Lsi Logistic Shipping ... vs Rrc International Freight ...
2017 Latest Caselaw 8682 Bom

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                  ORDINARY ORIGINAL CIVIL JURISDICTION
                        IN ITS COMMERCIAL JURISDICTION

               NOTICE OF MOTION (LODGING) NO.738 OF 2017
                                  IN
               COMMERCIAL SUIT (LODGING) NO.608 OF 2017


      RRC International Freight Services Limited )
      2nd Floor, Great Social Building,           )
      60, Sir P.M. Road,For, Mumbai - 1.          )            ...Applicant
                                                  )            ...Ori.Deft.
      IN THE MATTER BETWEEN :                     )
                                                  )
      LSI Logistic Shipping International S.A.    )
      Incorporated under the law of Luxemburg )
      Having sole shareholder Mr.Pirre Hubert )
      (through its Constituted Attorney, Mr.Balan )
      Pattani), having its office at 20, Rue De   )
      Hollerich, L-1740, Luxembourg.              )            ...Plaintiff
                                                  )
                  ....Versus....                    )
                                                  )
      RRC International Freight Services Limited )
      2nd Floor, Great Social Building,           )
      60, Sir P.M. Road,For, Mumbai - 1.          )            ...Defendant


      Mr.Rohit Kapadia, Senior Counsel with Mr.Karl Shroff i/b Mr.Nilesh
      Parekh for the Plaintiff.

      Mr.Milan Desai with Ms.Shaila Taware for the Applicant in Notice of
      Motion (Lodging) No.738 of 2017 (Original Defendant).

                                      CORAM : R.D. DHANUKA, J.

DATE : 14TH NOVEMBER, 2017.

ORAL JUDGMENT :-

1. By this notice of motion, the applicant (original defendant)

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prays that the issue of jurisdiction be decided as a preliminary issue

under section 9-A of the Code of Civil Procedure, 1908. In view of the

plea of jurisdiction raised by the defendant in the affidavit in reply,

the following issue is framed :-

"Whether jurisdiction of this Court is ousted in light of the terms of the contract :

(i) that contract is governed by Law of England and Wales and

(ii) in case of any disputes the place of jurisdiction shall be London" ?

2. Learned counsel appearing for the parties have addressed

this Court on this issue based on the pleadings filed by them.

3. Learned counsel for the applicant in this notice of motion

invited my attention to the contract entered into between the parties

on 17th April, 2017 and more particularly paragraph XXIII and XXIV,

which provide that law that prevails will be the English Law. If

necessary, the place of jurisdiction will be at London. He also invited

my attention the letter dated 25th August, 2017 addressed by the

original plaintiff to the applicant stating that the contract is governed

by Law of England and Wales and also submitting to the jurisdiction

of High Court in London. It is stated that the plaintiff has no alternate

but to pursue the claim against the applicant in the High Court in

London in respect of the claim set out in the said letter.

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4. It is submitted by the learned counsel that in view of the

aforesaid two clauses in the contract entered into between the parties

and in view of the statement made by the original plaintiff in its own

letter that the parties are governed by English Law and the

jurisdiction would vest in London Court, the plaintiff could not have

filed this suit in this Court. He submits that this Court has thus no

territorial jurisdiction to entertain, try and dispose of the suit and thus

on that ground itself the suit deserves to be dismissed.

5. Mr.Kapadia, learned senior counsel appearing for the

original plaintiff on the other hand invited my attention to the

averments made in the plaint and also various provisions of the

contract entered into between the parties on 17 th April, 2017. He

submits that the plaintiff was entrusted with the work of transporting

10,000 tons of Metro Rails from Vladivostok Port to the site of

Maharashtra Metro Rail Corporation Limited (MMRCL) at Nagpur.

The plaintiff has already transported to the said Metro Rails from

Vladivostok Port to Mumbai Port through a third party. The plaintiff

and the defendant entered into a contract dated 17th April, 2017

whereby the defendant was to transport the said Metro Rails from

Mumbai Port to the MMRCL site at Nagpur. He also invited my

attention to the rubber stamp of the applicant (original defendant)

affixed on each of the page of the contract entered into between the

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parties and would submit that the said stamp would clearly indicate

that the contract was executed in Mumbai.

