II')lLE JUSTICE MOUSHUMI BHAT.rACHAI:lyA AND THE H(]I\I'BLE JUSTICE B.R.MADHUSUDHAN R3 C CN'II, ITEVISION PETITION No.739 of 2025

Mr'. V. Prasir i [:ari, l,.ar ned counsel appearing for the petitioner. Mr. M.Satlana:irr i t.r, learned counsel appearing lor the respond]nt \l l Mr Rusheri [r ic i ]ciuned counsel lor-the respondent Nos.2 anl 3. ORDER (P r I r n'ble. Justice Moushumi Bhattacharla) The pre jlnr Civil Revision petition is hled a11ain.t it r order 1. dated 05.(.2,. ()25 passed by the Commercial C() lrt at Hyderabacl r -r (),rr.rmercial Originat pctition No. l3 L oI 2O2 L

2. By thc i tr rLrgned order dated OS.O2.2O2S, tlte Cornr rercial Cor-rrt alloa,,.cj , re petition filed by the responde.-rt \o. 1 under section 29A o' "hc Arbitration and Conciliation Act, 1!),16, for extending -hr: rr rn<raLe of the learned Arbitrator rc r 6 nror ths in an ongoing rrJi rrltion proceedings between thc rctltro,r r. the respondenr .,.1<; I eLnd others. The Commercial C tr_irt ext :nded the manda_e ol ,-re,Arbi[rator from 24.Og.2024 till 23.i 3.2 )25.

3. The nra r(r was first taken up ol-r 07 .|,3.2O2a and continued lir.. L f :u, days thereafter. The Court war; rnforr:d on 25.03.2025 thi, r Lhc mandate of the Arbitrator hacl cc me to an I I j I I I i i I I I t 2 end on 23.03.2025. This fact was recorded in the proceeding sheet dated 25.O3.2025 Therefore, Lhe adjudication of whether the Commercial 4. Court had the jurisdiction to extend the mandate of the Arbitrator became academic and has remained so since

23.O3.2025. Learned counsel appearing for the petitioner' however' 5. insisted for the Court to express its opinion on the question of law involved in the mattcr, i.e', whether the Commercial Court was Lhe "Court" as defined under section 2(1)(e) of the 1996 Act and whether it was authorised to grant an extension of the manda[e. 6 The cornerstones of the discussion are section 2(i)(e) and section 29 A$l of the Act

7. Section 2(1) of the Act defines several terms and expressions used in the Act, making the dehnitions specific to Part I of the Act and also specific to the context Section 2(1) of the Act begins with the following words: " In this Part, unless the contert otheni'se requires "" " ( i*-7 3 Ser::ior' 2(1)(e) of the Act defines the ternt ( t( urt, as under: "'lt i1L the case of an arbitration otlLer tt an i,rt< ntctlional commercial arbitration, tl,.e ,rtrt,tr:i tal (i ) I Court of oigittal juisdiction in a (llsinct_ ( nd rr t l'tcles the High Court in exercise of ts ,:;,dtrt ,ry a ltmaL ctuil luisdiction, hauing jurisd.icti_on ta d.)c de li t' auestions forming the subject mo-ter .)_l- he u,'it tration if the same had. been the su,tject.nt:tl er o_l t suit, but does not includ_e ong Ciuit Coun ,-t- a gr c tle infeior to such pincipal Ciuil Cou.rt. l a ry Co, t"t oJ Small Causes; |it, it Lhe case of international :onit,lerc d[ .tt) 7,111161n, the Iligh Court itt exerc.i.e of i , ,,, ,.. ,. U rtr t t'tctL ciuil lurisdiction, hauing juiscltctiott tc: 1et:i I e lhc questions fonning the subject mat er rtl t ,e .tr.):.trotion if the same had. been the sub ject, r,fltt ,r 'tJ t si.tr.t, and in other c.lses, a High Cc1ur.t l,tit,it g -,1rrt;,liction to hear appeals from d.ecree:, oj. .:,-ttt r s ..u't t,dinate to that High Court;,' B Sectirrr u (L)(e)(ii) of the Act contemplares inr,r:rre :ional commercia. ,rrf:i rations. Since the present arlritraritrr falls under Parl I r[ rie Act, the definition of ,,Court,, in the (]ont lxt of internationrrl c c I nrne rcial arbitration is not rek,van t a Ld is hence not sel oL 1 above. To clarify, part I applies t() arl)itri tions where the plar:e ,r. arbitration is in Inclia: section 2(:2) of the Act. I I I I I I l I l I i I i I i , , { 4

9. It is evident from section Z(t)(e)(i) of the Act that the "Court" would be the Principal Civil Court of original jurisdiction in a district and would include the jurisdictional High Court. Section 2(1)(e)(i) does not contain any language which specifically cxcludes the High Court from arbitrations under Part I of the Act, i.e., those that are not international commercial arbitrations.

