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2015 Supreme(Bom) 462
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MRS. ROSHAN DALVI, J.
M/s. Gateway Park Paper Industries & Ors. - Plaintiffs
Vs.
Arjo Wiggins Chartham Ltd. - Defendants
SUIT NO.783 OF 2007
Decided On : 31st March, 2015
Mr. Mohan Bir Singh, Adv. a/w. Ms. Fatima Darbar, Adv. for plaintiffs.
Mr. Rohan Rajadhayaksha, Adv. a/w. Mr. Ram Kakkar, Adv. i/b. AZB Partners for defendants.
The main legal principle established was that the submission to the jurisdiction of a specific court under a contract excludes the jurisdiction of other courts, as per the agreement and the intention of the parties.
Headnote:
Territorial Jurisdiction - Contract Dispute - Agreement dated 1st January, 1999 - Clause 16(2) - English Law - English Courts - Indian Courts - Conferment of Jurisdiction - Exclusion of Jurisdiction - Single Court Jurisdiction
Fact of the Case:
The suit involved a dispute over territorial jurisdiction to try the suit of plaintiff Nos.1, 2, and 3. Plaintiff No.2, a limited company, had entered into an agreement dated 1st January, 1999 with the defendant, a manufacturing company, which included a clause submitting to the jurisdiction of English Courts. The plaintiffs sought recovery of commission, losses, and expenses under the agreement.
Finding of the Court:
The court found that plaintiff No.2 had submitted to the jurisdiction of English Courts under the agreement dated 1st January, 1999, thereby barring its suit in the Indian Court. However, plaintiff Nos.1 and 3 were not debarred from suing in the Indian Court. The court separated the trial of plaintiff No.2 from plaintiff Nos.1 and 3, allowing the suit to proceed for the latter.
Issues: The main issue was whether the Indian Court had territorial jurisdiction to try the suit of all plaintiffs, considering the submission to the jurisdiction of English Courts by plaintiff No.2 under the agreement dated 1st January, 1999.
Ratio Decidendi: The court held that the submission to the jurisdiction of English Courts by plaintiff No.2 under the agreement dated 1st January, 1999 excluded the jurisdiction of Indian Courts for plaintiff No.2's suit. However, plaintiff Nos.1 and 3 were allowed to proceed with their suit in the Indian Court.
Final Decision: The court ruled that it had no jurisdiction to try the suit of plaintiff No.2 but had jurisdiction to try the suit of plaintiff Nos.1 and 3. The trial of plaintiff No.2 was separated from the trial of plaintiff Nos.1 and 3, and the suit proceeded for the latter.
1. The issue of territorial jurisdiction has to be decided as per the order of the Division Bench dated 2nd March, 2015.
2. The issue of jurisdiction is framed as follows :
1. Whether this Court has territorial jurisdiction to try the above suit of plaintiff Nos.1, 2 and 3.
3. The suit is filed by three plaintiffs. Plaintiff No.1 is a partnership firm. Plaintiff No.2 is a limited company. Plaintiff No.3 is the director of plaintiff No.1 and a partner of plaintiff No.2. The defendant is a manufacturing company.
3. As per the averments in paragraphs 2, 3 and 4 of the plaint the plaintiff No.2 was appointed as the sole selling agent of the defendant. This was under three agreements dated 30th January, 1978, followed by the agreement dated 1st October, 1989 and then the agreement dated 1st January, 1999, the last of which subsisted between the plaintiff No.2 and the defendant.
4. The agreement dated 1st January, 1999 Exh.C to the plaint has been entered into and signed only by plaintiff No.2 as the agent and the predecessor-in-title of the defendant as the company.
5. Under clause 16(1) of the agreement the parties agreed that the agreement would be governed and construed in accordance with English law.
Under clause 16(2) the parties agreed that the agent (plaintiff No.2) submitted to the jurisdiction of the English Courts. It appointed an attorney's office as his agent in Mumbai for service of process. Under the said agreement the parties excepted the company (the defendant) to apply to any Court for injunction or other like remedy against the agent from committing breach or anticipated breach of that agreement or for damages or other consequential relief.
6. What is material to consider in the determination of the territorial jurisdiction of this Court is the submission by the agent (plaintiff No.2) to the jurisdiction of English Courts. The agent (plaintiff No.2) would, therefore, not submit to the jurisdiction of any other Courts. The English Courts would, therefore, have the agreed jurisdiction in respect of the agreement.
7. The conferment jurisdiction upon English Courts as agreed by the parties would be upon their position under the contract entered into by them.
8. The manufacturing company was in England. The agent was in India. The agent was appointed as such for the sale of products in India. The agent agreed to accept the appointment upon the terms and conditions in the agreement.
Under clause No.3 of the agreement the agent was to promote and extend the sales of the companies products, refer enquiries and orders to the company, take orders for the sales of the products of the company, submit details of the orders to the company, act loyally and faithfully to the company, obey the company's orders and instructions etc.
Under clause 5 of the agreement the company undertook to fulfill the orders submitted by the agent, not to appoint any other person as the agent for sale of its products, contribute towards the cost of advertising etc.
Under clause 7 of the agreement the company was to pay commission to the agent @ 2.5% of the net invoice of the products' sale. Under clause 8 of the agreement travel and other expenses incurred by the agent were to be incurred by the agent in the performance of its duties.
Under clause 10 of the agreement the company could terminate the appointment if the agent defaulted in performing its obligations, compounded with its creditors, became bankrupt, etc.
Under clause 11 of the agreement upon termination of the agency, the agent had to promptly return all the stocks and samples and list of customers to the company. The rights granted by the company to the agent would be relinquished. Neither party would be liable for loss or damage arising from the termination. The agent waived any compensation that would otherwise be payable by reason of the termination.
Under clause 13 of the agreement the notice to any party was to be sent to the address given.
Under clause 15 of the agreement all the previous agre
