The main legal point established in the judgment is that the Court with jurisdiction to entertain an application under Section 11 of the Act is the one where the cause of action and the application were first made, as interpreted by the Supreme Court.

JUDGMENT :

NEELA GOKHALE, J.

1. The petition seeks appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (“Act”) to decide the dispute that has arisen between the parties out of agreements dated 1st October 2011 and 26th September 2013. Both the agreements are executed at Kolkata, West Bengal. The Petitioner (“Hyundai”) is a company engaged in the manufacture and supply of heavy construction equipment having all India operations. The Respondents (“Saumya”) is also a company engaged in the business of mining and undertaking infrastructure projects. Saumya has their registered offices in Kolkata.

2. By agreement dated 1st October 2011, Hyundai agreed to deliver to Saumya specified equipment for a purchase consideration. The agreement contains schedule pertaining to installments in which the purchase price would be paid by Saumya to Hyundai. Clause 25 of the agreement pertains to reference to arbitration in case of any dispute. It reads as thus:

“25. If any dispute arises between the parties out of or in connection with the agreement whether in the nature of interpretation or meaning of any term hereof or as to any claim by one against the other, or otherwise the same shall be referred to arbitration of a common arbitrator if agreed upon. Otherwise two arbitrators shall be appointed by each party hereto and the arbitration shall be governed by the Arbitration Act, 1996. The arbitration proceedings shall be conducted at Kolkata, India. This Agreement is executed on the day, month and year first above written, at Kolkata.”

3. The 2nd Agreement dated 26th September 2013 is titled ‘Agreement of Sale in Installment’. By way of this agreement, Hyundai agreed to give a hydraulic excavator and other equipment on hire to Saumya. Saumya intended to use the said equipment for excavation. The hire charges have been mentioned in the agreement. Clause 31 of the agreement is the arbitration clause. It reads as thus:

“31. If any dispute arises between the parties out of or in connection with the agreement whether in the nature of interpretation or meaning of any term hereof or as to any claim by one against the other, or otherwise the same shall be referred to arbitration of a common arbitrator if agreed upon. Otherwise to two arbitrators one to be appointed by each party hereto and the arbitration shall be governed by the Arbitration Act, 1940. The arbitration proceedings shall be conducted at Pune, India.”

4. There arose some disputes between the parties out of the 2 agreements leading to Hyundai issuing a demand notice dated 16th October 2015 to Saumya. Saumya failed to reply. The Petitioner thus filed Arbitration Petition No. 265 of 2016 in the Kolkata High Court. The Kolkata High Court appointed a Court Receiver to take possession of machinery and other equipment. However, since the Respondent had shifted the machinery to areas unknown to the Petitioner, time was extended for the Court Receiver to take possession of the remaining machinery. Thereafter, by notice dated 16th April 2019, Hyundai invoked the arbitration clause and conveyed to the Saumya that Hyundai had nominated its arbitrators but requested Saumya to nominate its arbitrator if they did not agree to the arbitrator appointed by the Petitioner. Saumya issued reply dated 27th May 2019 to the lawyers of Hyundai through their own counsel. While denying the claim of the Petitioner, Saumya also denied any existing juridical relations between the parties and also raised the issue of limitation in its notice-reply. The Petitioner has thus filed the present petition seeking appointment of an arbitrator.

5. Mr. Wable, learned counsel appearing for the Petitioner contends that since arbitration clause in agreement dated 26th September 2013 specifies that the arbitration proceedings shall be conducted at Pune in India, it is this Court that is vested with jurisdiction to entertain an application under Section 11 of the Act. Conceding that while both agreements