6. It is submitted that since no part of cause of action had

arrived at London, even by consent of parties, the parties could not

have conferred jurisdiction upon the Courts in London. He submits

that substantial part of cause of action for filing the suit has arisen in

Mumbai and thus this Court has territorial jurisdiction to entertain, try

and dispose of the suit.

7. Learned senior counsel placed reliance on the judgment

of the Supreme Court in case of A.B.C. Laminart Pvt. Ltd. & Anr.

vs. A.P. Agencies, Salem, (1989) 2 SCC 163 and in particular

paragraphs 9, 10, 11, 16, 18 and 21 and would submit that since no

part of cause of action had arisen at London, the parties could not

have conferred the jurisdiction on Courts in London. If any such

agreement between the parties is arrived at conferring the jurisdiction

on the Court which does not have jurisdiction, it is void and would be

contrary to section 28 of the Indian Contract Act, 1872.

8. Learned counsel for the applicant in rejoinder made an

attempt to distinguish the judgment of the Supreme Court in case of

A.B.C. Laminart Pvt. Ltd. & Anr. (supra) and would submit that the

plaintiff itself being a foreign company had agreed that the dispute

with the applicant would be subject to Laws of England and subject

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to the Courts in London. He submits that the parties would be

governed by private International Law and thus the provisions of the

Indian Contract Act, 1872 would not be attracted. He also placed

reliance on the judgment of the Supreme Court in case of M/s.Swati

Gases P. Ltd. vs. Indian Oil Corporation Limited, decided on 12th

July, 2013 in Civil Appeal No.5086 of 2013 and in particular

paragraphs 23, 28 and 31.

9. It is submitted that though the rubber stamp of the

defendant was affixed on each page of the contract showing the

address of the respondent at Mumbai, after affixing the signature of

the defendant on the said contract, the said agreement was sent to

the plaintiff at Luxembourg and the same was executed by the

plaintiff at the place of its office address at Luxembourg. Upon

raising the query by this Court whether any such plea is raised by the

applicant in the affidavit in support of the notice of motion or in the

affidavit in reply filed to the notice of motion filed by the original

plaintiff, learned counsel fairly admits that no such plea has been

raised by the applicant. Upon further raising a query by this Court as

to whether any part of cause of action has arisen in London, learned

counsel fairly admits that no part of cause of action had arisen in

London.

10. A perusal of the contract entered into between the parties

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indicates that the defendant had agreed to transport Metro Rails from

Vladivostok Port to the site of Maharashtra Metro Rail Corporation

Limited at Nagpur. The rubber stamp affixed on the contract entered

into between the parties also indicates that the contract was signed in

Mumbai. It is not in dispute that the defendant is carrying out

business in Mumbai. In paragraph 34 of the plaint, the plaintiff has

averred that the registered office of the defendant is situated within

the territorial jurisdiction of this Court. The defendant has been

carrying the business in Mumbai. Substantial part of the cause of

action in filing the present suit has arisen in Mumbai and thus this

Court has territorial jurisdiction to entertain, try and dispose of the

present suit. Though affidavit in reply has been filed by the defendant

to the notice of motion filed by the applicant and also a separate

notice of motion is filed by the applicant raising the issue of territorial

jurisdiction under section 9-A of the Civil Procedure Code, 1908, no

plea is raised by the applicant (original defendant) that no cause of

action has arisen in Mumbai or stating that any part of cause of action

had arisen in London. A perusal of the said contract clearly provides

that various obligations of the parties were to be performed by the

parties in Mumbai. I am thus inclined to accept the submission of the

learned senior counsel for the original plaintiff that substantial part of

cause of action had arisen in Mumbai.

