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15. In view of the aforesaid clauses, it is submitted that the courts at Kolkata
have exclusive jurisdiction over the subject matter of the dispute and,
therefore, this Court qualifies as the "Court" within the meaning of Section
2(1)(e) of the Arbitration and Conciliation Act, 1996.
16. It is further submitted that, for appointment of the learned Arbitrator, the
Petitioner had approached this Court by filing Arbitration Petition No. 358
of 2022. By order dated 22.12.2022, this Court appointed a learned Sole
Arbitrator to adjudicate the disputes between the parties. The Respondent
participated in the arbitral proceedings pursuant to the said order and did
not raise any objection with regard to the territorial jurisdiction of this
Court at the relevant stage.
17. Learned Counsel for the Petitioner further submits that negotiations
between the parties took place at Kolkata, within the territorial jurisdiction
of this Court. The Respondent executed the agreement from Delhi, whereas
the authorised signatory of the Petitioner executed the same from Kolkata.
According to the Petitioner, the concluded contract thus came into
existence within the jurisdiction of this Court. Consequently, a part of the
cause of action has arisen within the territorial jurisdiction of this Court.
18. It is also submitted that the claim pending before the learned Arbitral
Tribunal is for a sum of Rs. 2,26,16,801/-. In view of the Notification dated
10.10.2013, this Court, being the Principal Civil Court of Ordinary Original
Jurisdiction, has exclusive pecuniary jurisdiction to entertain and
adjudicate disputes where the claim exceeds Rs. 1 crore. Additionally,
under the provisions of the Commercial Courts Act, 2015, this Court is
vested with exclusive pecuniary jurisdiction to deal with the present
matter.
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19. In order to substantiate the above arguments, the learned counsel for the
petitioner relies upon Bharat Aluminium Company Vs Kaiser
Aluminium technical Services reported as 2012 (9) SCC 552, Srei
Equipment Finance Ltd. Vs Seirra Infraventure Pvt. Ltd. reported as
2020 SCC Online Cal 1790, State of West Bengal Vs Associated
Contractors reported as 2015 (1) SCC 32, BGS SGS Soma JV v. NHPC
Ltd. reported as (2020) 4 SCC 234 and Indus Mobile Distribution Pvt.
Ltd. v. Datawind Innovations Pvt. Ltd. reported as (2017) 7 SCC 678.
20. In view of the above submissions, learned Counsel for the Petitioner
contends that this Court is the "Court" within the meaning of Section
2(1)(e) of the Arbitration and Conciliation Act, 1996, and consequently has
exclusive jurisdiction to entertain the present Petition and to extend the
mandate of the learned Arbitral Tribunal under Section 29A of the said
Act.
Legal Analysis on maintainability qua jurisdiction
21. This Court has given its anxious consideration to the rival submissions
advanced on behalf of the parties. The principal issue that arises for
determination is whether this Court possesses territorial jurisdiction to
entertain the present Petition under Section 29A of the Arbitration and
Conciliation Act, 1996.
22. The question of territorial jurisdiction in arbitral matters is no longer res
integra. In BGS SGS Soma JV (supra), the Hon'ble Supreme Court
authoritatively held that once a seat of arbitration is designated, the courts
of the seat alone would have exclusive jurisdiction over the arbitral
proceedings. The Supreme Court clarified that the "seat" constitutes the
juridical centre of arbitration and determines the court exercising
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supervisory jurisdiction in respect of applications under Sections 9, 11, 34
and 37 of the Act. The Court further held that even if part of the cause of
action arises elsewhere, such fact would not dilute the exclusive
jurisdiction of the courts at the seat.
23. The aforesaid principle had earlier been enunciated in Indus Mobile
(supra), wherein the Hon'ble Supreme Court held that the designation of a
seat of arbitration operates akin to an exclusive jurisdiction clause. It was
categorically observed that once the seat is determined, the courts at the
seat would alone have jurisdiction, even if no part of the cause of action
has arisen within such territorial limits.
24. Applying the aforesaid settled legal position to the facts of the present case,
Clauses 13.1 and 13.2 of the Facility Agreement dated 02.05.2019 assume
significance. Clause 13.2 expressly stipulates that the seat of arbitration
shall be Kolkata. Clause 13.1 further provides that the competent courts
at Kolkata shall have exclusive jurisdiction to adjudicate disputes arising
between the parties. Thus, not only have the parties designated Kolkata as
the seat of arbitration, but they have also incorporated an exclusive
jurisdiction clause in favour of the courts at Kolkata.
25. In view of the law laid down in BGS SGS Soma JV (supra) and Indus
Mobile (supra), the designation of Kolkata as the seat of arbitration by
itself confers exclusive supervisory jurisdiction upon the courts at Kolkata.
