M/S Ashutosh Buildtech Pvt. Ltd. vs M/S S.B. Enterprises And 2 Others
2023 Latest Caselaw 23143 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


?Neutral Citation No. - 2023:AHC:171279
 
Court No. - 46
 

 
Case :- ARBITRATION AND CONCILI. APPL.U/S11(4) No. - 180 of 2022
 

 
Applicant :- M/S Ashutosh Buildtech Pvt. Ltd.
 
Opposite Party :- M/S S.B. Enterprises And 2 Others
 
Counsel for Applicant :- Utkarsh Dixit,Anupam Shyam Dwivedi,Sudhir Dixit
 
Counsel for Opposite Party :- Shubham Dwivedi,Shivam Dwivedi,Shubham Dwivedi
 

 
Hon'ble Ashwani Kumar Mishra,J.

1. This application has been filed for appointment of Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996").

2. Existence of arbitration clause or accrual of dispute inter-se between the parties is not in issue. What is in issue is the jurisdiction of this Court to entertain the present application. The clause 14 of the Agreement, which is acceptable to both the parties, reads as under:-

"14. Jurisdiction and Dispute Resolution:

All dispute are subject to Jodhpur jurisdiction. However, if any dispute arises during the course of execution of alloted work, the same shall be resolved through appointment of Arbitrator as per Arbitration and Conciliation Act, 1996."

3. Mr. Sudhir Dixit, learned counsel appearing for the applicant states that most of the work relating to contract has been performed at Agra and that mere fact that head office of the opposite party is at Jodhpur, would not mean that the jurisdiction would be at the Courts of Jodhpur and not at Agra. Learned counsel for the applicant submits that Clause 14 is in two parts. The first part provides that all disputes are subject to Jodhpur jurisdiction. The second part however is in the nature of exception to the first part as per which any dispute arising during the course of execution of alloted work is to be resolved through appointment of Arbitrator as per the Act, 1996. The dictionary meaning assigned to term "However" in the Oxford Advanced Learner's Dictionary (New 9th Edition), is relied upon and is reproduced hereinunder:-

"used to introduce a statement that contrasts with sth that has just been said".

4. With reference to above the definition, learned counsel for the applicant submits that jurisdiction of the Courts at Uttar Pradesh are not ousted since the arbitration clause is an independent clause and the jurisdiction of the Courts are not to be read subservient to it.

5. The contention advanced on behalf of the applicants is opposed by Mr. Shubham Dwivedi, learned counsel for the opposite parties who places reliance upon the judgment of the Hon'ble Supreme Court in Indus Mobile Distribution Private Limited Vs. Datawind Innovations Private Limited & Ors. reported in 2017 7 SCC 678 wherein following observations have been made:-

"20. A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction ? that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Section 16 to 21 of the CPC be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties.

21. It is well settled that where more than one court has jurisdiction, it is open for parties to exclude all other courts. For an exhaustive analysis of the case law, see Swastik Gases Private Limited v. Indian Oil Corporation Limited, (2013) 9 SCC 32. This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal and Another v. Chhattisgarh Investment Limited, (2015) 12 SCC 225. Having regard to the above, it is clear that Mumbai courts alone have jurisdiction to the exclusion of all other courts in the country, as the juridical seat of arbitration is at Mumbai. This being the case, the impugned judgment is set aside. The injunction confirmed by the impugned judgment will continue for a period of four weeks from the date of pronouncement of this judgment, so that the respondents may take necessary steps under Section 9 in the Mumbai Court. Appeals are disposed of accordingly."

6. Learned counsel for the respondents has also placed reliance upon the subsequent judgment rendered by Hon'ble Supreme Court in Brahmani River Pellets Limited Vs. Kamachi Industries Limited reported in 2020 5 SCC 462 wherein the Supreme Court has made following observations:-

"16. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the "venue" of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik, non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference.

17. When the parties have agreed to have the "venue" of arbitration at Bhubaneswar, the Madras High Court erred in assuming the jurisdiction under Section 11(6) of the Act. Since only Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order is liable to be set aside.

