The designation of a jurisdictional 'seat' in arbitration agreements is critical; parties must adhere to contractual terms for determining jurisdiction, confirming that Mumbai was the agreed 'seat' of arbitration.

JUDGMENT :

Jaspreet Singh, J.

1. Heard Shri Pratham Mehrotra and Shri Manish Mehrotra, learned counsel for the petitioner and Shri Kumar Ayush, learned Counsel appearing for the respondent.

2. The instant petition has been preferred under Section 11 (6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as Act, 1996) seeking appointment of a sole Arbitrator to resolve the disputes having arisen between the parties, emerging from a franchisee agreement dated 18.01.2018.

3. Submission of the learned counsel for the petitioner is that a franchisee agreement was executed initially between Essar Oil Ltd. and the petitioner. In furtherance of the said agreement, the petitioner invested a sum of Rs.1.5 crores and odd to establish a petrol pump. It is the case of the petitioner that since Essar Oil Ltd. is a bulk supplier to the Indian State Controlled Petroleum Companies, hence it colluded with the local companies, as a consequence, the retail price of petrol and petroleum products were dearer at the Essar Petrol Pump in comparison to the pumps operated by the Government Control Petroleum Company.

4. It is also stated that Essar Oil Ltd. established another local company, namely, M/s. Nayara Energy Ltd. and the local business of petrol pumps was merged in the said company and M/s. Nayara Energy Ltd. stepped into the shoes of Essar Old Ltd. and took over the management and control of the erstwhile company Essar Oil Ltd.

5. M/s. Nayara Energy Ltd., the respondent company terminated the dealership/franchisee agreement of the petitioner by an unilateral decision dated 18.08.2023. The termination was against the interest of the petitioner as well as in violation of the terms as contained in the franchisee agreement. Since disputes had arisen, accordingly the petitioner invoked the dispute resolution mechanism and sent a letter to the respondent on 18.09.2023 calling upon the respondent to resolve the same amicably and in case if the same did not materialise, then the petitioner also suggested a name of the Former Judge of this Court, who may be appointed as a sole Arbitrator and a request was made to the respondent that it may give its consent.

6. It is urged that despite the aforesaid invocation of the arbitration clause, no response was given by the respondent, as a consequence, the petitioner was compelled to institute the above petition and it is urged that this Court may appoint the sole Arbitrator exercising powers under section 11(6) of the Act. 1996.

7. Shri Kumar Ayush, learned counsel for the respondent has raised a preliminary objection indicating that this Court does not have the jurisdiction to appoint the sole Arbitrator. The crux of the submission of the respondent is that though the franchisee agreement was signed at NOIDA and the dealership of the petrol pump related to District Amethi in State of Uttar Pradesh. However, the parties had agreed that the arbitration proceedings will be held in Mumbai coupled with the fact that clause 22 of the franchisee agreement provided for an exclusive jurisdiction clause which excluded the jurisdiction of all other Courts including the Courts at Lucknow are vested powers of appointment of the Arbitral Tribunal and supervision of the arbitral proceed