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2022 Supreme(Cal) 1044

IN THE HIGH COURT OF CALCUTTA
Ravi Krishan Kapur, J.
Techma Engineering Enterprise Private Limited - Appellant
Versus
Union Of India - Respondent
A.P No. 334 of 2021
Decided On : 11-02-2022

Advocates appeared:
Mr. Sarvapriya Mukherjee Mr. Rudrojit Sarkar, Mr. Asish Choudhury, Mr. Rabindra Kumar Mitra, Mrs. A. Basu, for the Appellant; Mr. Sanajit Kumar Ghosh, Mr. D. Nag, Mr. Raja Ghosh, for the Respondent.

The existence of a jurisdiction clause in an agreement makes the intention of the parties clear, and it is not necessary to read such clauses like a statute.

Headnote:

Jurisdiction - Arbitration and Conciliation Act - Section 9 - Clause 17 of the tender document - [Section 9 of the Arbitration and Conciliation Act, 1996] - [Clause 17 of the tender document] - The court held that the forum selection clause in the tender document conferred exclusive jurisdiction to the Court where the headquarters of the respondent Railway is situated and where the contract had been signed, i.e., the Court at Jaipur. The absence of words like 'alone', 'exclusively' and 'only' in the forum selection clause did not exclude the jurisdiction of the specified Court. The court relied on the decision in M/s. Swastik Gases Pvt. Ltd. vs. Indian Oil Corporation Ltd. (2013) 9 SCC 32 and held that the existence of a jurisdiction clause in an agreement makes the intention of the parties clear, and it is not necessary to read such clauses like a statute.

Fact of the Case:

The petitioner submitted a bid in response to a tender published by the respondent. The respondent issued a termination notice and threatened to recover the security deposit from the dues payable to the petitioner. The petitioner assailed the notice, leading to a dispute over the jurisdiction of the Court to entertain the application.

Finding of the Court:

The Court found that the forum selection clause in the tender document conferred exclusive jurisdiction to the Court at Jaipur. As a result, the Court held that it had no jurisdiction to entertain the application and dismissed it.

Issues: The main issue was whether the Court had jurisdiction to entertain the application under Section 9 of the Arbitration and Conciliation Act.

Ratio Decidendi: The Court's decision was based on the interpretation of the forum selection clause in the tender document and the application of legal principles established in previous judgments, particularly the decision in M/s. Swastik Gases Pvt. Ltd. vs. Indian Oil Corporation Ltd. (2013) 9 SCC 32.

Final Decision: The Court dismissed the application on the ground of jurisdiction, vacated the interim order, and made no order as to costs.

JUDGMENT

Ravi Krishan Kapur, J. - This is an application under Section 9 of the Arbitration and Conciliation Act, 1996 ('the Act').

2. The disputes by and between the parties arise out of a tender published by the respondent. Pursuant to the tender, the petitioner submitted its bid. Thereafter, the respondent issued a purchase order on the petitioner. On 4 August, 2021, the respondent issued a termination notice and threatened the petitioner to recover the security deposit from the dues payable to the petitioner by the Railways or any other Zonal Railways. In this application, the petitioner assails the notice dated 4 August, 2021.

3. A preliminary point has been raised by the respondent that this Court has no jurisdiction to entertain this application.

4. It is submitted on behalf of the respondent that in terms of Clause 17 of Section G of the tender document, and also the letter of acceptance dated 25 January 2021, there is an exclusive jurisdiction clause in the agreement. For the sake of convenience, Clause 17.1 provides as follows:-

    17.1 Court Jurisdiction:

    For any disputes related to contract or inspection/action by RDSO in pursuance of General Guidelines for Vendor Approval, the court jurisdiction would be the HQrs of the Zonal Railway, where the contract agreement has been signed.

    5. It is submitted by the respondent that, since the respondent has its headquarters at Jaipur and the agreement was also signed at Jaipur, the appropriate Court at Jaipur has exclusive jurisdiction to entertain this application.

    6. On behalf of the petitioner it is submitted that, the forum selection clause contained in the tender does not exclude the jurisdiction of this Court. The word 'alone', 'exclusively' and 'only' have not been used in Clause 17.1. In the absence of such words, this Court has jurisdiction to entertain this application. It is further submitted on behalf of the petitioner that an integral part of the cause of action has arisen within the jurisdiction of this Court. The petitioner has its registered office at Kolkata. The petitioner had submitted its bid at Kolkata. The petitioner had received the letter awarding the tender at Kolkata. All communications by and between the parties have also been issued or received by the petitioner from its office at Kolkata. Accordingly, a substantial part of the cause of action has arisen within the jurisdiction of this Court and this Court has jurisdiction to entertain this petition. In support of its contentions, the petitioner has inter-alia relied on the following judgments reported in (2007) 11 SCC 335 [Alchemist Ltd. vs. State Bank of Sikkim], 2003 (2) CHN 502 [Sukanta Mitra vs. Union of India], (2019) SCC OnLine 860 [Apratim Mukherjee vs. State Bank of India @ Para 24-26 and (1989) 2 SCC 163 [ABC Laminart Pvt. Ltd. vs. A.P. Agencies @ Para 3-5, 22].

    7. Upon this application being moved, the petitioner had been granted an order of injunction dated 18th August, 2021.

    8. The limited question which arises for adjudication is whether this Court has jurisdiction to entertain this application or not. A Court exercising jurisdiction under Section 9 of the Act must ensure that it is the 'Court' defined under the Act. It is well settled that where there are two or more competent Courts which can entertain a proceeding, the parties to the proceeding may agree to vest exclusive jurisdiction in one such Court to try the disputes which might arise between them. Such clauses are often referred to as forum selection clauses and are recognized in law, whereby parties agree to a choice of forum in one of the several Courts which has jurisdiction to entertain such disputes. Moreover, where an agreement contains a forum selection clause conferring jurisdiction on a particular Court to decide the matter, the effect of such a clause is to automatically oust the jurisdiction of any other Court which may have jurisdiction in respect of the subject matter of the arbitration proceedings.

    9. From a reading of Cla

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