A writ petition was admitted by the Madras High Court on April 30th, 2021 challenging the Madras High Court Arbitration Rules, 2020 on grounds of it being ultra vires of the Arbitration and Conciliation Act, 1996 and the Commercial Courts Act, 2015. The writ petition has been filed by Sivesh Varshan.
The Arbitrations Rules, 2015 have been challenged on the grounds of being violative of Section 10 referred with Section 15 of the Commercial Courts Act, which deals with the commercial disputes as to the subject matters of arbitration, states that all such matter shall be heard and disposed of by the Commercial Division, constituted in the High Courts, and for that end, all the proceedings pertaining to Arbitration and Conciliation Act to the said courts and provides for the pending cases to be decided in accordance with procedure enshrined under Commercial Courts Act. Despite the rule, all the Principal District Courts in Tamil Nadu have been designated as Commercial Courts, treating petition under Arbitration and Conciliation Act as any other petition.
Additionally, the petition throws light on the provision of Arbitration and Conciliation Act. Section 29, clause 5 of the Arbitration and Conciliation Act can be invoked to seek obedience of order of Tribunals, under the Contempt of Courts Act. However, the impugned Rules do not contain any procedure to be followed in such cases.
The petition also mentioned the lack of provision for delegation of powers of any appropriate government under Rule 6 of Order XI of the Commercial Courts Act, which deals with electronic records of arbitral proceedings, designating the Union Government as the appropriate government for making appropriate rules for the Commercial Courts Act. It was, therefore, not appropriate on the part of the High Court to alter or twist those rules by way of subordinate legislative authority underSection 82, providing for the High Courts to make rules consistent with the Arbitration and Conciliation Act, 1996 in the light of the absence of parliamentary approval.
A Division Bench comprising Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy has fixed the matter for hearing on July 2nd, 2021.