M/S Height Insurance Services ... vs Reliance Nippon Life Insurance ...
2023 Latest Caselaw 1000 Cal/2

                      In the High Court at Calcutta

                          Original Civil Jurisdiction

                                Original Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                            A.P. No.173 of 2023

          M/S HEIGHT INSURANCE SERVICES LIMITED,
                           -Versus-
      RELIANCE NIPPON LIFE INSURANCE COMPANY LIMITED


     For the petitioner              :     Mr. Ratnanko Banerji, Sr. Adv.
                                           Mr. Kumarjit Banerjee, Adv.,
                                           Ms. Sanchari Chakraborty, Adv.,
                                           Ms. Tanishka Khandelwal, Adv.,
                                           Ms. Akansha Chowdhury, Adv.,
                                           Ms. Abhishikta Choudhury, Adv.


     For the respondent              :     Mr. Jishnu Saha, Sr. Adv.

Mr. Sakabda Roy, Adv.

Mr. Deepanjan Dutta Roy, Adv.

Ms. Sanjana Jha, Adv.

     Hearing concluded on            :     12.04.2023

     Judgment on                     :     20.04.2023



     The Court:-

1. A preliminary objection as to maintainability has been taken by the

respondent on the ground of lack of territorial jurisdiction of the

Calcutta High Court. It is argued by learned senior counsel for the

respondent that the arbitration clause categorically stipulates that the

Mumbai Courts would have exclusive jurisdiction, whereas the

arbitration shall be held at Kolkata. Hence, it is contended that

Kolkata was chosen merely as a venue whereas the seat of arbitration

has to be Mumbai, thereby conferring jurisdiction on the Bombay

High Court to take up an application under Section 11 of the

Arbitration and Conciliation Act, 1996 (for short, "the 1996 Act").

2. The Learned Senior Advocate for the respondent, in support of his

submission, cites a Delhi High Court judgment rendered in CVS

Insurance and Investments Vs. Vipul IT Infrasoft Pvt. Ltd., reported at

2017 SCC OnLine Del 12149, as well as another Delhi High Court

judgment delivered in Virgo Softech Ltd. Vs. National Institute of

Electronics and Information Technology, reported at 2018 SCC OnLine

Del 12723. Against Virgo Softech Ltd (supra), a special leave petition

was preferred, which was dismissed by the Supreme Court.

3. The Learned Senior Advocate next cites Ravi Ranjan Developers

Private Limted Vs. Aditya Kumar Chatterjee, reported at 2022 SCC

OnLine SC 568.

4. The Learned Senior Advocate for the petitioner, in controverting such

submissions, places reliance on BGS SGS Soma JV Vs. NHPC Limited

[(2020) 4 SCC 234], where most of the contemporary judgments in the

concerned field were discussed.

5. The petitioner also cites Mankastu Impex Private Limited Vs. Airvisual

Limited [(2020) 5 SCC 399] as well the judgment of a learned Single

Judge of the Delhi High Court in Mr. Raman Deep Singh Taneja Vs.

Crown Realtech Private Limited [2017 SCC OnLine Del 11966].

6. The petitioner further places reliance on Aniket SA Investments LLC,

Mauritius Vs. Janapriya Engineers Syndicate Pvt. Ltd., Hyderabhad

and others, rendered by a Division Bench of the Bombay High Court,

reported at 2021 (4) Mh.L.J. 123.

7. The Learned Senior Advocate for the petitioner submits that there is

no ambiguity in the arbitration clause insofar as the same clearly

designates Kolkata as the place where the arbitration proceedings

shall be held.

8. It is contended that, in the absence of any contrary indication that the

seat and the venue of arbitration would be different, Kolkata remains

the chosen seat as well as the venue of arbitration and, as such,

would confer jurisdiction on this Court to take up the present

application under Section 11 of the 1996 Act.

9. By placing reliance on the BGS SGS Soma JV (supra), it is contended

that a similar clause as the present Clause 15 fell for consideration

before the Supreme Court in the said matter, insofar as the

arbitration proceedings therein, it was stipulated, "shall be held" at

New Delhi/Faridabad.

