FASTEST FINGER FIRST’ IN ARBITRATION

 

‘‘Fastest-Finger First/FFF’ means that part of the program where a question is asked to the selected participant(s), who in turn shall answer the same. The first participant to correctly answer the question shall be entitled to proceed to the Hot Seat as the Hot Seat Contestant[1]. This article explores application of the FFF principle in Arbitration, with reference to determination of jurisdiction of Courts..

Two provisions of the Act[2], appears to have direct application of FFF principle.  Section 11(11) and Section 42 of the Act, are living examples.  Section 11(11)[3] considers the situation where more than one request for appointment of arbitrator is filed before different High Court, while Section 42[4] is a general provision regarding jurisdiction. In either case, where and arbitration request or an application under the Act has been made to a court, that court and not other court shall have jurisdiction to entertain such application or request.

The need for a provision in the nature of Section 42 is evident from a reading of Section 2(1)(e)(i) of the Act[5], where the term Court is defined.  It not only identifies Court as the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of ordinary original civil jurisdiction but also refers to the territorial jurisdiction of such Courts.  The place where the questions forming the subject matter of the arbitration is decided would determine the territorial jurisdiction of the Courts.  The ‘subject matter of the arbitration’ appears to be synonymous with the term cause of action’ arises.  The obvious consequence would be that Court in more than one place would have territorial jurisdiction, unless otherwise agreed by the parties.

In this context the determination of the place of arbitration under Section 20 of the Act assumes importance.  The form of the arbitration award prescribes, the mention of the place of arbitration, in the award[6].  These measures are intended to restrict the application of the FFF principle during the stage of challenge of awards[7], and preferring appeals[8].

The Apex Court has discussed the application of the FFF principle in BBR (India) Private Limited vs. S.P. Singla Constructions Private Limited[9]. The relevant discussion can be found in paragraph 32 of the judgement.

32. Section 42 is to no avail as it does not help the case propounded by the Appellant, as in the present case the arbitrator had fixed the jurisdictional 'seat' Under Section 20(2) of the Act before any party had moved the court under the Act, being a court where a part or whole of the cause of action had arisen. The Appellant had moved the Delhi High Court Under Section 34 of the Act after the arbitral tribunal vide the order dated 5th August 2014 had fixed the jurisdictional 'seat' at Panchkula in Haryana. Consequently, the Appellant cannot, based on fastest finger first principle, claim that the courts in Delhi get exclusive jurisdiction in view of Section 42 of the Act. The reason is simple that before the application Under Section 34 was filed, the jurisdictional 'seat' of arbitration had been determined and fixed Under Sub-section (2) to Section 20 and thereby, the courts having jurisdiction over Panchkula in Haryana, have exclusive jurisdiction. The courts in Delhi would not get jurisdiction as the jurisdictional 'seat of arbitration' is Panchkula and not Delhi.

The immediate conclusion of these discussion is that where the place of arbitration is not defined in the arbitration agreement, or where the parties have not agreed to the place to the arbitration, the parties may approach the Courts or the High Court for the purpose of interim measures and appointment of arbitrators.  The relevant consideration would be the place where the subject matter of arbitration arose, and the FFF principle may apply.  However, when the place of arbitration is agreed or determined by the Arbitrator, the FFF principle may not have any application.  

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[1] https://www.lawinsider.com

[2] Arbitration and Conciliation Act 1996

[3] Section 11(11) of the Arbitration and Conciliation Act reads as follows “Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made under the relevant sub-section shall be competent to appoint”

[4] Section 11(11) of the Arbitration and Conciliation Act reads as follows: “Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all sequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.”

[5] Definition of the term ‘Court’1[(e) "Court" means--

(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

[6] Section 31 (4) AA Act requires the date and place of arbitration to be mentioned in the award.

[7] Under Section 34 of the AA Act.

[8] Under Section 37 of the AA Act.

[9] BBR (India) Private Limited vs. S.P. Singla Constructions Private Limited (18.05.2022 - SC) : MANU/SC/0668/2022