10. "lnternational commercial arbitration" is dehned under section 2(1)(f) of the Act as an arbitration relating to disputes arising out of commercial lega1 relationships under Indian law, where one of the parties resides or is incorporated outside lndia' As stated above, scction 2(1) of the Act declares that the definitions thereunder shall be dctermined by the context in which the definitions are used ln the present case, it is undisputed that the Arbitrator was appointed by the High Court in an application made by the petitioner herein under section 1 1(6) of the Act. Therefore, the High Court, exercising its special powers of appointment under Section 1 1(6) of the Act, was lhe appointing authority of the Arbitrator in a case involving an arbitration other than international commercial arbitration' ,!{isP.:-€-.7 .'' t':.r ,,, 5 1 1, Adrn:t:r:c h., in the instant case, the ArbitrtLtor corr menced the arbitra:rol and continued it until the petition .r,as lileci by the resrolci 'f t No.1 for extension of the ntanciair: of the Arbitrato:.

12. Exlerls r,:t of the mandate of an Arbitra_or rs F under ser:trorL t)9A of the Act which limits the t me ior_ an arbitrzrr trr.'trd tithin specihed windows. The timc r.r, non-inter ti. Lio -:al commercial arbitration is twelr,e nlrrrrl the clate rf co.rrpletion of pleadings as proviclccl r_rtrrlr,.. 23(a) of tt r: Ar: . Section 294(3) of the Act permitr; thr: pa extend th(: pe r.rc d beyond twelve mon[hs by consenL - brrt cap of an arlc[tional six months from the expiry. o[. tl_re months, aJ .,Lrr:rficd under section 29 A(1) of the AcL rovided naking imc for s from ;cc -ion -tics to with a twelve 13, Sectio.r 2!rn141 of the Act contemplates a scerrtrrLo u,here the arbitrirl Ar,, rrd is not made within twelve rnol ths + six months. ln strt.t srtuations, the Court can stcp in :t,rcl r xtcnd thc mandate o.' t-re Arbitrator upon an applicaLion flcc b1_ either of the partie.i rr der section 29l{(5) of the AcL. .1..1e Ctorrr may extend th( r-narLdate only for sufficient cause anc r_ll any conditior-r v'h:c.r tray be imposed by the court. Tee crorrr arso has the po\r ( r t,) substitute the Arbitrator under secturn i 9.4(6) i I ; t :i t l I i I I I I I 6 of the Acl, within the overall scheme and object of the Act, to ensure efficient and cxpeditious arbitrations with minimal judicial supervision

74. Sections 2(1)(e)(ii) and 29A of the Act have been discussed only to clarify the issue before us: that is whether the Commercial Court could have extended the mandate of the Arbitrator.

15. Section 2(1)(e) read with section 11(6) of lhe Act is hierarchy-sensitive for the purpose of determining the order of Courts for deciding issues of appointment, termination of Arbitrators and extension of their mandate' The High Court forms the focal point in both section 2(1)(e) and section 11(6) of the Act in non-international commercial arbitrations This means that while section 1 1(6) of the Act confcrs exclusive powers on the High Court lor appointment of an Arbitrator' se ction 2( 1)(e )(i) operates in tandem in the same scenario i e ' domesticarbitrationswheretheHighCourt,asthePrincipal Civil Court of original jurisdiction in a district' retains the exclusive power to extend and terminate the mandate of [he Arbitrator. ::x.+,7 ! I i t l

16. "h : : L,:ts ol the present case place the locus ltrr rly on the I{igh Orrtrr srncc the Arbitrator u.as appoin Lcd 5.. ther High Court n a I application under sec[ion 1 1(6) of thc _Ar t. f[qs, lhe l{igJr (l( I rrr. as the appointing authority, ;rlso bcc lmes the exclusi'zc d{,,r.ding authority in matters concerning I jtr: ,xtension of the Ar O1r-ltor,s mandate. Our view is basr:d r.n a conjoint reading ol' ri(r rtion 11(6) and section 2(f )(e)(ii) rrf tht_. .A :L rvithin thc spc'r: Itcr i totual context of the case.

