IN THE HIGH COURT OF DELHI AT NEW DELHI
YOGESH KHANNA, J.
CVS Insurance and Investments – Petitioner
Versus
Vipul it Infrasoft Pvt. Ltd. – Respondent
Arb. Pet. No. 9 of 2017
Decided On : 08-12-2017
Arbitration and Conciliation Act, 1996 - Section 11, 20(1), (2), (3) - Seat of arbitration - Exclusive jurisdiction - Registered office of the respondent company at Delhi - None of the cause of action arose within the jurisdiction of this Court - Agreement was executed at NOIDA - It was to be performed at NOIDA - Payments were to be made at NOIDA - Agreement pertains to a sub-lease of unit based in NOIDA - Stamp paper on which the agreement was executed pertains to Utter Pradesh- Petitioner and respondent had agreed to an exclusive jurisdiction of NOIDA - In the light of an exclusive jurisdiction clause in relation to arbitration proceedings excludes the jurisdiction of all other Courts than the Court mentioned therein - Petition is dismissed.
YOGESH KHANNA, J.
1. This application under Section 11 of the Arbitration and Conciliation Act, 1996 raises a question as to where shall be the seat of the arbitration viz. at Delhi or Noida when the agreement between the parties give exclusive jurisdiction to courts at Noida?
2. Suffice is to note the parties entered into an agreement dated 1.1.2013 and had some disputes qua payments. Article 12 of the agreement relates to arbitration. It was invoked by the petitioner and as ignored by the respondent, the petitioner has filed this petition.
3. Article 12 of the Agreement dated 1.1.2013 assume relevance for the controversy raised and it notes:
ARTICLE 12: ARBITRATION AND JURISDICTION
12.1 This Agreement shall be construed, interpreted and applied in accordance with and shall be governed by the laws of India.
12.2 Any dispute arising between the parties in relation to this Agreement and its schedules, annexures (if any) or the Maintenance Agreement or any other congruent Agreement, shall first be tried to be amicably resolved by the parties. Failing amicable resolution within 30 days of the commencement of negotiations, the dispute shall be referred to a Sole Arbitrator as appointed by the Company. The Intending Sub Lessee hereby agrees and confirms that it shall have no objection to such appointment. The Arbitration shall be conducted as per the Arbitration and Conciliation Act, 1996 or its statutory modifications, amendments or re-enactments thereof. The Award of the Arbitrator shall be final and binding upon the parties. The venue of arbitration shall be Noida/New Delhi.
12.3 It is agreed by and between the Parties hereto that the arbitration proceedings and all other matters connected to arbitration and any disputes, suits, complaints, litigation, claim or any other matter arising out of or in relation to this Agreement, shall be subject to the exclusive jurisdiction of Courts at Noida.
4. What Article 12.2 above lays is the venue of arbitration and not the seat of arbitration. Admittedly there cannot be two or more seats of arbitration though the venue of arbitration may depend upon convenience of the parties, which fact is noted in Article 12 above giving exclusive jurisdiction to courts at Noida while keeping Delhi and Noida as venue for arbitration.
5. In Swastik Gases Pvt. Ltd. vs. Indian Oil Corporation Ltd. (2013) 9 SCC 32 it was held where the ouster is included in an agreement between the parties, it convey their clear intention to exclude the jurisdiction of courts other than those mentioned in the concerned clause. Conversely, if the parties had intended that courts where the cause of action or the part thereof had arisen would continue to have jurisdiction over the dispute, the exclusion clause would not have found a place in the agreement between the parties.
6. Further Indus Mobile Distribution Pvt. Ltd. vs. Datawind Innovations Pvt. Ltd. and Others, (2017) 7 SCC 678 highlights there is a difference between venue and the seat of arbitration and merely because the arbitrator chooses to hold the arbitration at a venue different than the seat of the arbitration, it shall not confer territorial jurisdiction on the courts where the venue of the arbitration exists. Para 18 and 19 are relevant:-
“18. The amended Act, does not, however, contain the aforesaid amendments, presumably because the BALCO judgment in no uncertain terms has referred to “place” as “juridical seat” for the purpose of Section 2(2) of the Act. It further made it clear that Section 20(1) and 20(2) where the word “place” is used, refers to “juridical seat” whereas in Section 20 (3), the word “place” is equivalent to “venue.” This being the settled law, it was found unnecessary to expressly incorporate what the Constitution Bench of the Supreme Court has already done by way of construction of the Act.
19. A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the fa
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