2018 Supreme(Ker) 207
IN THE HIGH COURT OF KERALA AT ERNAKULAM
C.K.ABDUL REHIM, SHIRCY V, JJ.
M/S. Britannia Industries Limited – Appellant
Vs.
R. Easwaran S/o. Ramaswamy, Proprietor, Adithya Enterprises – Respondents
Arb. Appeal Nos. 56, 63, 64 & 65 OF 2017
Decided On : 13-03-2018
For the Appellant : Sri. P.K. Suresh Kumar (Sr.), Sri. Madhu Radhakrishnan, Sri. Nelson Joseph
For the Respondent: Sri. V. Venugopalan Nair
Headnote:
The Arbitration and Conciliation Act- Section 9, Section 9 (1)-The seat of arbitration has not yet been designated-As long as the seat of arbitration remaining not designated, in the matter of approaching courts for any remedy, including remedy provided under Section 9 of the Act, the clause in the agreement will operate, as held in the decisions of the hon'ble Supreme Court mentioned above- When the parties have chosen the courts at a particular place having jurisdiction to deal with the matters involved in the contract and had specified such jurisdiction in the contract, it has to be inferred that the parties have intended to exclude all other courts.
Statement of facts:
The appellant company is challenging the orders passed by the District Court, Manjeri -The original petitions were instituted before the District Court by various petitioners, who are 'authorised wholesalers' of the appellant company, by invoking Section 9 (1) of the Arbitration and Conciliation Act- The relief sought for in the original petitions were to issue mandatory injunction commanding the appellant to continue with 'distributorship' of the petitioners in accordance with the terms of the agreement entered between the parties and to supply the products of the company to them on the basis of the orders placed; and also to restrain the appellants from appointing any new 'distributors' in the place of the petitioners in any part of operational area allotted to each of them, until the dispute is settled through arbitration. The court below through the orders impugned had allowed the above said prayer sought for and restrained the appellants from discontinuing the 'distributorship' of the respondents/petitioners and from discontinuing supply of the products to them and also from appointing any new distributors in the place of the petitioners. It is aggrieved by the said order the above appeals are filed.
Finding of the court:
The specification of courts at Bangalore contained in Clause 16 of the agreement will exclude the jurisdiction of courts at any other places, with respect to any matters arising out of the contract, including an original petition filed under Section 9 of the Act. But the question of jurisdiction is basically a question which need to be decided, at the first instance, by the court where the petition is instituted. Therefore, under normal circumstances, the question need to be relegated for adjudication by the District Court itself-The appeals need to be allowed and the original petitions filed before the court below need to be declared as not maintainable before the court below.
Result: Appeals allowed
C.K. Abdul Rehim, J.
Since the appellant is common in all these cases and since the orders impugned are passed by the same District Court and since the nature of the orders impugned in all these appeals are identical, we have considered these appeals together and disposed of through this common judgment.
2. The appellant company is challenging the orders passed by the District Court, Manjeri in OP (Arb) Nos.141/2017, 150/2017, 151/2017 & 149/2017, respectively in the above appeals. The original petitions were instituted before the District Court by various petitioners, who are 'authorised wholesalers' of the appellant company, by invoking Section 9 (1) of the Arbitration and Conciliation Act (herein after referred to as 'the Act' for short). The relief sought for in the original petitions were to issue mandatory injunction commanding the appellant to continue with 'distributorship' of the petitioners in accordance with the terms of the agreement entered between the parties and to supply the products of the company to them on the basis of the orders placed; and also to restrain the appellants from appointing any new 'distributors' in the place of the petitioners in any part of operational area allotted to each of them, until the dispute is settled through arbitration. The court below through the orders impugned had allowed the above said prayer sought for and restrained the appellants from discontinuing the 'distributorship' of the respondents/petitioners and from discontinuing supply of the products to them and also from appointing any new distributors in the place of the petitioners. It is aggrieved by the said order the above appeals are filed.
3. Heard; Senior counsel Adv. P.K. Suresh Kumar who appeared for the appellant and Sri. V. Venugopalan Nair, counsel appearing for the respondents/petitioners.
4. On behalf of the appellant, a preliminary question of jurisdiction of the District Court was raised. It is contended that the parties to the agreement had limited the jurisdiction to the courts at Bangalore, with respect to all matters arising out of the agreement. Hence it is contended that the courts at Bangalore alone has got jurisdiction to entertain any petition under Section 9 (1) of the Act. In support of the above contention, learned Senior Counsel had placed reliance on the decision of the hon'ble Supreme Court in Swastik Gases (P) Ltd. V. Indian Oil Corporation Ltd. ((2013) 9 SCC 32). It is held by the apex court that, by making a provision that the agreement is subject to jurisdiction of courts at Kolkata, the parties have impliedly excluded jurisdiction of other courts. Where the contract specifies jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an interference may be drawn that the parties intended to exclude all other courts. A clause like this is not hit by Section 32 of the Contract Act at all. Such clause is neither forbidden by law nor is it against the public policy. It does not offend Section 28 of the Contract Act in any manner, was the findings.
5. In a more recent decision of the hon'ble Supreme Court in State of West Bengal V. Associated Contractors ((2015) 1 SCC 32), after referring to various earlier decisions, it is held that, where the agreement between the parties restricted jurisdiction to only one particular court, that court alone would have jurisdiction as neither Section 31 (4) nor Section 42 of the Act contains a non obstante clause wiping out a contrary agreement between the parties. On the basis of the above decision, it is further held that, an application preferred to courts outside the exclusive court agreed to by the parties, would also be without jurisdiction.
6. The dictum contained in Swastik Gases case (supra) and Associated Contractors case (supra) were taken into consideration by the hon'ble Supreme Court while deciding an issue relating to jurisdiction under Section 9 of the Act, in B.E. Simoese Von S