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2024 Supreme(Mad) 2320

IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. LAKSHMINARAYANAN, J.
BVM Global Educational Trust Represented by Managing Trustee Mr.A.S.Ramana Prasad – Appellant 
Versus 
BSCPL Infrastructure Limited Represented by Senior Manager and Accounts Officer Mr.Narendra – Respondent 
C.R.P.(PD).Nos. 4324, 4325 & 4329 of 2024 & C.M.P.Nos. 24039, 24041 & 24061 of 2024 
Decided on : 24-10-2024

Advocates:
Advocate Appeared:
For the Appellant : Mr. Harishankar Mani (In all petitions)
For the Respondent: Mr. R.Thiyagarajan (In all petitions)

Once parties establish the seat of arbitration, invoking jurisdiction elsewhere under the Arbitration and Conciliation Act, 1996 is impermissible.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Dispute over rental payments under a lease - Jurisdiction for arbitration set in agreement as Chennai, thus application under Section 9 in Chengalpattu not maintainable. (Paras 2, 6, 10)

(B) The Court suggested appointing a sole Arbitrator due to long-standing disputes, resulting in consent for Justice V. Parthiban (Retd.) to resolve matters. (Paras 12, 13)

Facts of the case:
The lessee and lessor engaged in arbitration following a rental dispute under a lease agreement dated 05.12.2009, with nothing resolved after five years.

Findings of Court:
The court held that the learned Principal District Judge had no jurisdiction, resulting in the original petitions being struck off and appointing an Arbitrator for dispute resolution.

Issues: Main issues included the jurisdiction for invoking Section 9 per the arbitration agreement and the five-year delay in resolving disputes.

Ratio Decidendi: The court ruled that once a seat for arbitration is established, it is not open to either party to invoke jurisdiction elsewhere, maintaining the necessity for jurisdictional adherence under the arbitration agreement.

Result: Civil Revision Petition allowed; Original Petitions struck off.

Table of Content
1. dispute relates to non-payment of rent. (Para 1 , 2)
2. interim order granted by the district judge. (Para 3 , 4)
3. governing law and jurisdiction agreed. (Para 5 , 6)
4. jurisdiction defined by seat of arbitration. (Para 8 , 9 , 10)
5. appointment of sole arbitrator suggested. (Para 11 , 12)
6. civil revision petition allowed; original petitions struck off. (Para 13 , 14)

ORDER :

V. LAKSHMINARAYANAN, J.

These Civil Revision Petitions seeks to struck off the Original Petitions in O.P.Nos.245 to 247 of 2024, on the file of the learned Principal District Judge, Chengalpattu. The aforesaid Original Petitions had been presented invoking the provisions of Section 9 of the Arbitration and Conciliation Act, 1996. There is no dispute in the relationship between the parties.

2. The civil revision petitioner is the lessee and the 1st respondent is the lessor. On account of the fact that the civil revision petitioner allegedly did not pay the rentals as per the lease agreement entered into between the parties on 05.12.2009, dispute arose between them. Both sides agreed that they will nominate their respective Arbitrators but as the Presiding Arbitrator could not be appointed, they did not proceed further. The dispute arose in the 2019. After a lapse of about 5 years, the 1st respondent invoked the provisions of Section 9 of the Arbitration and Conciliation Act and moved the learned Principal District Judge, Chengalpattu, for the relief set forth in the Original Petitions.

3. The learned Principal District Judge, Chengalpattu, was pleased to grant an interim order in two of the Original Petitions filed under Section 9 and issued a notice in the third Original Petition.

4. On being served with the summons, the civil revision petitioner who is the 1st respondent before the learned Principal District Judge, Chengalpattu, has presented the present Civil Revision Petitions. According to the civil revision petitioner, in terms of arbitration clause that exists between the parties, they had agreed that the governing law for the parties will be the laws of the Republic of India and the same shall be subject to the exclusive jurisdiction of the competent Courts in Chennai. This is as per Clause 9 of the said agreement.

5. In terms of Clause 10 too the parties agreed that venue of arbitration shall be at Chennai.

6. The grievance of the civil revision petitioner is that when the parties have agreed to the jurisdictional seat for arbitration as Chennai, moving an application under Section 9 before the learned Principal District Judge, Chengalpattu, is not maintainable. This is the basic and the only plea of Mr.Harishankar Mani.

7. Mr.R.Thiyagarajan, appearing for the 1st respondent / caveator states that as the property situated within the jurisdiction of the Court in Chengalpattu, his client has moved the proceedings before the learned Principal District Judge, Chengalpattu.

8. I have carefully considered the submissions of both the sides and perused the records.

9. Insofar as the Arbitration and Conciliation Act is concerned, it gives absolute freedom to the parties to select the governing law and the seat of arbitration. Once the seat of arbitration is agreed upon, it is not open to any one of the parties to choose any other jurisdiction for the purpose of invoking Section 9 of the Arbitration and Conciliation Act. The position has been settled by the Supreme Court in Indus Mobile Distribution Private Limited Vs. Datawind Innovations Private Limited2017 (7) SCC 678 .

10. Therefore, I necessarily have to come to the conclusion that the learned Principal District Judge, Chengalpattu, had no jurisdiction to entertain the arbitration proceedings.

11. Stopping with this is not going to help either parties, as there is a dispute simmering for over 5 years. The owner of the property pleads that there is a due of Rs.16,51,23,760/-, whereas, the tenant pleads that he has paid a sum of Rs.10,83,52,548/- leaving a paltry sum of Rs.1,50,00,000/- as b

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