10. A threadbare discussion was undertaken by the Supreme Court to

distinguish between "seat" and "venue" as well as the effect of Section

42 of the 1996 Act. In such perspective, it was ultimately held that

Delhi was the seat of arbitration and, as such, the Delhi High Court

had jurisdiction to take up matters pertaining to such arbitration in

the said case.

11. It is further argued that whereas the entire arbitral proceedings has

been contemplated to be held in Kolkata, the first portion of the

arbitration clause merely stipulates in general terms that the Mumbai

courts would have jurisdiction with regard to the agreement. Hence,

the Learned Senior Advocate seeks to distinguish between the subject

matter of dispute pertaining to the agreement itself and the Curial

Law to be applicable to the arbitration. Applying the latter, it is

argued that jurisdiction is conferred on the Calcutta High Court to

take up applications pertaining to the proposed arbitration.

12. A close analysis of the above principles indicates that the 'seat-venue-

place' conundrum still persists. No straight-jacket formula has been

evolved as yet in that regard; however, certain yardsticks for

ascertaining the seat of the arbitration can be elicited from the

decisions holding the field.

13. The primary tests, so derived, are as follows:

I. The language of the arbitration clause itself;

II. The intention of the parties, if ascertainable;

III. Whether there is any distinction between the applicable Curial

Law and Substantive Law, in other words, an assessment of the

subject-matter of the dispute versus the subject-matter of

arbitration.

14. In the present case, the arbitration clause is Clause 15 of the

Collection Agreement dated April 1, 2017, which is set out below:

"15. GOVERNING LAW AND DISPUTE RESOLUTION This Agreement shall be construed, interpreted and governed by the laws of India and the courts of Mumbai shall have an exclusive jurisdiction in all matters concerning this Agreement.

In the event of any dispute or difference, claims or disputes

arising between the parties regarding the interpretation, meaning and effect of any clause of this Agreement, or any of the rights/obligations of the parties hereunder it is agreed that such disputes shall be referred to and resolved through Arbitration of a Sole Arbitrator to be appointed by mutual consent of both parties and failing agreement on such Arbitrator's name, by an Arbitral Tribunal, consisting of nominee Arbitrator of both the parties and a third Arbitrator to be jointly appointed by both the Arbitrators. The Arbitration proceedings shall be conducted in accordance with the provisions of (Indian) Arbitration and Conciliation Act, 1996 or any amendments of re-enactments thereof, to the exclusion of all or any remedies available either to the RNLIC or to HISL and shall be held at Kolkata. The language of Arbitration shall be English and the award of Arbitrator shall be final and binding on the parties."

15. The first sentence connects the construction, interpretation and

applicable law for the agreement to "courts of Mumbai", which shall

have exclusive jurisdiction "in all matters concerning the agreement".

16. However, the very next part of the clause provides for arbitration in

the event of any dispute or claims, etc., arising between the parties,

not only regarding interpretation, meaning and effect of the clauses of

the agreement but also in respect of any of the rights/obligations of

the parties under the agreement.

17. It is further stipulated that the arbitration proceedings shall be

conducted to the exclusion of all or any remedy available to either of

the parties to the agreement and "shall be held" at Kolkata. Thus,

there is existence of overlapping and apparently irreconcilable limbs of

the clause.

18. A deeper scrutiny of the agreement, however, shows that the cause of

action for disputes regarding the agreement can arise in several parts

of India, in view of the nature of the collections, which has not been

restricted to physical collection and may be online or otherwise as

well, and since the parties have their respective offices in Kolkata and

Mumbai.

19. Thus, the parties were at liberty to choose one of the two places as the

seat of arbitration.

20. Certain features, however, can be gathered from the language of the

clause itself. Although Mumbai courts have been conferred exclusive

jurisdiction concerning the agreement, the arbitration proceeding has

been agreed to be held in its entirety at Kolkata, to the exclusion of all

other remedies of the parties. There is no indication in Clause 15

that the reference to Kolkata would be for one or several particular

meetings only but applies in general to the entire arbitration

proceeding itself.

