Point of Law: Arbitration - Where there is a seat designated in the agreement, all applications under Part I of the ‘Act’ be made only in the Court where it is located; but that where no such seat is designated, then an application under Section 9 of the Act can be preferred before any court in which part of the cause of action arises.

ORDER :

This Arbitration Request, filed by the petitioner, does not have many factual disputations.

2. It is admitted by both sides that Annexure P1 Agreement was entered into between them and that Clause 60 thereof stipulates that both sides must subject themselves to Arbitration, if any disputes are to arise from its terms or relating thereto.

3. It is also on record – as is affirmed by both sides – that an Arbitrator was nominated by the 1st respondent and that the petitioner was directed to appear before him and raise his claims.

4. The petitioner, however, contends that the afore nomination by the 1st respondent is illegal and incompetent under the purlieus of Section 12 (5) of the Arbitration Conciliation Act, 1996, (hereinafter referred to “Act” for short) and under the declaratory umbra of the judgments of the Hon’ble Supreme Court in Perkins Eastman Architects DPC and another v. HSCC (India) Ltd. [2019 SCC Online 1517], which has been followed by this Court in Tulsi Developers India Pvt. Ltd. v. Dr. Appu Benny Thomas (2021 (5) KLT 339); and thus prays that this Court appoint an independent Arbitrator.

5. Au contraire, the respondent maintains that the nomination made by them to be valid and opposes this Arbitration Request, arguing it to be not maintainable for the adscititious reason that Clause 60 of Annexure P1 Agreement specifically warrants the seat of arbitration to be at Mumbai, thus this Court being jurisdictionally incompetent to consider it.

6. It is thus perspicuous that the twin points of 1st controversy between the parties are as to whether the respondent can nominate an Arbitrator; and whether the seat of Arbitration has to be in Mumbai, as postulated by Clause 60 of Annexure P1 Agreement.

7. I have heard Sri.P.Vijayakumar, learned counsel appearing for the petitioner; Smt.Pooja Menon, learned counsel appearing for respondents 1 and 2 and Sri.Sudhinkumar, learned counsel appearing for the 4th respondent.

8. Even though notice from this Court has been validly served on the 3rd respondent, he has chosen not to be present in person or to be represented through counsel; but am of the view that it will not impede this Court from disposing of this matter in his absence because he is the Arbitrator nominated by the 1st respondent and whose competence is now called into question in this case.

9. Sri.P.Vijayakumar took me extensively through the various provisions of Annexure P1 Agreement to argue that some of its terms are oppressive to his client and further that the disputes arising from it can only be resolved through the process of Arbitration, for which, the Seat will have to be construed as being in Kerala, for the singular reason that the 1st respondent has chosen to file an application for interim measures, under Section 9 of the “Act”, before the Sub Court, Kollam.

10. Sri.P.Vijayakumar edificed his arguments on Section 42 of the Act, to contend that when any application is made by any party under the First Part thereof in a Court, then that Court alone will have jurisdiction over the Arbitral proceedings and all the subsequent applications arising out of the Agreement. He further pointed out that, going by Section 42 of the “Act”, Arbitral proceedings shall be made in that court and no other Court. He then took me through the various materials available on record, to assert that even though Clause 60 of Annexure P1 Agreement mandates the seat of Arbitration to be at Mumbai, the 1st respondent, admittedly, chose to move a Sub Court in Kerala, invoking jurisdiction under Section 9 of the “Act”; which then, according to him, would render the position inescapable that only this Court would obtain jurisdiction under Section 11 of the “Act” to appoint a Sole Arbitrator. He relied heavily on the judgment of the Hon’ble Supreme Court in BGS SGS SOMAJV v. NHPC [(2020) 4 SC 234] in substantiation; and then went on to the primary limb of his argument that the nomination of the 3rd respondent as an Arbitrator by the 1st res