The venue clause in an arbitration agreement does not necessarily determine the court's jurisdiction if the cause of action arises within the court's territorial jurisdiction.

JUDGMENT :

SUJOY PAUL, J.

1. In this application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, the applicant has prayed for appointment of arbitrator for adjudication of the dispute between the parties which as per the applicant has arisen within the territorial jurisdiction of this bench. The interesting conundrum in this case is based on Clause 1.2.54 (k) of the Agreement entered into between the parties. Since, the said clause talks about venue and makes it clear that venue for an arbitrator shall be the place from which the letter of acceptance of tender is issued (Allahabad) or such other place as the purchaser (Railways) at his discretion may determine, the stand of respondents is that this Court does not have territorial jurisdiction to entertain present application.

2. Learned counsel for the applicant submits that tender was floated in February, 2013. The applicants original offer dated 30.4.2013 was followed by negotiated offer dated 13.11.2013. On 15.11.2014, Annexure A-4, the letter of acceptance was issued by the respondent from Allahabad. The document dated 30.4.2014 shows that contract was entered into between the parties at Jabalpur. The work was required to be performed at Jabalpur. The CBI conducted a surprise check at the site which falls within the jurisdiction of this Court where allegedly certain discrepancies were found by the CBI. On 17.12.2016 Annexure A-7, a joint meeting was convened between applicant and respondent at Jabalpur. It was agreed that applicant will recast the poles and requested for release of pending bills by letter dated 4.3.2017 Annexure 9, the respondent agreed to release the payments. They also agreed that work shall be completed by 31.12.2017.

3. Shri Verma, learned counsel for the applicant submits that entire cause of action has arisen within the territorial jurisdiction of this bench except the event of issuance of letter of acceptance. All the aforesaid events have taken place within the territory of this bench followed by termination notice dated 6.6.2017 Annexure A-10 issued from Jabalpur and followed by another termination notice of 48 hours issued from Jabalpur on 27.6.2017. The contract was terminated by order dated 17.9.2017 Annexure A-14 issued from Jabalpur. Thus, almost entire cause of action has arisen within the territory of this Bench.

4. The parties are at loggerheads on the question of jurisdiction of this Court. The serious objection raised by respondent is that jurisdiction of this Court is to be traced on the basis of Clause 1.2.54 (k). Since, prescribed venue is admittedly at Allahabad, the jurisdiction of this Court is automatically ousted. Thus, the conundrum is whether this clause (k) will oust the jurisdiction of this Court for the purpose of exercising power under sub section 6 of Section 11 of the Arbitration and Conciliation Act, 1996 (Act).

5. Shri Verma, learned counsel for the applicant relied on Bharat Aluminium Co. vs. Kaiser Allminium Technical Services INC. (2012) 9 SCC 552 (in short “Balco) and made an attempt to establish the dichotomy between venue and seat. By placing reliance on Enercon (India) Ltd. and Others vs. Enercon GMBH and Another, (2014) 5 SCC 1, learned counsel for the applicant submits that there is a difference between the seat and venue. Sub-Section 1 and 2 of Section 20 of the Act deals with place whereas sub section 3 of Section 20 talks about venue. The venue is to be fixed as per the convenience and discretion of the arbitrator during the conduct of arbitration proceedings whereas seat is the gravitational point on the strength of which jurisdiction of this Court can be determined. In the instant agreement, no seat is defined therefore, cause of action will determine the question of jurisdiction of this Court. In support of this argument, he has also placed reliance on Indus Mobile Distribution Pvt. Ltd. vs. Datawind Innovations Pvt. Ltd. and Others, (2017) 7 SCC 678. By taking this Court to various par