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2018 Supreme(Mad) 4286

IN THE HIGH COURT OF MADRAS
INDIRA BANERJEE, ABDUL QUDDHOSE, JJ.
NRP Projects Private Limited - Appellant
Versus
Bharat Petroleum Corporation Limited - Respondent
Original Side Appeal No. 109 of 2018
Decided On : 18-04-2018

Advocates Appeared:
Menon, Adv., O.R. Santhanakrishnan, Adv.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 34 - Arbitration agreement - Construction - Appeal is against an order passed by the learned Single Bench dismissing the application filed by the applicant - Held, As observed above, the parties did not agree to the seat and the Arbitrator chose to conduct the entire proceedings in Chennai within the jurisdiction of this Court - In view of Court finding that the Courts in Mumbai lack jurisdiction, Court is constrained to hold that the parties herein could not have by an agreement vested jurisdiction on Courts in Mumbai - Appeal allowed

JUDGMENT :

INDIRA BANERJEE, J.

1. This appeal is against an order dated 09.03.2018 passed by the learned Single Bench dismissing the application filed by the applicant under Section 34 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as 'the said Act' on the ground that the application was not maintainable in this Court. The learned Single Bench, in effect, held that it was Courts in Mumbai alone which had jurisdiction to entertain all applications in relation to the arbitration agreement to the exclusion of all other Courts.

2. In the context of the contentions of the respective parties with regard to the jurisdiction of this Court to entertain the application, reference may be made to certain admitted facts, of which, the learned Single Bench has taken note of.

3. The appellant and the first respondent entered into an agreement on 02.12.2010 to carry out, construct and complete the work at Gooty Depot in the State of Andhra Pradesh. It is not necessary to set forth the details of the work involved in the contract.

4. As noted by the learned Single Bench, there is no dispute on certain basic facts i.e., the agreement was signed within the jurisdiction of this Court, the work was done within the jurisdiction of the State of Andhra Pradesh and the arbitration proceedings were conducted within the jurisdiction of this Court.

5. From the cause title of the application filed before the learned Single Bench as also the appeal filed before us, it is patently clear that the appellant as also the respondents are located in Chennai within the jurisdiction of this Court.

6. It may be pertinent to refer to the arbitration clause in the agreement executed between the first respondent and the appellant herein, which is extracted herein below for convenience:

'h. The parties agree that the courts in the City of Mumbai alone shall have jurisdiction to entertain any application or other proceedings in respect of anything arising under this agreement and any award or awards made by the Sole Arbitrator here under shall be filed in the concerned courts in the city of Mumbai only.'

7. From the above clause, it appears that the parties agreed that Courts in the City of Mumbai alone would have jurisdiction to entertain any application or other proceedings in respect of anything arising under the agreement or any award or awards made by the Sole Arbitrator. An application for setting aside an award could only be filed in the concerned Courts in the City of Mumbai.

8. Save and except the aforesaid clause relating to the jurisdiction of Courts, there is apparently no other provision in the agreement in terms whereof anything specific was required to be done in the City of Mumbai. The agreement was silent with regard to the seat of arbitration and/or venue of arbitration. As observed above and as recorded by the learned Single Bench, the arbitration proceedings actually took place within the jurisdiction of this Court.

9. It is well settled that when two or more Courts have jurisdiction to entertain proceedings, parties may by an agreement agree to the jurisdiction of any one Court to the exclusion of all other Courts. However, parties cannot by consent confer jurisdiction on a Court, which inherently lacks jurisdiction.

10. This Court may usefully refer to certain relevant provisions of the 1996 Act and in particular Section 2(1)(e), which defines 'Court' to mean:

'2(1)(e) 'Court' means-

(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

(ii) in the case of international commercial arbitration, the High Court i
























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