The Calcutta High Court has clarified that any application under Section 9 of the Arbitration and Conciliation Act, 1996, arising from a commercial dispute, must be heard exclusively by a designated Commercial Court under the Commercial Courts Act, 2015. Orders passed by non-designated courts, even if otherwise procedurally sound, are void ab initio for lack of jurisdiction. This ruling reinforces the statutory framework established by the 2015 Act and has immediate implications for arbitration practitioners across India.
Background & Facts
The Dispute
The dispute arose from a Development Agreement dated 03.12.2003 between the appellants, Chandra Saha & Anr., and the respondents, A.S. Construction & Ors., concerning the commercial development of immovable property. Disputes emerged over the respondents’ allegations that the appellants intended to breach the agreement by entering into a parallel development arrangement with a third party, thereby undermining the respondents’ rights under the agreement.
Key Facts
- The Development Agreement dated 03.12.2003 contemplated joint development of land for commercial purposes
- Respondents alleged mala fide intent and threatened breach by appellants
- Respondents issued a notice under Section 21 of the Arbitration and Conciliation Act, 1996 on or about 2021
- On 10.02.2022, respondents filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim relief
- The Section 9 application was registered as Misc. Case No.17 of 2022 (Arbitration) before the Additional District & Sessions Judge, Fast Track Court-5, Barasat, North 24-Parganas
- On 04.05.2024, the learned Judge passed an order granting interim relief (impugned in FMAT (ARBAWARD) 1 of 2026)
- Appellants filed a review petition against the 04.05.2024 order
- On 15.12.2025, the same court dismissed the review petition (impugned in FMAT (ARBAWARD) 2 of 2026)
- The Commercial Court for North 24-Parganas was officially notified on 11.02.2021 under the Commercial Courts Act, 2015
Procedural History
- 03.12.2003: Development Agreement executed
- 2021: Notice under Section 21 issued by respondents
- 10.02.2022: Section 9 application filed before Fast Track Court-5, Barasat
- 04.05.2024: Interim order passed by Fast Track Court-5 (impugned in first appeal)
- 15.12.2025: Review petition dismissed by same court (impugned in second appeal)
- 2026: Appeals filed before Calcutta High Court
- 12.05.2026: Hearing and judgment delivered by Division Bench
Relief Sought
Appellants sought setting aside of the orders dated 04.05.2024 and 15.12.2025 on the ground that the court which passed them lacked jurisdiction under the Commercial Courts Act, 2015. No monetary relief was claimed; the challenge was purely on jurisdictional grounds.
The Legal Issue
The central question was whether a court not designated as a Commercial Court under the Commercial Courts Act, 2015, possesses jurisdiction to entertain and decide an application under Section 9 of the Arbitration and Conciliation Act, 1996, where the underlying dispute qualifies as a commercial dispute as defined by the 2015 Act.
Arguments Presented
For the Appellant
The appellants contended that the dispute arose from a development agreement involving commercial exploitation of immovable property, squarely falling within the definition of a "commercial dispute" under Section 2(1)(i) of the Commercial Courts Act, 2015. They relied on Ratan Kumar Agarwal v. M/s Asmi Construction & Ors. and Ashok Saraf and Others v. Asansol Durgapur Development Authority to establish that such agreements are commercial in nature. They argued that since the Commercial Court for North 24-Parganas was notified on 11.02.2021, any proceeding initiated after that date - including the Section 9 application filed on 10.02.2022 - must be heard only by the designated Commercial Court. The Fast Track Court, being non-designated, lacked jurisdiction, rendering its orders null and void.
For the Respondent
The respondents did not contest the classification of the dispute as commercial. They did not argue that the Fast Track Court had jurisdiction. Their submissions focused on the merits of the interim relief granted, not on jurisdictional competence. No counter-argument was advanced to challenge the appellants’ position on the statutory mandate under the 2015 Act.
The Court's Analysis
The Court undertook a statutory interpretation of the Commercial Courts Act, 2015, particularly Section 2(1)(i), which defines "commercial dispute" to include agreements relating to the development or use of immovable property. The Court noted that the Development Agreement dated 03.12.2003 was not merely a land transaction but a structured commercial venture involving investment, development, and profit-sharing - clearly falling within the statutory definition.
The Court emphasized that Section 2(1)(j) of the 2015 Act mandates that all commercial disputes, including arbitration-related applications under Section 9, must be heard by courts designated as Commercial Courts. The notification of the Commercial Court for North 24-Parganas on 11.02.2021 was undisputed. The Section 9 application was filed on 10.02.2022 - after the notification date. Therefore, the jurisdictional mandate was triggered.
"The statutory framework under the Commercial Courts Act, 2015, is not merely procedural but jurisdictional. A court not designated as a Commercial Court has no authority to adjudicate a commercial dispute, regardless of the nature of the relief sought or the stage of proceedings."
The Court further held that the precedents cited by the appellants were directly on point and affirmed that the jurisdictional defect is fatal and cannot be cured by subsequent validation or acquiescence. The orders passed by the non-designated court were therefore void and without legal effect.
The Verdict
The Calcutta High Court set aside both the impugned orders dated 04.05.2024 and 15.12.2025, holding them to be null and void for want of jurisdiction. The appeals were disposed of without any order as to costs. The parties are at liberty to approach the designated Commercial Court for North 24-Parganas to re-file their Section 9 application, if still maintainable.
What This Means For Similar Cases
Jurisdictional Defects Are Fatal and Non-Curable
- Practitioners must verify the designation status of the court before filing any Section 9 application post-2021
- Any order passed by a non-designated court in a commercial dispute is void ab initio, regardless of its substantive correctness
- Applications filed in wrong forums must be challenged on jurisdictional grounds, not merely on merits
Commercial Disputes Are Broadly Defined
- Development agreements involving land use, construction, or profit-sharing are unequivocally commercial disputes under Section 2(1)(i)
- The nature of the underlying transaction, not the form of relief sought, determines jurisdiction
- Even arbitration-related interim applications are subject to the Commercial Courts Act’s exclusive jurisdiction
Procedural Compliance Is Mandatory, Not Optional
- The 2015 Act’s designation scheme overrides all prior court structures, including Fast Track Courts
- Delay in filing or condonation of delay (as granted here) does not cure jurisdictional defects
- Courts must sua sponte raise jurisdictional issues when the statutory framework is clear
