Delhi High Court
M/S Jsl Limited vs Xstrata Coal Queensland Pty. Ltd. on 19 January, 2010
Author: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: 9th December, 2009
Date of Order: January 19, 2010
CS(OS) No. 2335/2009
% 19.01.2010
M/s JSL Limited ... Plaintiff
Through: Mr. A.K.Ganguli, Sr. Advocate with
Mr. Rishi Maheshwari, Ms. Shally B. Maheshwari,
Ms. Megha Mukherjee & Ms. Priyanka, Advocates
Versus
Xstrata Coal Queensland Pty. Ltd. ... Defendant
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
ORDER
This suit has been filed by the plaintiff after declaration and
permanent injunction with following prayers:
(a) declare that Clause 12 of the contract dated 6th June, 2008 is invalid
as it was vitiated by fraud and misrepresentation of the fact by the
defendant that consequently is not binding on the plaintiff;
(b) declare that as a consequence, LCIA does not have jurisdiction to
deal with any dispute or difference whatsoever arising out of or in
relation to the contract dated 6th June, 2008 between the parties:
(c) declare that as a consequence, the courts in England do not have any
jurisdiction to deal with an/or adjudicate any dispute or difference
whatsoever arising out of or in relation to the contract dated 6th June,
2008 between the parties;
(d) declare that as a consequence, the contract dated 6th June, 2008
cannot be interpreted, construed or governed by the laws of England;
(e) declare that as a consequence, the nomination and appointment of
the sole arbitrator by LCIA is also invalid;
(f) declare that as a consequence, any action taken by the sole arbitrator
appointed by LCIA is also invalid;
(g) declare that there is no concluded contract between the parties in so
far as the balance quantity of 50,000 MT hard coking coal is
concerned as the events which were conditions precedent did not
occur;
(h) pass a permanent injunction restraining the Defendant from initiating
or taking any action in terms of the contract dated 6th June, 2008;
(i) pass a decree of permanent injunction restraining the Defendant and
its agents, from continuing with or taking any further action to the
arbitration initiated by the Defendant under the LCIA
2. After perusal of the agreement relied upon by the plaintiff this
Court had doubt about the maintainability of the suit in India and heard
arguments on the issues of jurisdiction and maintainability.
3. It is submitted by the Counsel for the petitioner that Article 12 of
the contract entered into between the parties on 6th June, 2008 ( date at the end
of the agreement is 8.7.2008) was vitiated by fraud since the respondent had not
disclosed about its interest in England. England was chosen as a neutral country
by both the parties on the assurance given by the respondent that it had no
business interest in England. However, later on it was revealed that respondent
had business interests in England and therefore Article 12 of the Agreement was
vitiated by fraud and this Court will have jurisdiction.
4. Article 12 of the Agreement reads as under:
ARTICLE 12
DISPUTE AND ARBITRATION
12.1 This agreement shall be interpreted, construed and
governed by the Laws of England. Any suit or proceedings arising
out of this Agreement shall be instituted in law courts in England.
12.2 Except as otherwise provided in this Agreement, if any
dispute or difference of any kind whatsoever (a "Dispute") shall
arise between Buyer and Seller in connection with or arising out of
or relating to this agreement or the breach, termination or validity
hereof Buyer and Seller shall attempt in good faith for a period of
thirty (30) days after the receipt by one Party of a notice from the
either Party of the existence of the Dispute, to settle such Dispute
in the first instance by mutual discussions between the Parties.
12.3 If the Dispute cannot be settled within thirty (30) days by
mutual discussion the Dispute shall be referred to and finally
resolved by arbitration under the Rules of the London Court of
International Arbitration which Rules are deemed to be
incorporated by reference to this article. The number of arbitrator
shall be one to be mutually selected by both parties. The seat or
legal place of arbitration shall be London. The is to be used in the
arbitration shall be English.
12.4 Continuation of Obligations. During the pendency of any
arbitration the Parties shall continue to perform their respective
obligations hereunder.
5. The above Article makes it abundantly clear that only the Courts in
England would have jurisdiction and Laws of England would apply to the contract
and any suit or proceedings arising out of the agreement are to be instituted in
the Courts in England. The plea taken by the plaintiff about the assurance given
by respondent in respect of neutral venue is not tenable. One, the plaintiff has
failed to place on record any written assurance which was given by the defendant
to the plaintiff regarding England being a neutral country and second because of
Article 19 of the agreement which reads as under:
ARTICLE 19
ENTIRE AGREEMENT
19.01 This Agreement contains the entire Agreement and
understanding between the Parties as to the subject matter of the
Agreement and merges and supersedes all prior Agreements,
commitments, representations, writing and discussions between
them. Neither of the Parties will be bound by any other prior
obligations, conditions, warranties, of representations with respect
to the subject matter of this Agreement.
6. The plaintiff with open eyes signed this agreement which
contained the above Articles 12&19 and Article 19 makes it clear that all previous
understandings between the parties as to the subject matter of agreement shall
have no effect and the agreement contained the entire understanding between
the parties. Thus, there was no scope of playing fraud upon the plaintiff
regarding Article 12. The suit is not maintainable in this Court and is liable to be
dismissed and is hereby dismissed.
January 19, 2010 SHIV NARAYAN DHINGRA, J.
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