The court affirmed that jurisdiction must be inherently valid and cannot be conferred by consent if lacking, emphasizing the importance of the location of the cause of action in arbitration agreements.

JUDGMENT

G.S. Sandhawalia, ACJ.

The present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') has been filed by the petitioner for appointment of independent sole arbitrator to adjudicate upon the disputes between the parties.

2. It is pointed out that as per the Letter of Intent dated 04.08.2018 (Annexure P-1), the work for design and construction of Delhi Meerut Expressway from Dasna to Meerut in the State of Uttar Pradesh on EPC Basis and for Design and installation of Solar system and highway lighting and dedicated 11 KV feeder for Highway Lighting (COS) was awarded to the petitioner. The said Letter of Intent executed at Gurugram provides for an arbitration clause which reads as under:-

"In the event of any difference or dispute arising out of or in connection with this work order, the same shall be first amicably settled by mutual dialogue. If the parties fail to settle the difference or dispute arising out of or in connection with this work order (including interpretation of the terms thereof), the same shall be referred to arbitration. The Arbitration proceedings shall be conducted by a sole Arbitrator, Managing Director of GRIL and the award/decision of such arbitrator shall be final and binding upon both the parties. The venue of the arbitration shall be Udaipur. This contract is governed as per Law of India. However, the work shall not be stopped during the pendency of the proceedings and it shall be ensured that such work is preceded uninterruptedly".

3. In pursuance to the above, the work order (Annexure P-2) was executed between the parties but the same was terminated on 06.07.2019 vide Annexure P-11. The petitioner had objected to the illegal termination of the agreement vide letter dated 07.07.2019 (Annexure P-13) and putforth the steps it had already undertaken in pursuance of the work order and put the respondents to a notice that they have to go for arbitration as per the Arbitration and Conciliation Act of 1996. The respondents were put to a notice of 21 days to withdraw the termination order. The matter could not be amicably settled as noticed in the letter dated 22.08.2019 (Annexure P-17) and therefore, the respondents were put to notice that the petitioner was taking the next course of action.

4. In reply to the petition, the stance taken is that the parties have agreed to the exclusive jurisdiction of the Court and venue of the arbitration at Udaipur. It is mentioned that the disputed amount exceeds Rs. 1 Crore and therefore, a panel of three arbitrators was required to be constituted. A reference was made to clause 44.4 of the General Conditions of Contract regarding the exclusion of jurisdiction which is appended as Annexure R-2 and the same reads as under:-

"44.4 Arbitration Procedure:-

Arbitration shall be conducted in accordance with Arbitration and Conciliation Act, 1996 and its subsequent amendments. If the disputed amount is less than INR. 1 Cr., the Arbitration Proceedings shall be conducted by a sole Arbitrator and if the disputed amount is more than INR 1 Cr. the proceedings shall be conducted by a panel of 3 Arbitrators. Arbitral Tribunal shall be appointed in accordance with the Arbitration and Conciliation Act, 1996. Venue of Arbitration shall be Udaipur and language shall be English. Courts in Udaipur shall have exclusive jurisdiction."

5. By way of filing a rejoinder (sic replication), the petitioner as such fell back on the definition of a Court as provided under Section 2 (e) of the Act of 1996 and the plea taken was that the registered office of the petitioner is in Mohali, Punjab and the branch office in Gurugram (Haryana) whereas the registered office of the respondent is in Ahmedabad (Gujarat) and also an office in Gurugram. The contract was executed for construction of the roads between Dasna and Meerut in the State of Uttar Pradesh and none of these locations fell within the jurisdiction of the Courts located at Udaipur and therefore, there