The Calcutta High Court dismissed an application filed under section 9 of The Arbitration and Conciliation Act, 1996 for an injunction restraining respondent no. 1 Bharat Heavy Electricals Limited (BHEL), from invoking and encashing the performance bank guarantee issued by respondent no. 2 Punjab and Sind Bank and the modified performance bank guarantee of 7th April 2021 and 8th March 2022 respectively. The Court, while interpreting an arbitration clause where the Work Order specifies that the seat of arbitration shall be Kolkata but clarifies in brackets that the seat will be the place from where the contract is issued, said that the intention of the parties has to be given due weightage.
Brief Facts:
The petitioner has filed the present application under section 9 of The Arbitration and Conciliation Act, 1996 for an injunction restraining respondent no. 1, Bharat Heavy Electricals Limited (BHEL), from invoking and encashing the performance bank guarantee issued by the respondent. Respondent no. 1 BHEL takes a preliminary objection to the maintainability of the application.
Contentions of the Applicants:
Learned counsel appearing for the petitioner opposed the point of maintainability on the ground of jurisdiction and submitted that the parties intended that the seat of the arbitral tribunal would be in Kolkata and that the words in Bracket are only meant for the convenience of the arbitral tribunal or the parties for conducting the proceedings of the arbitration. The Counsel argued that the bracketed portion does not change the seat of arbitration.
Contentions of the Respondents:
Learned counsel appearing for the respondent submitted that the High Court is not the “Court” within the meaning of section 2(1)(e) of the Act for the purposes of the present application as no part of the cause of action arose within the original territorial jurisdiction of this Court. Counsel further relies on the Work Order to urge that the seat of arbitration has been designated to be the place from where the contract is issued, which is Salt Lake City, Kolkata.
The Court observed that in the present case, the arbitration clause in the GCC and in the Work Order specifies that the seat of arbitration shall be Kolkata but clarifies that the seat will be the place from where the contract is issued. The latter part is within brackets. The ordinary and plain meaning of this clause with due weightage given to the intention of the parties while inserting this clause, post-amendment, cannot and would not point to any other construction besides holding that the parties intended to “seat” the arbitration at the place from where the contract is issued.
The decision of the Court:
The Calcutta High Court, dismissing the petition, held that the petition was not maintainable before this court as the seat of arbitration is Parganas, Kolkata. Therefore, the dispute falls within the jurisdiction of the Commercial Court at Rajarhat.
Case Title: Harji Engineering Works Pvt. Ltd. v Bharat Heavy Electricals Limited & Anr.
Coram: Hon’ble Justice Moushumi Bhattacharya
Case no.: AP/474/2023
Advocate for the Petitioner: Mr. Sirsanya Bandopadhyay
Advocate for the Respondents: Mr. Rohit Das
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