21. Thus, it can fairly be construed that although exclusive jurisdiction

has been generally conferred on courts of Mumbai, arbitration has

been contemplated as the chosen mode of resolution to the exclusion

of all or any remedies (including those which can be instituted in

courts of Mumbai as per the prior part of the clause) and is

specifically designated to be held at Kolkata.

22. Thus, a comprehensive reading of the clause itself leaves no ambiguity

that there is no distinction between the 'venue' and 'seat' of

arbitration. Insofar as arbitration is concerned, the same shall be

exclusively held in Kolkata, irrespective of all other remedies available

to the parties.

23. Secondly, the earlier part of the arbitration clause contemplates

disputes in all matters, including construction, interpretation, etc.,

concerning the agreement to be governed by the laws of India.

Although the expression "exclusive jurisdiction" has apparently been

conferred on Mumbai courts, such conferment exclusively pertains to

the subject-matter of the dispute, as opposed to that of the

arbitration.

24. The moment the venue and seat of arbitration proceedings is fixed to

be Kolkata, the parties subject themselves to the provisions of the

Arbitration and Conciliation Act, 1996, including Sections 11 and 42

of the same.

25. At this premature stage, it would be pre-judging the relevant issues if

the entire conduct of the parties are required to be entered into. That

apart, sufficient material, independent of the agreement, is lacking to

gather the intention of parties at this premature stage of appointment

of Arbitrator within the extremely limited scope of Section 11(6A), read

in conjunction with sub-sections (4) to (6) of the said section.

26. Thus, the third yardstick, as discussed above, settles the issue to the

effect that the Curial Law for arbitration proceeding will be applicable

vis-à-vis Kolkata, whereas the Substantive Law would be of Mumbai.

The tricky part, however, is that both the said places are governed by

laws of India, which also has been stipulated to be the governing law

for the arbitration.

27. Hence, we cannot distinguish between the curial and substantive laws

applicable in Mumbai and Kolkata respectively, simply because no

such distinction exists. However, such line of distinction provides the

cue to determine that the subject-matter of the dispute has been

tagged with Mumbai by the arbitration clause, whereas the subject-

matter of arbitration has been clearly tied up with Kolkata.

28. Even in the judgment of the Supreme Court in Ravi Ranjan Developers

(supra), it has been indicated that the seat of the arbitration is to be

gathered from the arbitration clause and the agreement containing the

same.

29. Insofar as the cited decisions of the Supreme Court and various other

High Courts are concerned, it has been well-settled, as summed up in

BGS SGS Soma JV (supra), that where the parties have chosen the

seat, they have also chosen courts at the same seat for the purpose of

interim orders and challenges to the award.

30. Once the parties have subjected themselves to the provisions of the

1996 Act, the interplay of Sections 11 and 20 of the 1996 Act governs

the arbitration proceeding. In fact, the particular expression "to be

held in......" was also used in the relevant arbitration clause dealt with

in BGS SGS Soma JV (supra). Aptly, it was held by the Supreme Court

that the inexorable conclusion in such cases is that the stated venue

is actually the juridical seat of the arbitral proceeding.

31. In each of the cited cases, the language of the respective arbitration

clauses were different, which is, in fact, unavoidable since draftsmen

of agreements lend their own hue to the language of the agreements,

including arbitration clauses which, thus, come with different shades

of connotations.

32. For example, in the Division Bench judgment of the Bombay High

Court rendered in Aniket SA (supra), the courts of Hyderabad were

given exclusive jurisdiction to try disputes arising out of the

agreement, but subject to the provisions of Article 20.4 which, in turn,

provided that the seat of arbitration shall be Mumbai. Notably, no

similar clause subjecting the earlier part of the arbitration clause to

the latter is found in the case at hand.

33. Again, in Raman Deep (supra), the Delhi High Court proceeded on an

arbitration clause which clearly fixed the venue of the arbitration "for

the convenience" to be the office of the Company. Although the

jurisdiction of all disputes were to be Delhi only, the venue for

arbitration proceedings was to be at Faridabad, Haryana. Here,

however, the term "venue" has not been used at all. Instead, "shall be

held" is the chosen expression in the present case.