17. Ir'l ,ur \riew, section 42 of tne Act, rtlictr rli -ecLs all subsequ et' t ; pplications arlsrng out of an Arbi[ra[io:t A[ reement or arbit-al rrcceedings to the court which rr:ceir..-r:r he first applicatror. rt r der part I, falls under a different applicablc catrrgor .. and is applications other than appoinlnr(.trt of an l(l Arbitratc r L;rLrl :r section I 1(6) of the Act I8. Alrhou l[ counsel for the petitioner has takcrr rt,c, ul.se to sectiorr r l2 of Lhc Act, we are of the opinion lhrr: sr:c .too 42 applies to ,Ln1 drspute concerning the arbitratio 1 a! re e lent or sttuationri irrir; ng after the commencement of thc art tration proceedin gr; -re appolntment of an Arbitrator under sc( t_ion 1 1 of the Act or:<:r- pir:s a distinct space, where the ap,porrrtin, Court tS specifi ;a. 11 Cesignated i.e., the High Court fc,r dr mestic ) , 8 arbitrations and the Supre me Court for International CommercialArbitrations.Incontrast,section42oftheAct simply refers to the "Court" without any specific nomenclature' lg. It is also important to highlight the potential for anomaloussituationsifanyCourtotherthantheHighCourt assumes the power to extend the Arbitrator's mandate' For instance,theArbitratormaybeappointedbytheHighCourt(as in the present case) and the mandate of the Arbitrator thereafter extended in an applicalion under section 29 h(4\ or (5) of the Act orsubstitutedundersection2g4.(6)bythePrincipalCivilCourt in a district. The parties may subscquently resort to a fresh appointment under section i 1(6) The new appointment would necessarily have to be filed beforc the High Court under section 11 (6) of the Act. Therefore, knocking the doors of different Courts at different stages of the arbitration process would be contrary to the hierarchy envisaged under the Act and also in violationofmaintainingthecontinuityofthathierarchy.The Act contemplates unifying the procedures by requiring all subsequent appiications for extension' termination' or substitution to be made only to the High Court where the Iligh Court was the appointing authority in the frrst instance' While the Principal Civil Court having originai jurisdiction in a district II i I i i I I I I I F-::i?''l-:'r'' I -r i L 9 1s attt i()r-:,ed to make such decisions in r onsensual apporirt .rr ir s be[ween the parties, the situatro I chang:s l.lr:n the appointment is made by the Jlreh an trpplt :i: t on under section 1 1 (6) of the Act. Court on entirely 20 t' r r I ludicial support for this view in s;evr:.al c ecisions. 21 . 1, ) j.. :;ron Bench of the High Court of Eiom la\- 1t Cloa in sheelcL ( rLr-tr(g,re vs. vijay v choutgure and othersi recrded a relcren:t, lr the question of whether an appli:aiir n under section .1:;;.1r ) ol' the Act would lie before the t{igh C or rt or the Civil CoL r-t ha\.ing jurisdiction in the case o1. a lomcstic arbitrati,r r. "-re Bombay High Court opined that in thr: evcnt an Arbitral 'I -itr, nal constituted by the High Court r:rrde _ scction 1 1(6) iaiL. tr c:omplete the proceedings within ti t s ipulated period / c .x e n l ed period, then an application 294.(4) ,r r,u < I lie to the High Court in case of il r omestic arbitrari rr . iingle Bench decisions of the DellLi H;gh burt in Ouittgton I itc,.ttce put. Ltd.. Vs. Bindig a Nagar2and the, ,)alcutta High CoLrr i: t Anit Kumar Gupta Vs. Dipak prasttd: zLlso ;upport our viev' rone of the decisions cited on berhalf ol the Ltr:(l('r sec lion 'u1.p.ruo.88 r,f . ),,.1 cated Oi.OB.2O24 ' 2024 DHC g tlt, '1zozr; r car _ 2.! HC) I , ,l I I I 10 i respondent No.1 bear any relevance to the issue at hand ie' whether the power to extend the mandate of an arbitrator is conferredonaCourtinferiortotheHighCourtwherethe Arbitrator was appointed by the High Court in an application under section 11(6) of the 1996 Act'

22. We thus have no doubt that the extension of the Arbitrator's mandate in the present case was erroneously permitted by the Commercial Court' We wish to reiterate that the issue has become academic in iight of the expiry of the mandate on 23.03.2025 ' We also clarify that we have not expressed any opinion on the petitioner's prayer for substitution oftheArbitratororthereasonsforseekingsuchsubsti|ution.

23. C.R.P.No.739 of 2025, along with a1l connected applications, is accordingly disposed of in terms of the above There shal1 be no order as to costs' //TRUE COPY' "'*3,8?iNYf;:A'EFR DY I { SECTI OFFICER To, 1 The Additional Special Court in the Cadre of District Judge for Trial and 2 J 4 5 vKan-r/gh ami:gt:t**trta*,*r,s',','l' Two CD CoPies HIGH COUR'r DATED:10t0t1,r2025 { ORDER \.. o( rtE li r., ,. \. o^ o o t 01 JUt ffiE 1(' C) CRP.No.73$ of 2025 D t' -?/ I DISPOSING C)F THE CIVIL REVISiCIN PETTTION 1 7,7(