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2015 Supreme(All) 508

ALLAHABAD HIGH COURT
BEFORE : SUNEET KUMAR, J.
M/s. BALAJI ENTERPRISES AND ANOTHER .....Applicants
Versus
M/s. MAIDEN PHARMACEUTICALS AND ANOTHER .....Respondents
(Arbitration and Conciliation Application No. 5 of 2012, decided on 26th February, 2015)

Advocates:
Counsel :
N.K. Chaturvedi for the Applicants; Rajiv Joshi for the Respondents.

Headnote:Arbitration and Conciliation Act, 1996—Section 11(6)—Appointment—Arbitrator—Jurisdiction of Court—Application for appointment of Arbitrators filed before Allahabad High Court—Clause 15 of the agreement, stipulates that only Courts at Chandigarh have the jurisdiction—Hence, application filed not maintainable—However, dismissal of application, not precludes the applicant from approaching the Court having jurisdiction at Chandigarh. [Paras 7 and 8]

JUDGMENT

Hon’ble Suneet Kumar, J.—This application has been filed under Section 11(6) of the Arbritration Conciliation Act, 1996 read with Scheme for appointment of Arbitrators by the Chief Justice of Allahabad High Court, 1996 for appointment of an Arbitrator.

2. M/s. Maiden Pharmaceuticals having its registered office at Chandigarh, entered into an agreement on 27.1.2007 with the applicant firm M/s. Balaji Enterprises appointing the firm as consignee agent on commission basis for Western Uttar Pradesh.

3. Clause 15 of the agreement provides as under :

“15. In case of any dispute, an Arbitrator will be appointed to resolve the dispute amicably, before going to the Court of law. In failure to resolve the disputes through arbitration, all disputes will be subject to Jurisdiction of Chandigarh Court.”

4. It is contended on behalf of the opposite party that Clause 15 is not an agreement to refer the dispute under the Arbitration and Conciliation Act, further this Court shall have no jurisdiction, only Courts at Chandigarh shall have jurisdiction.

5. A bare perusal of Clause 15 states that “all disputes will be subject to jurisdiction of Chandigarh Court”. Supreme Court in Swastik Gases P. Ltd. v. Indian Oil Corporation Ltd., relying upon earlier judgments held that if two or more Courts having jurisdiction, the parties to a contract can exclude the jurisdiction of other Courts and agree that disputes shall be subject to jurisdiction of one of the Court.

6. Paragraphs 30 and 31 is as follows :

“30. When it comes to the question of territorial jurisdiction relating to the application under Section 11, besides the above legislative provisions, Section 20 of the Code is relevant. Section 20 of the Code states that subject to the limitations provided in Sections 15 to 19, every suit shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part arises. The explanation appended to Section 20 clarifies that a corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

31. In the instant case, the appellant does not dispute that part of cause of action has arisen in Kolkata. What appellant says is that part of cause of action has also arisen in Jaipur and, therefore, Chief Justice of the Rajasthan High Court or the designate Judge has jurisdiction to consider the application made by the appellant for the appointment of an arbitrator under Section 11. Having regard to Section 11(12)(b) and Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there remains no doubt that the Chief Justice or the designate Judge of the Rajasthan High Court has jurisdiction in the matter. The question is, whether parties by virtue of clause 18 of the agreement have agreed to exclude the jurisdiction of the Courts at Jaipur or, in other words, whether in view of clause 18 of the agreement, the jurisdiction of Chief Justice of the Rajasthan High Court has been excluded. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the Courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like ‘alone’,





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