The additional existence of an exclusive jurisdiction clause fortifies this
conclusion.
26. The Respondent's reliance on judgments in Harji Engineering Works Pvt.
Ltd. (supra), Golden Edge Engineering Pvt. Ltd. (supra), Ravi Ranjan
Developers Pvt. Ltd. (supra), and Alchemist Ltd. (supra), does not
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advance its case. Those decisions turned on their own peculiar facts where
either no seat was designated, or the issue pertained to cause-of-action
jurisdiction in the absence of a clear and exclusive seat clause, or the
courts were examining jurisdiction under different factual matrices. None
of the said decisions dilute or depart from the ratio laid down in BGS SGS
Soma JV (supra) and Indus Mobile (Supra) regarding the primacy of the
juridical seat. In fact, the later judgments of the Hon'ble Supreme Court
have crystallized the principle that the seat is determinative of exclusive
jurisdiction.
27. Moreover, in the present case, the Petitioner had earlier approached this
Court under Section 11 of the Act for appointment of an arbitrator. By
order dated 22.12.2022, this Court appointed the learned Sole Arbitrator.
The Respondent participated in the proceedings pursuant thereto and did
not raise any objection as to territorial jurisdiction at that stage. While
jurisdiction cannot be conferred by consent, the Respondent's conduct
reinforces the conclusion that the parties understood and acted upon the
contractual stipulation designating Kolkata as the seat of arbitration.
28. The contention regarding absence of cause of action within the territorial
limits of this Court is therefore of no consequence once the seat has been
unequivocally fixed at Kolkata. The juridical seat, and not the situs of
negotiations or execution, is the determinative factor for supervisory
jurisdiction under Part I of the Act.
29. Insofar as pecuniary jurisdiction is concerned, the claim pending before
the learned Arbitral Tribunal is for a sum of Rs. 2,26,16,801/-, which
exceeds the statutory threshold of Rs. 1 crore. In view of the Notification
dated 10.10.2013 issued by this Court, read with the provisions of the
Commercial Courts Act, 2015, this Court, being the Principal Civil Court 2026:CHC-OS:80
of
Ordinary Original Jurisdiction exercising commercial jurisdiction, is vested
with exclusive pecuniary jurisdiction to entertain and adjudicate the
present matter.
30. The further objection of the Respondent that the arbitration agreement has
been forwarded to the Collector for adjudication of stamp duty and,
therefore, this Court cannot act upon the same at this stage, is
misconceived. The learned Arbitral Tribunal has not conclusively
determined the issue of stamp duty but has merely directed adjudication
in accordance with law. In any event, while exercising jurisdiction under
Section 29A of the Arbitration and Conciliation Act, 1996, this Court is
concerned only with the question whether extension of the mandate is
warranted and not with the merits of issues pending before the Tribunal.
Questions relating to stamping and admissibility of documents lie within
the domain of the Arbitral Tribunal and do not preclude this Court from
considering the present prayer for extension.
31. Having regard to (i) the designation of Kolkata as the seat of arbitration; (ii)
the existence of an exclusive jurisdiction clause in favour of courts at
Kolkata; (iii) the authoritative pronouncements of the Hon'ble Supreme
Court in BGS SGS Soma JV (supra) and Indus Mobile (supra); and (iv) the
pecuniary value of the dispute attracting the commercial jurisdiction of
this Court, this Court has no hesitation in holding that it is the "Court"
within the meaning of Section 2(1)(e) of the Arbitration and Conciliation
Act, 1996.
32. Consequently, this Court is vested with exclusive jurisdiction to entertain
the present Petition and to consider the prayer for extension of the
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mandate of the learned Arbitral Tribunal under Section 29A of the Act. The
preliminary objection raised by the Respondent as to territorial jurisdiction
is, accordingly, rejected.
Decision on Section 29
33. This court vide order dated 22.12.2022 appointed the Sole Arbitrator to
adjudicate the dispute between the parties. The Pleadings were completed
on 08.02.2023. With the consent of the parties, the mandate of the Arbitral
Tribunal was extended by 6 months till 08.08.2024. The matter is
presently at the evidence stage and the cross examination of the
Claimant's witness was going on.
34. Upon consideration of the record, this Court is satisfied that there has been
no undue or unwarranted delay attributable to the learned Sole Arbitrator
in conducting the proceedings. Having regard to the advance stage of the
arbitration proceedings and in the interest of justice, the mandate of the
Sole Arbitrator is extended for a further period of 6 months from today.
35. The learned Sole Arbitrator is requested to make all reasonable endeavours
to ensure that the arbitral proceedings are concluded and the award is
published within the extended period.
36. With the above observations, the present petition stands disposed of.
(Gaurang Kanth, J.)
SAKIL AMED (P.A)
