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2022 Supreme(Del) 849

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
M/s. Sat Kartar Tour N Travels - Appellant
Versus
Oil And Natural Gas Corporation Limited - Respondent
Arb.P. 772 of 2021 and I.A. 11645 of 2021
Decided On : 25-05-2022

Advocates appeared:
Mr. Devesh Saxena, Mr. Ashish Garg and, Mr. Rajeev Garg, Advocates, for the Appellant; Mr. Sandeep Sethi, Sr. Advocate, with, Mr. Varun Mishra, Advocate, for the Respondent.

The designated seat of arbitration is akin to an exclusive jurisdiction clause, and the court's jurisdiction is determined based on the arbitration clause and legal precedents.

Headnote:

Arbitration - Jurisdiction - A&C Act, 1996 - [ARBITRATION] - [JURISDICTION] - [Section 11(6) of the A&C Act, 1996] - The court discussed the arbitration clause, the place of arbitration, and the jurisdiction of the court in entertaining the petition. The court emphasized the importance of the designated seat of arbitration as an exclusive jurisdiction clause and relied on legal precedents to support its decision. The court ultimately held that the petition was not maintainable in the current court and dismissed it.

Fact of the Case:

The petitioner was awarded a contract for hiring services of vehicles by the respondent. The respondent terminated the contract, and the petitioner invoked the arbitration clause under the agreement, challenging the appointment of the sole arbitrator by the respondent.

Finding of the Court:

The court found that the petition was not maintainable in the current court and dismissed it. The court emphasized the importance of the designated seat of arbitration as an exclusive jurisdiction clause.

Issues: The main issue was whether the court had jurisdiction to entertain the petition under Section 11(6) of the A&C Act, 1996.

Ratio Decidendi: The court emphasized that the designated seat of arbitration is akin to an exclusive jurisdiction clause and relied on legal precedents to support its decision. The court held that the petition was not maintainable in the current court and dismissed it.

Final Decision: The court dismissed the petition as not maintainable in the current court.

ORDER

1. The present petition has been filed by the appellant under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'A&C Act, 1996') with the following prayer:

    In view of the above facts and circumstances, it is most respectfully prayed to this Hon'ble Court to:

    A) Allow the present Petition and set aside the arbitrary appointment of the sole arbitrator Sh. ABL Shrivastava by the respondent.

    B) Quash Clause 16 of the GEM General Terms and Conditions of the agreement in light of the judgment of the Hon'ble Supreme Court in the case of Perkins Eastman Architects DPC & And v HSCC Ltd 20 19 SCC Online SC 1517.

    C) Appoint a Sole Arbitrator as per the provisions of Arbitration and Conciliation Act, 1996, to adjudicate the disputes/ difference between the parties;

    D) Pass any other order or relief which the Hon'ble Court may deem fit in the interest of Justice in favour of Petitioner.

    2. The case of the petitioner as noted from the petition and contended by Mr. Ashish Garg is that on November 27, 2020, the petitioner was awarded a contract by the respondent company for hiring services of 24 Nos. of SUV category vehicles by way of GEM contract. According to him, the petitioner's representative moves to Bokaro, Jharkhand, in order to complete all the requisite formalities for mobilisation of light passenger vehicles. The petitioners' vehicles were successfully parked outside the Oil and Natural Gas Corporation Limited (for short, 'ONGC') premises for providing the services to the respondent. The petitioner found that there is an ongoing protest outside the gate of ONGC which resulted in being denied entry of the vehicles into the ONGC premises.

    3. On February 15, 2021, the respondent terminated the contract by way of a notice. The petitioner made a detailed reply to the said notice denying the claim of the respondent.

    4. It is his submission that, on May 12, 2021, the petitioner got issued a legal notice invoking the arbitration clause under the agreement calling upon the respondent to appoint an Arbitrator within a period of thirty days. According to him the respondent i.e., the primary buyer ONGC, New Delhi duly appointed a sole arbitrator Shri ABL Shrivastava unilaterally without taking any prior consent from the Petitioner.

    5. He submits that the appointment of the learned Arbitrator unilaterally by the respondent is illegal and contrary to the settled law of the Supreme Court as held in Perkins Eastman Architects DPC & And v. HSCC Ltd., 2019 SCC Online SC 1517. He states that this Court needs to appoint a Sole Arbitrator as per the provisions of the A&C Act, 1996 to adjudicate the disputes/differences between the parties.

    6. Mr. Garg has taken me through the various documents in support of his contention for the appointment of an Arbitrator.

    7. Mr. Sandeep Sethi, learned Senior Counsel appearing for the respondent has taken an objection with regard to the maintainability of the petition before this Court on the ground that in terms of the contract, the seat of Arbitration is at the place from where the contract has been placed by the buyer or at the place of the primary buyer as decided by the primary buyer, the concerned Court shall be the High Court within whose jurisdiction Bokaro falls which can entertain a petition of this nature and not this Court. Mr. Sethi in this regard has drawn my attention to page 4 to contend that the buyer's office is in Bokaro, Jharkhand, and also the contract was placed from Bokaro, Jharkhand. He has also drawn my attention to page 46, Clause 17 (iii), which also contemplates that it is the place from where the contract has been made shall alone have jurisdiction to decide any dispute/differences in respect of the contract. He by drawing my attention to page 59 of the documents would submit that even the acceptance of the contract was from Bokaro, Jharkhand. The termination was also effected by the letter dated February 15, 2021, issued from Bokaro, Jharkhand. He also st

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