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IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Manmohan Kapani – Appellant
Versus
Kapani Resorts Pvt. Ltd. & Ors. – Respondents
O.M.P.(I) 2 of 2023 & I.A. 4173 of 2023
Decided On : 03-03-2023
Arbitration - Jurisdiction - Acts and Sections Referred: Arbitration and Conciliation Act, 1996, Section 9 - Summary: The court discussed the jurisdictional issue in relation to the seat of arbitration and the exclusive jurisdiction of the court at the seat of arbitration. The court relied on various judgments to establish that the court at the seat of arbitration has exclusive jurisdiction over all applications under Part I of the Act, including those filed under Section 9. The court dismissed the petition for want of territorial jurisdiction, emphasizing that the parties had agreed to vest exclusive jurisdiction in the court at the seat of arbitration.
Fact of the Case:
The petition was filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking various reliefs in connection with disputes arising from a Share Subscription Agreement cum Shareholders Agreement. The jurisdictional issue arose regarding the exclusive jurisdiction of the court at the seat of arbitration.
Finding of the Court:
The court found that the seat of arbitration had been fixed, and as per the Act, the court at the seat of arbitration has exclusive jurisdiction over all applications under Part I of the Act, including those filed under Section 9. Therefore, the court dismissed the petition for want of territorial jurisdiction.
Issues: The main issue was the jurisdictional conflict between the court at the seat of arbitration and the court where the parties had conferred exclusive jurisdiction for all matters arising pursuant to the Agreement.
Ratio Decidendi: The court's decision was based on the interpretation of the Act and various judgments, establishing that the court at the seat of arbitration has exclusive jurisdiction over all applications under Part I of the Act, including those filed under Section 9.
Final Decision: The court dismissed the petition for want of territorial jurisdiction, emphasizing that the parties had agreed to vest exclusive jurisdiction in the court at the seat of arbitration.
JUDGMENT
Navin Chawla, J. (Oral)--This petition has been filed under Section 9 of the Arbitration and Conciliation Act,1996 (hereinafter referred to as the `Act') inter-alia praying for the following reliefs:
"a) Grant ex-parte Ad-interim orders and/or direction in favour of the Petitioner and against the Respondent, from alienating, creating third party rights, discharging, misappropriating the properties of the Respondent Company;
b) Grant ex-parte Ad-interim orders and/or direction in favour of the Petitioner and against the Respondent, from alienating, creating third party rights, discharging, misappropriating the Greater Kailash Property belonging to the Respondent No.2 and Respondent No. 3;
c) Grant ex-parte Ad-interim orders and/or direction in favour of the Petitioner and against the Respondent, attaching the assets and bank accounts of the Respondent No.2 and Respondent No. 3 to the extent of 7.5 crores;
d) Grant ex-parte Ad-interim orders and/or direction in favour of the Respondent No.2 and Respondent No. 3, calling upon them to deposit Rs.7,50,00,000 before the Registrar of the Delhi High Court."
2. The disputes between the parties have arisen out of the "Restated Share Subscription Agreement cum Shareholders. Agreement" dated 11.02.2022 executed between the parties. The Arbitration Agreement between the parties is contained in Clause 17 of the said Agreement, and is reproduced herein below:
"17. DISPUTE RESOLUTION
If any dispute or difference arises between any of the Parties hereto during the subsistence of this Agreement or thereafter, in connection with the validity, interpretation, implementation or alleged material breach of any provision of this Agreement or regarding any question, including the question as to whether the termination of this Agreement by any Party hereto has been legitimate, the Parties hereto shall endeavor to settle such dispute amicably. The attempt to bring about an amicable settlement is considered to have failed as soon as one of the Parties gives 15 (Fifteen) days' notice thereof to the other Party in writing.
17.1 All disputes that have not been satisfactorily resolved under Clause 17.1 shall be referred to arbitration and shall be settled in accordance with the Rules of the Mumbai Centre for International Arbitration (MCIA Rules), as amended from time to time. This Agreement and the rights and obligations of the Parties contained in this Agreement shall remain in full force and effect pending issuance of the award in such arbitration proceedings, which award, if appropriate, shall determine whether and when any termination of this Agreement shall become effective.
17.2 The language of the arbitration shall be English and all documents submitted (including those submitted as filings, evidence or exhibits) shall be certified English translations if in a language other than English. The seat and venue of arbitration proceedings and the seat of the arbitration shall be Mumbai.
17.3 The arbitration shall be conducted by a tribunal of 3 (Three) arbitrators, consisting of 1 (One) arbitrator nominated by each Party to the dispute and a 3rd (Third) arbitrator, who shall be the chairman of the tribunal and shall be nominated by the 2 (Two) arbitrators so appointed by the Parties to the dispute.
17.4 The arbitrator(s) shall make an award in writing. The award of the arbitrator(s) shall be final and conclusive and binding upon the Parties and non-appealable to the extent permitted by Applicable Law.
17.5 The Parties further agree that the arbitrator shall also have the power to decide on the costs and reasonable expenses (including reasonable fees of counsel) incurred in the arbitration and award interest up to the date of the payment of the award.
17.6 The award of the arbitrator(s) shall be capable of being entered in judgment in any court of competent jurisdiction.
17.7 The Parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of it (includ
The main legal point established in the judgment is the significance of the seat of arbitration in determining the territorial jurisdiction under the Arbitration and Conciliation Act.
Designation of the seat of arbitration must be clearly expressed; conflicting jurisdiction clauses require a harmonious construction favoring the overarching agreement.
The jurisdiction for appointing an arbitrator lies with the court where the principal agreement was executed, as per Section 11(6), despite a venue specified in an ancillary agreement.
The seat of arbitration clause, fixing the seat of arbitration at New Delhi, resulted in courts at New Delhi being exclusively competent to entertain petitions under the 1996 Act, in exercise of its ....
The main legal point established in the judgment is that the designation of the seat of arbitration confers exclusive jurisdiction on the courts at that seat, influencing the court's decision on juri....
Point of law: Where any disputes arise between parties in respect of or in connection with the agreement then parties shall first endeavour to conciliate the disputes failing which the same shall be ....
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