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2020 Supreme(Del) 1175
IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Cars24 Services Pvt Ltd - Appellant
Versus
Cyber Approach Workspace Llp - Respondent
Arbitration Petition No. 328 of 2020
Decided On : 17-11-2020
Yash Srivastava, Advocate, Praveen Kumar Sharma, Advocate, Sahil Nagpal, Advocate
The main legal point established in the judgment is the need to adhere to the exclusive jurisdiction clause in the lease deed and the court's inability to exercise jurisdiction contrary to the contractual stipulations.
Headnote:
Jurisdiction - Seat of Arbitration - Exclusive Jurisdiction Clause - Arbitration and Conciliation Act, 1996 - [JURISDICTION] - [LEASE DISPUTE] - [Section 11(5) of the Arbitration and Conciliation Act, 1996] - The judgment discusses the conflict between the exclusive jurisdiction clause and the seat of arbitration clause in the lease deed, and the court's decision to dismiss the petition due to lack of territorial jurisdiction. The court emphasizes the need to adhere to the exclusive jurisdiction clause and concludes that the petition is incompetent due to lack of territorial jurisdiction.
Fact of the Case:
The petitioner and respondent were in a lease dispute over the termination of a lease deed due to the COVID-2019 pandemic. The petitioner approached the court under Section 11(5) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator.
Finding of the Court:
The court found that the exclusive jurisdiction clause in the lease deed specifically conferred Section 11 jurisdiction on the High Court of Punjab and Haryana. The court dismissed the petition due to lack of territorial jurisdiction, without entering into the merits of the relief sought.
Issues: The main issue was the conflict between the exclusive jurisdiction clause and the seat of arbitration clause in the lease deed, and whether the court had territorial jurisdiction to entertain the petition under Section 11(5) of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court emphasized the need to adhere to the exclusive jurisdiction clause and concluded that the petition was incompetent due to lack of territorial jurisdiction. The court also highlighted the principle that a court cannot re-write a contract between the parties and must respect the contractual stipulations.
Final Decision: The court dismissed the petition due to lack of territorial jurisdiction, without entering into the merits of the relief sought. The court clarified that the dismissal did not prevent the petitioner from moving the appropriate court for the appointment of an arbitrator.
JUDGMENT
C. Hari Shankar, J. - I am faced, here, with a peculiar and, quite frankly, somewhat unenviable, situation in which, though learned counsel for both the parties submit that this Court has jurisdiction to entertain the present petition, I am unable to convince myself to agree.
2. In view of the limited controversy involved, it is not necessary to dwell deep into the disputes between the petitioner and the respondent. A brief recital would suffice.
3. The respondent has its registered office in Gurgaon, Haryana. On 27th December, 2018, a lease deed was executed, whereby the respondent leased the premises, admeasuring 10,000 square feet, for running an office. Interest free refundable security deposit of Rs. 52,80,000/- was paid, by the petitioner, to the respondent, and the monthly lease rental, as per the lease deed, was Rs. 7,30,000/ -. Additionally, the petitioner was required to pay maintenance charges of Rs. 1,50,000/- apart from electricity and water charges.
4. It is asserted, in the petition, that the petitioner was meeting all these liabilities, without default.
5. Owing to the intervention of the COVID-2019 pandemic, the petitioner claims that it had to suspend its operations, completely, with effect from 23rd March, 2020. This, according to the petitioner, constituted force majeure, for which there was a separate dispensation in the lease deed.
6. The petitioner, on 23rd March, 2020, wrote to the respondent, informing the respondent that it was not in a position to continue operating from the premises and requesting the respondent, therefore, to switch off the power supply.
7. Vide notice dated 23rd May, 2020, addressed to the respondent, the petitioner purported to terminate the lease deed, invoking Clause 13.2 thereof (which dealt with force majeure). Correspondingly, the petitioner requested the respondent to refund the interest free refundable security deposit of Rs. 52,80,000/- paid by it
8. The respondent replied, on 27th May, 2020, denying any liability towards the petitioner.
9. A dispute having thus arisen between the petitioner and the respondent, the petitioner issued a separate notice, dated 8th June, 2020, invoking arbitration, for the resolution of the dispute, in accordance with Clauses 25.2 to 25.4 of the lease deed, which reads thus:
"25.2 That if any disputes controversies or difference arise between the Parties, regarding the construction or interpretation of any of the terms and conditions herein contained or touching these presents or determination of any liability or breach thereof (Dispute), the Parties shall try and resolve the same amicably, failing which the Disputes shall be referred to Arbitration.
25.3 That if the Parties fail to resolve such dispute then, either Party may serve a notice to the other Party of its intention to commence arbitration. All such disputes shall then be finally settled through arbitration in accordance with the provisions of this Clause.
25.4 Parties have agreed that all the Disputes arising out of this Deed shall be referred to a Sole Arbitrator who shall be mutually appointed by the parties, failing which either Party may approach a court of competent jurisdiction at Haryana for appointment of the Sole Arbitrator in terms of the Arbitration and Conciliation Act, 1996 (Act) as amended from time to time. The arbitration proceedings shall be conducted in terms of the Act. The award of the Sole Arbitrator shall be reasoned and in written, which shall be final and binding upon the Parties. It has been further agreed between the Parties that Arbitration proceedings shall be conducted in English Language and the seat of Arbitration will be at New Delhi, India."
(Emphasis supplied)
The communication also suggested the name of an advocate, as the sole arbitrator to adjudicate on the aforesaid disputes.
10. Vide response dated 27th June, 2020, the respondent again denied any liability towards the petitioner and also rejected the suggestion, of the petitioner, to a