18. In the result, the impugned order of the Madras High Court in OP No.398 of 2018 dated 02.11.2018 is set aside and this appeal is allowed. The parties are at liberty to approach the Orissa High Court seeking for appointment of the arbitrator."

7. Reliance was also placed by learned counsel for the respondents upon a judgment passed by this Court in Arbitration and Conciliation Application u/s 11(4) No. - 69 of 2014 (M/s Aargee Engineers & Co. And Another Vs. Era Infra Engineering Ltd. And 2 Ors.).

8. In reply to the objections raised by learned counsel for the respondents, learned counsel for the applicants submits that above judgments have no applicability in the facts of the present case, inasmuch as, the above referred judgments would be applicable only where the arbitration clause vests exclusive jurisdiction in the Courts station at a particular place and since this is not the scenario here as such the above judgments will have no bearing.

9. I have heard the learned counsel for the parties and have carefully perused the material on record.

10. Law with regard to the conferment of jurisdiction upon a Court in the matter of arbitration is somewhat distinct from the jurisdiction of a court in the matter of filing of suit etc. The jurisdiction in the matter of filing of suit etc. is determined by the provisions contained under section 20 of the Code of Civil Procedure and it is settled that even by consent, the parties cannot confer jurisdiction in a Court which otherwise has no jurisdiction in terms of Section 20 of Code of Civil Procedure. However, in the matters of arbitration, the parties are free to vest jurisdiction even in a Court which otherwise gets no jurisdiction by virtue of Section 20 of the Code. The object behind this distinction is the voluntariness on the part of the parties for the purposes of availing the alternative redressal of their dispute.

11. In the facts of the present case, clause 14 specifically contemplates that all disputes between the parties are subject to Jodhpur jurisdiction. The term "however" acts in the nature of an exception for the purposes of availing alternative dispute redressal forum i.e. the arbitration. Term "however", therefore cannot be read as waving in any manner. Jurisdiction of the Courts at Jodhpur which is, otherwise, agreed upon between the parties.

12. A similar question, on facts, has been examined by the Supreme Court in Swastik Gases Pvt. Ltd. (supra) wherein the Supreme Court had the occasion to consider a similar clause where exclusive jurisdiction was not vested in a particular Court. After referring to the previous judgement on the issue, the Supreme Court observed as under in paragraph nos.31, 32 & 33 of judgment which is reproduced hereinunder:-

"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, the 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 the Chief Justice of the Rajasthan High Court has been excluded?

32. 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?, ?only?, ?exclusive? or ?exclusive jurisdiction? have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties?by having Clause 18 in the agreement?is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner.

33. The above view finds support from the decisions of this Court in Hakam Singh [Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286] , A.B.C. Laminart [A.B.C. Laminart (P) Ltd. v. A.P. Agencies, (1989) 2 SCC 163] , R.S.D.V. Finance [R.S.D.V. Finance Co. (P) Ltd. v. Shree Vallabh Glass Works Ltd., (1993) 2 SCC 130] , Angile Insulations [Angile Insulations v. Davy Ashmore India Ltd., (1995) 4 SCC 153] , Shriram City [Shriram City Union Finance Corpn. Ltd. v. Rama Mishra, (2002) 9 SCC 613] , Hanil Era Textiles [Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd., (2004) 4 SCC 671] and Balaji Coke [Balaji Coke Industry (P) Ltd. v. Maa Bhagwati Coke Gujarat (P) Ltd., (2009) 9 SCC 403 : (2009) 3 SCC (Civ) 770] ."

13. Clause 14 is specific and by virtue of it, the Courts at Jodhpur alone would have jurisdiction in the matter of appointment of Arbitrator. This Court will have no territorial jurisdiction to entertain the present petition for appointment of Arbitrator.

14. It is accordingly, dismissed leaving it open for the applicant to avail remedy before the competent forum.

15. This application filed under Section 11 of the Act, 1996 is consigned to record.

Order Date :- 24.8.2023

Sachin/