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2017 Supreme(Cal) 349

IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
SOUMEN SEN, J.
Hi-Tech Systems & Services Limited - Plaintiff
Versus
DILO Amaturen & Anlagen GMBH & Another - Defendants
G.A. Nos. 1201 & 1318 of 2017 & C.S. No. 19 of 2017
Decided On : 12-05-2017

Advocates Appeared:
For the Plaintiff :Pratap Chatterjee, Surojit Nath Mitra, Sr. Advocates, Anirban Roy, Sankarshan Sarkar, Micky Chowdhury, S.N. Pyne, Subhasis Pyne, Advocates.
For the Defendants :Abhrajit Mitra, Sr. Advocate, Rajshree Kajaria, Satadeep Bhattacharya, Uttam Sharma, Advocates.

The main legal point established in the judgment is the binding nature of the Forum Selection Clause and the significance of the governing law in determining the appropriate forum for adjudication.

Headnote:

Forum Selection Clause - Termination of Agreements - Clause 10.2, Clause 12 - The court discussed the Forum Selection Clause contained in the agreements dated 12th July, 2011 and 18th October, 2012, which specified the court of jurisdiction and the governing law as German Law. The court emphasized the binding nature of the Forum Selection Clause and its significance in determining the appropriate forum for adjudication of disputes. The court also highlighted the principle that when a contract is governed by the law of a particular country, the courts of such country are more experienced in interpreting the laws and are therefore a more convenient forum for adjudication. The court ultimately allowed the application for rejection of the plaint based on the Forum Selection Clause, dismissing the suit and directing the plaintiff to initiate litigation at the registered place of business of the defendant in Germany.

Fact of the Case:

The plaintiff filed a suit challenging the termination of two agreements and claimed adjudication of its rights under the agreements. The defendants filed an application for rejection of the plaint based on the Forum Selection Clause and non-disclosure of cause of action against the defendant No.2. The plaintiff also filed an application for amendment of the plaint to create a cause of action against the defendant No.2 within the jurisdiction of the court.

Finding of the Court:

The court found that the Forum Selection Clause in the agreements specified the court of jurisdiction and the governing law as German Law, and emphasized the binding nature of the clause. The court allowed the application for rejection of the plaint based on the Forum Selection Clause, dismissing the suit and directing the plaintiff to initiate litigation at the registered place of business of the defendant in Germany.

Issues: The issues included the enforceability of the Forum Selection Clause, the significance of the governing law in determining the appropriate forum for adjudication, and the impleading of the defendant No.2 to create a jurisdiction for the court.

Ratio Decidendi: The court's decision was influenced by the binding nature of the Forum Selection Clause, the principle that the courts of the country governing the contract are a more convenient forum for adjudication, and the impleading of the defendant No.2 to create a jurisdiction for the court.

Final Decision: The court allowed the application for rejection of the plaint based on the Forum Selection Clause, dismissing the suit and directing the plaintiff to initiate litigation at the registered place of business of the defendant in Germany.

JUDGMENT :

1. Both the applications are taken up together and disposed of by this common judgment.

2. The defendants have filed an application being G.A. No.1201 of 2017 (hereinafter referred to as the “first petition”) for rejection of plaint on the ground of Forum Selection Clause and non-disclosure of cause of action against the defendant No.2.

3. During the pendency of the said application, the plaintiff has filed an application for amendment of the plaint being G.A. No.1318 of 2017 (hereinafter referred to as the “second petition”).

4. Shorn of unnecessary details, the facts are summarized below.

5. The plaintiff filed a suit, inter alia, challenging the termination of two agreements dated 12th July, 2011 and 18th October, 2012, that is, maintenance contract and job to job contract respectively.

6. The plaintiff in the suit is claiming adjudication of its rights under the said two agreements. The said suit was filed upon obtaining leave under Clause 12 of the Letters Patent.

7. The first application for revocation of leave and dismissal of the suit of two grounds, namely:-

“(i) Forum Selection Clause and law governing the agreement.

(ii) the plaint does not disclose any cause of action.

8. It is undisputed fact that both the agreements contain Forum Selection Clause that is Clause 10.2 in the agreement dated 12th July, 2011 which reads:-

“Clause 10.2.Court of jurisdiction is the court first instance competent for the registered place of business of DILO. In case of litigation regarding rights and obligations of this contract only German law is applicable.”

9. and Clause 12 in the agreement dated 18th October, 2012 which reads:-

“Clause12. Court of jurisdiction is the court first instance competent for the registered place of business of DILO. In case of litigation about rights and obligations of this contract only the German law is applied.”

10. In the plaint, the defendant No.1 is described as a company incorporated and registered under the relevant laws of Germany, having its registered office at “36, D-87727, Babenhausen, Germany” outside the aforesaid jurisdiction.

11. The said paragraph was affirmed and verified as true to knowledge.

12. The plaintiff alleged that the said two agreements are not terminable in nature, in any event, the defendant No.1 cannot arbitrarily and unilaterally terminate the said agreements.

13. In the plaint, it is alleged that on 13th January, 2017, the plaintiff has found on the website of the defendant No.1 the name of the defendant No.2 indicated as strategic partners of the defendant No.1 instead of the plaintiff. The defendant No.2 is well-aware that the plaintiff is the sole and exclusive business partner of the defendant No.1 for the said territory. In spite thereof, the defendant No.2 is interfering in the execution of the contract between the plaintiff and the defendant No.1. It is alleged that the defendant No.2 has prevented the plaintiff from performing its contract dated 18th October, 2012 and 12th July, 2011 and such interference is deliberate. The interference is direct and such interference by the defendant No.2 has led to the illegal termination of the contract between the plaintiff and the defendant No.1. The defendant No.2 has procured a breach of contract.

14. In paragraph 38 of the plaint, the plaintiff has pleaded fraud by the defendants on the plaintiff.

15. In the second application being G.A. No.1318 of 2017, the plaintiff has proposed amendment of paragraphs 36, 38(d), 43, 44 and 51. The proposed amendment was shown in red ink. The said paragraphs with the proposed amendment indicated in bold letters read:-

“36. However, on 13th January, 2017, the plaintiff has found on the website of the defendant No.1 the name of the defendant No.2 indicated as strategic partners of the defendant No.1 instead of the plaintiff. The plaintiff saw the name of the defendant no.2 on the website of the defendant no.1, at its office at White House, 119. Park Street, Kolkata–700 016, within the aforesaid jur






















































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