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Andhra Pradesh High Court Asserts Exclusive Jurisdiction of Commercial Courts for Arbitration Award Execution

In a recent judicial pronouncement, the High Court of Andhra Pradesh has clarified that execution petitions for arbitration awards must be filed solely before designated Commercial Courts. Other Courts, such as Civil or District Courts, do not possess the authority to entertain such applications, according to the ruling.

The bench, comprising of Justices D.V.S.S. Somayajulu and Duppala Venkata Ramana, elucidated that an execution or enforcement petition for an arbitration award, meeting specified value criteria, is considered an application under Section 15 of the Commercial Courts Act, 2015. This section facilitates the transfer of such applications from Civil Courts to Commercial Courts.

The court iterated that once a Commercial Court is designated for a particular jurisdiction, any execution petition must be routed exclusively through that designated court. Any attempt to file in an alternate court would render the orders passed null and void in the eyes of the law.

Case Background

The genesis of the case can be traced back to an arbitration award on October 13, 2015, pertaining to a dispute between the involved parties. Post the award, a challenge was mounted under Section 34 of the Arbitration Act, and these challenge proceedings are presently pending. Subsequently, an execution petition was initiated before the Principal District Judge in Anantapuramu. However, this petition was later transferred to the Family Court in Anantapuramu.

In the interim, the Andhra Pradesh government designated two Special Commercial Courts for the state, one in Visakhapatnam and another in Vijaywada. According to Section 15(2) of the Commercial Courts Act, any pending petition in a Civil Court must be mandatorily transferred to the Commercial Court once designated.

However, contrary to this provision, the Family Court proceeded with the case and issued an order dated May 5, 2022, for the issuance of a sale certificate to the Decree Holder regarding the subject property. The petitioner, discontented with this order, sought recourse by filing a revision petition before the High Court.

Legal Contestations

The petitioner challenged the impugned order on various grounds, including that the value of the award exceeded Rs. 32 crores and surpassed the commercial value delineated in the Commercial Courts Act. They contended that, with the designation of the Commercial Court, the Civil Court was divested of its inherent jurisdiction to decide the petition, rendering any order passed by it legally null and void.

Conversely, the respondent argued that the Commercial Courts Act exclusively deals with the hearing and disposal of commercial disputes, including arbitration disputes. They emphasized that execution applications should continue to be filed before regular Civil Courts.

Court's Deliberation

The Court meticulously scrutinized the provisions of the Commercial Courts Act, 2015, particularly Sections 6, 15, and 16, in conjunction with Section 38 and Order XXI of the CPC. Drawing on precedent judgements, the Court affirmed that once a Commercial Court is designated, it alone possesses the authority to decide all applications related to specified commercial values, encompassing execution petitions.

The Court underscored that "applications" under Section 15(2) should be construed expansively to encompass execution petitions. This interpretation aligns with the objective of establishing specialized commercial courts to expedite dispute resolution. The Court emphasized that a narrow interpretation could result in a scenario where commercial courts can adjudicate disputes but lack the power to enforce or execute the decree.

The Court ruled that the Family Court lacked the inherent jurisdiction to issue the impugned order, rendering it null and void. Consequently, the Court directed the pending execution petition to be transferred to the Commercial Court for fresh adjudication.

This detailed ruling by the Andhra Pradesh High Court reiterates the exclusive jurisdiction of Commercial Courts for the execution of arbitration awards, emphasizing the imperative of adhering to the designated legal channels.Case Title: Obulapuram Mining Company v. R.K. Mining Private Limited, CRP Nos. 2183 of 2022