K. HARILAL, J.

1. (i) Is the seat of arbitration or the place where arbitration proceedings were conducted and concluded a determinate factor, in conferring territorial jurisdiction, to file an application under Section 34 of the Arbitration and Conciliation Act, to set aside an Award?

(ii) Where the parties to an agreement have chosen to confer exclusive territorial jurisdiction to a particular place or court, among two or more courts having concurrent jurisdiction, in case of dispute, will it bind the parties and oust the other courts having concurrent jurisdiction.

These are the questions that arise for our consideration in this First Appeal from Order.

2. The appellants had preferred O.P.(Arb.)No.12/2011 before the District Court, Ernakulam under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitration award.

3. The respondent filed an objection in the above O.P. (Arb.), challenging jurisdiction of the District Court, Ernakulam, contending that the parties had agreed, as per Clause 19 of the Franchisee Agreement, that the court at Thiruvananthapuram alone has jurisdiction to decide any dispute between the parties arising out of or consequent on the agreement.

4. The appellants contended that the arbitration proceedings were conducted and concluded in Ernakulam and the seat of arbitration was at Ernakulam. The subject matter is situated at Ernakulam and thereby the alleged breach of contract had arisen fully in Ernakulam and the District Court at Ernakulam alone has jurisdiction to determine the sustainability of the award.

5. The court below accepted the objection raised by the respondent and returned the Original Petition to the appellants for presentation before the District Court, Thiruvananthapuram, by the impugned order. The legality and correctness of the reasonings whereby the District Court, Ernakulam, returned the Original Petition are impugned in this First Appeal from Order.

6. The learned counsel appearing for the appellants and the learned counsel appearing for the respondent advanced arguments in support of their respective contentions. Shri. P.G. Jayashankar, the learned counsel for the appellants cited the decision reported in Dr. Joy P. Chungath v. M/s. Lawkin Ltd. [2012 (1) KHC 565]; The Electrical Manufacturing Co. Ltd., Calcutta and Another v. The Crompton Engineering Co., (Madras) Ltd., Madras [AIR 1974 Mad 261]; Indian Oxygen Ltd. v. National Oxygen Ltd and Another [(1990)1 CALLT 275] and A.B.C. Laminart Pvt. Ltd. and Another v. A.P. Agencies, Salem [1989 KHC 842].

7. Per contra, Shri. Saji, the learned counsel appearing for the respondent cited the decision in Jatinder Nath v. Chopra Land Developers (P) Ltd. and Another [(2007) 11 SCC 453] and Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited [(2009) 3 SCC 107].

8. It stands undisputed that as per Clause 19 of the Franchisee Agreement, the parties agreed that the court at Thiruvananthapuram alone shall have jurisdiction to decide the dispute, if any arises, between the parties. According to the respondent, this clause is binding on the parties and it excludes jurisdiction of other courts having concurrent jurisdiction. But, the case of the appellants is that the seat of arbitration was at Ernakulam and the arbitration proceedings were conducted and concluded in Ernakulam, where the subject matter is situated and the alleged breach of contract has occurred. Thus, the cause of action had arisen fully in Ernakulam. No court, other than the District Court at Ernakulam, has jurisdiction to entertain the challenge against the award.

9. According to Section 2(e) of the Arbitration and Conciliation Act, 'court' means the Principal Civil Court of original jurisdiction in a district having jurisdiction to decide the question forming subject matter of arbitration, if the same had been the subject matter of a suit. Therefore, the basis on which territorial jurisdiction is conferred, to the court under the Civil Pr