Jurisdiction clauses in commercial contracts are binding and determine the appropriate forum for disputes, reaffirming that claims should be resolved where agreed by the parties.

ORAL JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1. The appellant (defendant No.2) has filed the present appeal under Section 13 (1A) of the Commercial Courts Act , 2015 [the CC Act] impugning an order dated 25.04.2024 [impugned order passed by the learned LXXXII Additional City Civil and Sessions Judge, Bengaluru (CCH.83) [Commercial Court] in I.A.No.III in Com.OS.No.298/2024.

2. The respondent No.1 [plaintiff] had filed the said application under Order XXXIX Rule 1 and 2 read with Section 151 of the Code of Civil Procedure , 1908 [CPC] inter alia praying for an injunction restraining defendant Nos.1, 2 and 3 from exercising any and all rights, title, benefits and interests under the Debenture Trust Deed dated 05.12.2016 [DTD] or under any and all securities created by the plaintiffs in terms of the said DTD. The appellant is arrayed as defendant No.2 in the said suit.

3. The appellant had resisted the said application on the grounds including on the ground of jurisdiction. It is the appellant’s case that the learned Commercial Court did not have jurisdiction to entertain the suit as the DTD dated 05.12.2016 expressly provided that the courts at Mumbai would have the exclusive jurisdiction to adjudicate disputes arising out of or in relation to the DTD.

Paragraph 72.1 and 72.2 of the said DTD are set out below.

72. JURISDICTION

72.1 The parties agree that the courts and tribunals in Mumbai, Maharashtra shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with the Debenture Documents and that accordingly any suit, action or proceedings (together referred to as "Proceedings") arising out of or in connection with the Debenture Documents may be brought in such courts or the tribunals and the issuer and the Promoters and the Issuer shall ensure that the Subsidiaries irrevocably submit to and accept for themselves and in respect of their property, generally and unconditionally, the jurisdiction of those courts or tribunals.

72.2 The Issuer and the Promoters irrevocably waive any objection now or in future and the Issuer shall ensure that the Subsidiaries do not raise any objection now or in future, to the laying of the venue of any Proceedings in the courts and tribunals at Mumbai, Maharashtra and any claim that any such proceedings have been brought in an inconvenient forum and further irrevocably agree that a judgment in any Proceedings brought in the courts and tribunals at Bangalore, Karnataka shall be conclusive and binding upon them and may be enforced in the courts of any other jurisdiction, (subject to the laws of such jurisdiction) by a suit upon such judgment, a certified copy of which shall be conclusive evidence of such judgment, or in any other manner provided by law.

4. As is apparent from the plain language of paragraph 72.1 of the DTD, the parties to the DTD had agreed that the Courts and Tribunals in Mumbai, Maharashtra shall have the exclusive jurisdiction to settle any disputes which may arise out of or in connection with the debenture documents. The expression ‘arising out of’ or ‘in connection’ have been examined by the Supreme Court in Renusagar Power Co. Ltd. v. General Electric Co. ,: (1984) 4 SCC 679 and the Supreme Court had observed is under:

26. At this stage, however, we are concerned with only the first three propositions mentioned above about which no serious dispute was raised by counsel for Renusagar. We are conscious that counsel for Renusagar have strongly disputed the correctness of Proposition 4 above, but we propose to deal with their caveat against it together with the authorities relied upon by them in support thereof