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2025 Supreme(Mad) 4627
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
M/s. TSR Films Private Limited, Chennai - Applicant
Versus
M/s. New Pride Multiplex, Maharashtra – Respondent
O.A.No.414 of 2024 and Arb.Appln. No.286 of 2024 and Arb.O.P. (Com.Div.) No.537 of 2024
Decided On : 09-06-2025
For the Applicant : Mr. Dhanaram Ramachandran for M/s. D.R. Law Chambers.
For the Respondent: Ms. S.P. Arthi & Mr. M.S. Niranjhan.
The court ruled that jurisdiction is determined by the seat of arbitration and where the cause of action arose, confirming that the Chennai court lacked territorial authority in an arbitration dispute originally based in Mumbai.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 9 and 11 - Jurisdictional challenge raised regarding the appropriate forum for dispute resolution arising from the arbitration agreement dated 23.08.2020. (Paras 3, 11)
(B) Principles of territorial jurisdiction - Court found it lacked jurisdiction as no part of cause of action arose within its territory, reaffirming that jurisdiction aligns with the signed contract location, emphasizing the importance of the seat of arbitration over the venue. (Paras 10, 16)
(C) Contra proferentem principle applied - Ambiguities in contract language should be interpreted against the drafter. (Paras 19)
Facts of the case:
The applicant sought an interim injunction to restrain the respondent from exhibiting digital content based on a contract executed in Mumbai. The respondent contested the jurisdiction of the Chennai court, asserting all obligations arose in Maharashtra.
Findings of Court:
Court found it lacked territorial jurisdiction to adjudicate these applications due to established facts that all relevant actions occurred in Maharashtra, affirming the jurisdiction of Mumbai courts.
Issues: Whether the Chennai court possesses jurisdiction to decide based on the arbitration agreement's terms and the location of the contract execution.
Ratio Decidendi: The arbitration clause, despite presenting contradictory statements regarding jurisdiction, was interpreted with regard to where the cause of action arose and the surrounding facts aligned with Mumbai's jurisdiction.
Result: Applications dismissed; liberty granted to the applicant to approach appropriate courts in Mumbai.
| Table of Content |
|---|
| 1. interim injunction sought pending arbitration. (Para 1) |
| 2. legal interpretation principles discussed. - What legal principles guide the interpretation of clauses? (Para 2) |
| 3. jurisdiction dispute between courts. - What are the jurisdictional challenges raised by the respondent? (Para 3 , 4 , 5 , 6) |
| 4. jurisdiction must be determined before merits. (Para 7 , 10 , 11) |
| 5. undisputed facts establish jurisdiction. - How does the contract's execution affect jurisdiction? (Para 8 , 12 , 13 , 14) |
| 6. legal principles surrounding jurisdiction invalidity. (Para 15 , 16 , 17 , 18) |
| 7. contra proferentem principle clarifies jurisdiction. - What legal principles guide the interpretation of clauses? (Para 19) |
| 8. court lacks jurisdiction; applications dismissed. - What was the final decision regarding the applications? (Para 20) |
ORDER :
(ABDUL QUDDHOSE, J.)
O.A.No.414 of 2024 has been filed seeking for an interim injunction to restrain the respondent from exhibiting any digital content as per the agreement dated 23.08.2020 pending final disposal of arbitration. Arb.Appln.No.286 of 2024 has been filed seeking for appointment of an Advocate Commissioner by this Court. Arb.O.P.(Com.Div.)No.537 of 2024 has been filed seeking for appointment of an Arbitrator by this Court.
2. Heard Mr.Dhanaram Ramachandran, learned counsel appearing for the applicant; and Mr.M.S.Niranjan, learned counsel, for Ms.S.P.Arthi, learned counsel, for the respondent.
3. A preliminary issue has been raised by the respondent questioning the jurisdiction of this Court to decide these applications. According to the respondent, this Court lacks territorial jurisdiction to decide these applications for the following reasons:-
(a) No part of cause of action arose within the jurisdiction of this Court, as the contract, which is the subject matter of the dispute between the parties, was entered into only at Mumbai, and the stamp paper in which the contract was written was also purchased only at Mumbai.According to the respondent, no part of the obligations have to be performed by either of the parties at Chennai or within the State of Tamil Nadu.
(b) According to the respondent, since they are having their office only at Sangli, Maharashtra, it is only the Bombay High Court which has got jurisdiction to decide these applications filed under Sections 9 and 11 of the Arbitration and Conciliation Act, 1996 (in short “the Act”).
(c) According to the respondent, by a typographical mistake, eventhough in the first part of the arbitration clause, Mumbai has been mentioned, in the later part of the clause, inadvertently, Chennai has been typed, and therefore, whenever there is an ambiguity with regard to jurisdiction, Court should interpret the clause against the party who has drafted the contract. According to the respondent, since the contract was drafted by the applicant, this court should interpret the arbitration clause by holding that this Court lacks territorial jurisdiction to decide these applications filed under Section 9 of the Act as well as under Section 11 of the Act.
4. On the other hand, the applicant would submit that since the respondent had given consent for appointment of an Advocate Commissioner before this Court in the application filed under Section 9 of the Act, and the Advocate Commissioner had also taken inventory from the respondent's premises pursuant to the orders passed by this Court, by applying Section 42 of the Act, only this Court has got jurisdiction to decide these applications, as under Section 42 of the Act, any subsequent applications filed under Part-I of the Act, can be entertained only by this Court, which has already exercised jurisdiction in the application filed by the application under Section 9 of the Act.
5. By relying upon the arbitration clause contained in the contract, which is the subject matter of dispute between the parties, which, in the later part of the said clause, reveals that Chennai Courts have got jurisdiction, the ap
