The Kerala High Court recently clarified in M/S. Beta Exim Logistics (P) Ltd. V M/S. Central Railside Warehouse Co., Ltd. that the District Court has the jurisdiction to execute an arbitral award and the Commercial Court has not been conferred such jurisdiction under the Commercial Courts Act, 2015.
The court relied on Shaji Augustine v. M/s. Chithra Woods Manors Welfare Association [2021 SCC Online Ker. 9840], where it was observed that the procedure to be followed for execution of an arbitration award was not mentioned anywhere in the Commercial Courts Act and there was nothing to indicate that the jurisdiction of other courts had been excluded. The court also analysed Section 15 of the Commercial Courts Act, 2015 to infer that after the establishment of commercial courts, applications under the Arbitration and Conciliation Act, 1996, pertaining to commercial disputes with a specified value, pending before a Civil Court were to be transferred to Commercial Courts. However, this does not include suits and applications already reserved for final judgment by the civil court prior to the establishment of Commercial Courts and also execution petitions.
In the matter at hand, a sole arbitrator had passed an award, for which the decree holder filed for execution before the District Court, Ernakulam. However, the District Judge transferred the petition to the Commercial Court under Section 15 of the Act. The jurisdiction of the Commercial Court was challenged by the petitioner. However, the Commercial Court was of the view that it had a vested right to execute arbitral awards. The said order of the Commercial Court was challenged by the petitioner.
The court observed that the execution petition was filed in the District Court, after Commercial Courts were established in Kerala by way of the Act. Hence, it was a freshly filed petition and not a matter pending before the District Court. Therefore, the invocation of Section 15 of the Act by the District Court is violative of the Commercial Courts Act, 2015, the court observed. The court was of opinion that the District Court erred in transferring the matter to the Commercial Court and ordered the matter to be transferred back to the District Court, Ernakulam.