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IN THE HIGH COURT OF DELHI AT NEW DELHI
Yogesh Khanna, J.
M S Talwar Auto Garages Private Limited – Appellant
Versus
M S Ve Commercial Vehicles Limited – Respondent
Arb.P. 1204 of 2022, I.A.Nos.17506 of 2022, 7036 of 2023 & O.M.P.(I) (COMM.) 84 of 2022, I.A. 4147 of 2022 I.A. 7037 of 2023
Decided On : 14-08-2023
ARBITRATION - Jurisdiction of Court - Arbitration and Conciliation Act - Section 11, 32 - The court discussed the arbitration clause, jurisdiction, and seat of arbitration, and referred to various legal provisions and interpretations from previous cases to determine the jurisdiction of the court and the appointment of an arbitrator.
Fact of the Case:
The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act for the appointment of an arbitrator to adjudicate disputes between the parties. The disputes arose from a Dealership Agreement with an arbitration clause specifying the seat of arbitration at Delhi.
Finding of the Court:
The court found that the seat of arbitration at Delhi conferred jurisdiction on the court to entertain the petition and appoint an arbitrator. It also held that only disputes arising from the Balanagar agreement dated 01.04.2017 needed to be referred to arbitration.
Issues: The issues included the jurisdiction of the court in relation to the seat of arbitration, the interpretation of the arbitration clause, and the disputes to be referred to arbitration.
Ratio Decidendi: The court relied on previous judgments to establish that the designation of the seat of arbitration confers exclusive jurisdiction on the courts at that seat. It also emphasized the importance of the seat of arbitration in determining jurisdiction.
Final Decision: The court appointed an arbitrator to adjudicate the disputes between the parties and left the rights and contentions of the parties open. The proceedings were to be conducted under the Delhi International Arbitration Centre.
JUDGMENT
Yogesh Khanna, J.
1. ARB.P. 1204/2022 is filed by the petitioner under Section 11 of Arbitration and Conciliation Act for appointment of an arbitrator to adjudicate the disputes between the parties. The arbitration clause 32 of the Dealership Agreement dated 29.10.2013, renewed on 01.04.2017 is as under:
"32) DISPUTE RESOLUTION AND JURISDICTION
The parties hereto shall endeavor to settle by mutual conciliation any claim, dispute, or controversy ("Dispute") arising out of or in relation to, this Agreement, including any Dispute with respect to the existence or validity hereof the interpretation hereof the activities performed hereunder, or the breach hereof. Any Dispute which cannot be so resolved through such conciliation within 30 days or such extended period as the parties may agree, shall be finally settled under the provisions of the Indian Arbitration and Conciliation Act, 1996 and Rules made thereunder and any statutory amendments/modifications thereof in Delhi. The seat of arbitration shall always be at Delhi. The Courts of Indore shall have exclusive jurisdiction in all matters arising under this Agreement."
2. Reference is also made to other clauses of the agreement viz. 4 and 26, which read as under:
"4) TERM OF THE AGREEMENT
a) This Agreement shall Continue in force up to a period of 3 years commencing on 01st April 2017 and shall thereafter be renewed for successive periods of 3 years as may be mutually agreed between VECVL and the Dealer unless terminated earlier by VECVL as described in the clause 26 hereof.
b) In case the Dealer is not interested in renewal of this agreement, the Dealer shall intimate at least 90 days before the expiry of the term of this agreement or extended term thereof in writing of VECVL.
26) TERMINATION
a) VECVL reserves the right to determine and/or treat this agreement at an end forthwith on account of any breach of any of the terms and conditions contained herein on the part of the Dealer without prejudice to any other right or rights which may have accrued to it. Any clues outstanding against the dealer for one month or more shall be deemed to be a Dealers breach of this agreement within the meaning of this clause.
b) VECVL may also terminate this agreement forthwith in the event of VECVL doubting the probity of conduct of the Dealer or on VECVL believing that any acts of the Dealer are likely to prejudice the VECVL 's interests, bring disrepute, cause loss of goodwill to VECVL or result in financial loss to VECVL.
c) It is agreed by the parties that in case of dissolution of or change in structure/arrangement/agreement, in the Dealer's Partnership Firm, in whatever manner, without prior intimation to and written consent of VECVL , VECVL shall hold absolute right to terminate this Dealership Agreement forthwith.
d) It is agreed that the Dealer will not indulge m any such transaction/obligation/agreement /collaboration/amalgamation or any other such business arrangement with any other organization(s); which directly/indirectly affects VECVL's business interests, without prior written consent of VECVL. VECVL shall hold rights to forthwith terminate the dealership on occurrence of any such event
e) Notwithstanding anything contained in Clause 26 (a) & (b) hereof, this agreement shall be liable to be determined without assigning any reason upon three months' notice in writing from either side.
f) In case of the termination of the agreement by VECVL under clause 26 (a) and/or (b) VECVL shall be entitled to forfeit the security deposit amount given by the Dealer as per clause 6 of this agreement including interest, if any, accrued thereon till date."
3. It is the submission of the learned senior counsel for the petitioner since the arbitration clause provides for the seat of arbitration at Delhi, hence this Court shall have jurisdiction to entertain the petition under Section 11 of Arbitration and Conciliation Act and to appoint an arbitrator. It is argued where there exists a seat of arbit
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 ....
The jurisdictional seat of arbitration was Panchkula in Haryana, and not Delhi, as the arbitrator had fixed the jurisdictional seat under Section 20(2) of the Act before any party had moved the court....
The main legal point established in the judgment is that an exclusive jurisdiction clause in an agreement determines the courts with jurisdiction to entertain disputes and grant interim protection.
The designation of a jurisdictional 'seat' in arbitration agreements is critical; parties must adhere to contractual terms for determining jurisdiction, confirming that Mumbai was the agreed 'seat' o....
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.
Parties to an arbitration agreement may confer exclusive jurisdiction to a specific court, making that court sole authority for dispute resolution, irrespective of other claims.
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