Prime Meiden Ltd. vs Ramky Infrastructure Ltd.
2014 Latest Caselaw 6634 Del

$~33
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                            Judgement delivered on: 10.12.2014

+                       ARB.P. 622/2014
PRIME MEIDEN LTD                                      ..... Petitioner
                                 Through: Mr Mayank Bhugani, Adv.

                        versus

RAMKY INFRASTRUCTURE LTD              ..... Respondent

Through: Mr Atul Sharma & Mr Abhishek Sharma, Advs.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

RAJIV SHAKDHER, J

1. Issue notice.

2. Mr Sharma accepts notice on behalf of the respondent. He says that he does not wish to file a reply as there is a preliminary objection being raised on behalf of the respondent with regard to maintainability of the petition in this court.

3. The said statement made by Mr Sharma is taken on record.

4. This is a petition filed under Section 11 of the Arbitration & Conciliation Act, 1996 (in short the Act). The prayer made in the petition is for appointment of an arbitrator. The case of the petitioner is that, it was appointed as a sub-contractor by the respondent, qua a contract awarded to the respondent by the Karnataka Power Transmission Corporation Ltd.

(KPTCL). The contract awarded to the respondent by KPTCL, envisages execution of the work, which is, broadly, described as: Establishing, 2x100 MVA, 220/110/11KV and 1x10MVA, 110/11 KV, Substation, at Koppal (Halavarthi), in Koppal Taluk, Koppal District alongwith 220 KV and 110 KV lines, including supply of materials, erection (inclusive of civil works), testing, and commissioning (hereinafter referred to as the works in issue)

5. The contract, between the petitioner and the respondent, as averred, was entered into on 12.10.2012.

5.1 It is in respect of this contract that disputes, apparently, have erupted between the parties herein. It is stated that the disputes have arisen with regard to payments which the petitioner claims qua the work executed under the contract dated 12.10.2012.

5.2 The petitioner states that it dispatched a notice dated 15.09.2014, to the respondent, invoking arbitration. The petitioner also avers that, the said notice, was not replied to by the respondent, even though, the notice, adverted to the name of its chosen nominee.

5.3 It is in this background, the present petition has been filed.

6. Mr Sharma, who appears on behalf of the respondent, has raised, as indicated above, a preliminary objection, that this court would not have the territorial jurisdiction to entertain the present petition. In this behalf he has referred me to the agreement dated 12.10.2012.

7. Having heard the learned counsels for the parties, and perused the record, what emerges, is as follows:

(i) The first page of the agreement dated 12.10.2012 clearly states that: "This Agreement is made at Hyderabad on this 12th day of October 2012...";

(ii) The said agreement bears the signatures of the representatives of the

parties herein.

(iii) Concededly, the representative of the petitioner has executed the agreement dated 12.10.2012 at Delhi, whereas that of the respondent, has executed the agreement at Hyderabad;

(iv) The works in issue were executed at Karnataka;

(v) There is no dispute raised by the counsel for the petitioner, that the, agreement dated 12.10.2012, was stamped and notarized at Hyderabad;

(vi) The arbitration clause, i.e., clause 36(B)(v), states that the, place of arbitration shall be Hyderabad;

(vii) Clause 42 of the agreement dated 12.10.2012 reads as follows: "42. Jurisdiction: All disputes are subject to jurisdiction of Hyderabad (Andhra Pradesh) only....";

8. In these circumstances, according to me, while as contended by the petitioner a part of the cause of action may have arisen in Delhi, the other part of the cause of action has arisen in Hyderabad. The parties having agreed, in clause 42 of the agreement, that all disputes are subject to jurisdiction of Hyderabad (Andhra Pradesh) only, this court, will not have the necessary territorial jurisdiction.

8.1 In fact the Supreme Court in Swastik Gases Private Ltd. vs Indian Oil Corporation Ltd. (2013) 9 SCC 32 has observed that, in construing such jurisdiction clauses, the use of the words "only", "exclusively" or "alone", are unnecessary to ascertain the intention of parties. The relevant observations made in paragraphs 31 and 32 of the judgement rendered by Hon'ble Mr Justice R.M. Lodha (as he then was) and the concurring view taken by Hon'ble Mr Justice Madan B. Lokur, in paragraph 37, are extracted hereinbelow for the sake of convenience:

"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, 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 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......

......37. In my opinion, the very existence of the exclusion of jurisdiction clause in the agreement would be rendered meaningless were it not given its natural and plain meaning. The use of words like "only", "exclusively", "alone" and so on are not necessary to convey the intention of the parties in an exclusion of jurisdiction clause of an agreement. Therefore, I agree with the conclusion that jurisdiction in the subject matter of the proceedings vested, by agreement, only in the Courts in Kolkata....."

9. Learned counsel for the petitioner, however, has adverted to the following provision in clause 36 of the contract, which is extracted hereinafter for the sake of convenience:

"..... The arbitration award shall be final and conclusive and binding upon the Parties, and the Parties shall be entitled (but not obliged) to enter judgement thereon in any one or more of the highest courts having jurisdiction. The parties further agree (to the maximum extent possible and allowed to them) that such enforcement shall be subject to the provisions of the Arbitration and Conciliation Act, 1996 and neither party shall seek to resist the enforcement of any award in India on the basis that award is not subject to such provisions...."

9.1 Based on the above, learned counsel for the petitioner says that there is no exclusivity qua jurisdiction conferred on the courts at Hyderabad (Andhra Pradesh).

10. In my view, the said clause cannot help the cause of the petitioner, in as much as, all that the said clause says, is that, if an arbitration award is passed, it shall be final and binding upon parties, and that, the parties shall be entitled to enter judgement thereupon in any one or more of the highest

courts having jurisdiction, though with a caveat, that they would not be obliged to do so. This clause envisages a position, post the passing of the award, whereas presently, we are at the stage of appointment of an arbitrator.

10.1 Furthermore, as rightly contended by Mr Sharma, it also envisages a situation, that if the award gets converted into a decree, and in so far as its enforcement is concerned (after the award has morphed into a decree), they could perhaps approach the relevant courts.

10.2 In my opinion, all that the clause secures qua the parties, is that, they would have to approach the court where the assets are situated. This is a well established position. This aspect, as indicated above, will not render clause 42 of the contract inefficacious, whereby, parties have agreed that they would proceed to agitate their disputes "only" before courts located at Hyderabad (Andhra Pradesh).

11. The petition is, accordingly, dismissed.

RAJIV SHAKDHER, J DECEMBER 10, 2014 kk