34. Again, in Mankastu Impex (supra), the arbitration clause stipulated

that courts at New Delhi shall have jurisdiction, whereas the second

sub-clause of the same clause stipulated that any dispute,

controversy, etc., were to be referred to and finally resolved by

arbitration "administered in Hong Kong".

35. Among the cases cited by the respondents, in CVS (supra), the Delhi

High Court was dealing with an arbitration clause that subjected any

dispute, suit, complaint, etc., arising out of or in relation to the

agreement to the exclusive jurisdiction of courts at Noida. The venue

of arbitration, however, was stipulated to be Noida/New Delhi, thereby

leaving the option of either of the two and/or both being chosen as the

venue(s).

36. However, the decision was rather clear-cut in the sense that the seat

of arbitration was chosen as Noida, which was also one of the options

given in the venues, which left a clear clue as to the courts which

would have jurisdiction in respect of the arbitral proceedings.

37. Again, in Virgo Softech Ltd (supra), the Delhi High Court had the

option between arbitration proceedings being held at New Delhi and

courts in Aurangabad (MS) having exclusive jurisdiction to try and

entertain any dispute arising therefrom. The court proceeded on such

premise and held that, since exclusive jurisdiction was conferred in

the courts of Aurangabad and New Delhi was merely the place/venue,

the High Court at Delhi would not have jurisdiction over the arbitral

proceedings.

38. Such decision cannot be said to be an exactly identical fit to the

present case, since in Clause 15 of the agreement at hand,

irrespective of the Mumbai courts having jurisdiction with regard to

the agreement, the arbitral proceedings were specifically stipulated to

be held at Kolkata. As such, even if the SLP was dismissed against

the said order of the Delhi High Court, the same cannot have a direct

bearing on the issue at hand in our case.

39. Insofar as the Ravi Ranjan Developers (supra) is concerned, the

general law was discussed, including the distinctions between "seat"

and "venue", as contrasted with the "place" of arbitration. Kolkata

was held to be only the venue for sitting of the arbitral tribunal, since

"sitting of the said Arbitral Tribunal" was to be at Kolkata. The

expression 'sitting' cannot exactly be equated to the unequivocal 'shall

be held' used in the present case.

40. Thus, each of the said decisions were rendered in their respective

contexts, in the light of the language of the arbitration clauses.

41. Insofar as the intention of the parties is concerned, there is no scope

of gathering the same at the stage of appointing of Arbitrator under

Section 11 of the 1996 Act.

42. Hence, applying all the relevant yardsticks, the seat of arbitration and,

consequently, the subject-matter of the arbitration, as opposed to that

of the disputes, has been fixed at Kolkata.

43. That apart, the 1996 Act, which is the specific Curial Law attracted in

cases of arbitration, was also chosen by the parties to be the

applicable law in exclusion of other remedies.

44. As such, following such Curial Law, Sections 11 and 20 of the 1996

Act, read conjointly, unerringly indicate that the Chief Justice of the

High Court at Calcutta or his designate has power and jurisdiction to

decide an application under Section 11 of the 1996 Act in the instant

case.

45. In such view of the matter, the objection regarding maintainability on

the ground of territorial jurisdiction, taken by the respondent, cannot

but be turned down.

46. Since the very existence of the arbitration clause is admitted and the

disputes arising between the parties fall squarely within the scope of

the arbitration clause in the concerned agreement, there cannot be

any further impediment in appointing an Arbitrator in the matter.

47. Accordingly, AP No.173 of 2023 is allowed, thereby appointing Justice

Madhumati Mitra, a former Judge of this Court, residing at "Pax",

BD-I, Street No. 107, Action Area 1, New Town, Kolkata - 700 156

(Mobile No. - 8910099797), as the sole Arbitrator to resolve the

disputes between the parties, subject to obtaining declaration/consent

from the proposed Arbitrator under Section 12 of the Arbitration and

Conciliation Act, 1996.

( Sabyasachi Bhattacharyya, J. )