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11. Insofar as the submission of the learned counsel for the

applicant that in the contract and more particularly in clauses XXIII

and XXIV of the agreement, the parties have agreed that the law that

prevails would be English Law and if necessary, the place of

jurisdiction will be at London and thus it will be for the plaintiff to show

that what part of cause of action had arisen at London is concerned,

in my view there is no merit in the submission made by the learned

counsel. The plaintiff has made sufficient averments in the plaint as to

what part of cause of action had arisen in Mumbai. Insofar as those

provisions of the contract and more particularly clauses XXIII and

XXIV are concerned, in my view since no part of cause of action has

arisen in London, the parties even by consent cannot confer the

jurisdiction on that Court which Court does not have jurisdiction to

entertain, try and dispose of the suit.

12. The Supreme Court in case of A.B.C. Laminart Pvt. Ltd.

(supra) has categorically held that the jurisdiction of the Court in

matter of a contract depends on the situs of the contract and the

cause of action arising through connecting factors. It is held that if it is

found that the parties have agreed to confer jurisdiction on the Court

which does not have jurisdiction, such agreement, would be void and

contrary to section 28 of the Indian Contract Act, 1872. In my view,

the principles laid down by the Supreme Court of A.B.C. Laminart

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Pvt. Ltd. (supra) would clearly apply to the facts of this case.

13. Insofar as the judgment of the Supreme Court in case of

M/s.Swastik Gases P. Ltd. (supra) relied upon by the learned

counsel for the applicant is concerned, the facts before the Supreme

Court in that matter were that part of cause of action had arisen at

Jaipur (Rajasthan) and some part of cause of action had arisen at

Kolkata. The parties in the contract arrived at between them agreed

that the dispute, if any, would be subject to the Kolkata jurisdiction.

The Supreme Court considered the rival submissions made by the

parties and more particularly the contention that since the parties had

not agreed to exclusive jurisdiction of Kolkata High Court, whether

Kolkata High Court would exercise jurisdiction to entertain, try and

dispose of the dispute between the parties. In that context, the

Supreme Court held that 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 but that

would not be decisive and does not make any material difference. It is

held that since the parties had made a provision that the agreement

was subject to the jurisdiction of a Court having concurrent

jurisdiction, the parties have amicably and exclusively agreed to the

exclusion of the jurisdiction of the other Courts. In my view, the

judgment of the Supreme Court M/s.Swastik Gases P. Ltd. (supra)

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will not even remotely apply to the facts of this case. In this case, the

parties have not conferred the jurisdiction exclusively on any one

Court out of the two Courts, having concurrent jurisdiction.

14. Insofar as the reliance placed by the defendant on the

letter dated 25th August, 2017 addressed to the applicant contending

that the contract was governed by Law of England and Wales and

also that the jurisdiction of High Court in London has jurisdiction and

the plaintiff will have no alternate but to pursue the claim against the

applicant in the High Court in London is concerned, in my view even if

a party takes an erroneous stand in the pleading or in the

correspondence that a particular Court has jurisdiction to entertain,

try and dispose of the suit which Court though has no jurisdiction, by

raising such erroneous plea, that Court will have no jurisdiction to

entertain, try and dispose of the proceeding. There is no estoppal

against law. The Court has to verify whether the Court has territorial

jurisdiction to entertain, try and dispose of the suit after considering

various facts in the matter, including the place of execution of

contract between the parties and place of accrual of cause of action.

In my view, merely because such a contention is raised by the

plaintiff in the said letter, that would not bind this Court to accept the

plea that London Court has jurisdiction and this Court does not have

jurisdiction in view of the fact that no cause of action has admittedly

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arisen in London.

15. For the reasons recorded aforesaid, the issue framed by

this Court under section 9-A of the Code of Civil Procedure, 1809 is

answered in negative. In my view, this Court has territorial jurisdiction

to entertain, try and dispose of this suit. There is no merit in the

submission of the defendant that parties are governed by private

International Law.

16. The notice of motion is thoroughly misconceived and is

accordingly dismissed. No order as to costs.

(R.D. DHANUKA, J.)