Dispute Does Not Become Commercial Just Because It Is An Arbitration Matter: Chhattisgarh High Court

The Chhattisgarh High Court has recently held that a dispute does not become a “commercial dispute” merely because it arises out of arbitration, setting aside the transfer of a land acquisition compensation challenge to a Commercial Court.

A Division Bench of Justice Sanjay K. Agrawal and Justice Sachin Singh Rajput observed that "A dispute will not become a commercial dispute merely because it is an arbitration matter and and jurisdiction in respect with an arbitration matter has been dealt with separately under Sections 10 and 15(2) of the Act of 2015. Every application filed under Section 34 of the Act of 1996 cannot be transferred to the Commercial Court under Section 15(2) of the Act of 2015 and only such applications will be required to be transferred, which are relating to a commercial dispute of a specified value covered under Section 2(1)(c) read with Section 2(i) of the Act of 2015."

The court clarified that while an award passed by a statutory arbitrator under the National Highways Act, 1956 can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996, such challenges can be heard by a Commercial Court only if they fall within the definition of a “commercial dispute” and meet the specified value requirement under the Commercial Courts Act, 2015.

Referring to a State Government notification dated December 20, 2023 issued by the Law and Legislative Affairs Department, which included arbitration cases within the purview of Commercial Courts subject to pecuniary limits, the court said:

"It is made clear that though notification dated December 20, 2023 issued by the State Government through the Law and Legislative Affairs Department includes arbitration cases, by virtue of Section 10 of the Act of 2015, where the subject-matter of an arbitration is a commercial dispute of a specified value and nature as prescribed therein, only then the said arbitration case would come within the jurisdiction of Commercial Court", the bench added.

The case arose from the compulsory acquisition of land belonging to Anand Khedia and his family for a national highway project. A compensation award was passed on June 1, 2018 by the competent authority. Their plea for enhancement was rejected by the statutory arbitrator, the Commissioner, Bilaspur Division, on September 13, 2021.

The landowners then approached the District Judge, Bilaspur, under Section 34 of the Arbitration and Conciliation Act, 1996 on November 22, 2021.

Following a State Government notification dated December 20, 2023, the District Judge, by order dated February 7, 2024, transferred the matter to a Commercial Court, noting that the dispute value fell between Rs 10 lakh and Rs 50 lakh.

The Commercial Court subsequently rejected the challenge on October 21, 2025, affirming the arbitrator's decision.

Aggrieved, the landowners filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13 of the Commercial Courts Act, 2015, contending that their land acquisition compensation dispute did not qualify as a “commercial dispute” and therefore could not have been transferred to a Commercial Court.

The National Highways Authority of India also submitted that in the absence of any notification by the Central Government under Section 2(1)(c)(xxii) of the Commercial Courts Act, 2015, disputes arising out of land acquisition for national highways cannot be treated as commercial disputes.

Accepting this, the High Court held that Commercial Court jurisdiction applies only where the dispute satisfies the requirements of being a “commercial dispute” and having the specified pecuniary value.

Since the Central Government has not notified disputes arising from land acquisition for national highways as “commercial disputes,” the Court said such cases cannot be taken up by Commercial Courts and must instead be heard by the competent civil court, here the Principal District Judge.

It then set aside both the February 7, 2024 order that had shifted the case to the Commercial Court and the October 21, 2025 decision passed by that court, noting that it lacked jurisdiction to decide the matter.

The case has now been sent back to the Principal District Judge, Bilaspur, for a fresh hearing.

For Appellants (Anand Khedia & Ors.): Advocate Ratnesh Kumar Agrawal.

For Respondents (Commissioner-cum-Arbitrator & Ors.): Advocates Amit Buxy, Dhiraj Kumar Wankhede.