Delhi High Court
Cravants Media Private Limited vs Jharkhand State Co Operative Milk ... on 6 December, 2021
$~11(2021)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 06.12.2021
+ ARB.P. 915/2021
CRAVANTS MEDIA PRIVATE LIMITED ..... Petitioner
Through Mr. Nitin Jain, Mr. Vishal
Chauhan,Mr. Rajesh Kumar,
Mr. K.P. Singh & Mr. Akshay
Mittal, Advs.
Versus
JHARKHAND STATE CO OPERATIVE MILK
PRODUCERS FEDERATION LTD
AND ANR ..... Respondents
Through Mr. Arvind Gupta, Adv.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
VIBHU BAKHRU, J. (ORAL)
1. The petitioner has filed the present petition under Section 11 of
the Arbitration & Conciliation Act, 1996 (hereafter the 'A&C Act'),
inter alia, praying that an arbitrator be appointed to adjudicate the
disputes that have arisen between the parties in connection with the
Agreement dated 15.01.2018.
2. Respondent no.1 had floated a tender for availing media
services relating to media support. Subsequently, on 28.11.2017, a
Work Order [Work Order bearing No. JMF/171/2017] was issued by
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the respondents in favour of the petitioner and the petitioner was
appointed as the media agency to handle the brand buildings, creative
developments and creative disseminations for a period of one year
with effect from 01.12.2017. Thereafter, on 15.01.2018, the parties
entered into a formal agreement captioned 'Service Agreement'
(hereafter referred to as 'the Agreement'). The Agreement includes an
Arbitration Clause that reads as under:
"16. Dispute Resolution and Governing Law
16.1 In case of any issue, dispute, controversy or claim
between the Parties to the Agreement wherein
Parties disagree on the interpretation of the other
Party arising out of this Agreement, or any other
document or, invalidity or termination Agreement
executed in connection with this Agreement
including the breach thereof, the issue will be
first re referred to the senior management of both
the Parties for resolution who shall act as the
negotiators/mediators and shall use all reasonable
endeavors to negotiate with a view to resolving
the dispute amicably. If the issue remains
unresolved even after thirty (30) days after
reference, the dispute would then be dealt with in
accordance with Chaise 16.2.
16.2 The arbitration of any dispute, controversy or
charm shall be conducted by a single arbitrator
selected by the Parties in accordance with the
rules of the Indian Arbitration & Conciliation
Act, 1996. The language of the arbitration shall
be English. The venue of arbitration shall be
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Ranchi. The cost of arbitration will be borne by
the both Parties as directed by the arbitrator.
16.3 The Parties acknowledge that the immediate
remedies at law may be sometimes inadequate,
the Parties shall therefore be entitled to seek
additional injunctive relief in the event of any
material breach of this Agreement.
16.4 All remedies available to other Party under this
Agreement are cumulative and may be exercised
concurrently or separately, the exercise of any
one remedy will not be deemed an election of
such remedy to the exclusion of other remedies;
and the rights and remedies of the parties as set
forth in this Agreement are not exclusive and are
in addition to any other rights and remedies
available to it at law or in equity.
16.5 This Agreement shall be interpreted and governed
by the laws of India without regard to conflict of
law provisions and any disputes arising out of this
Agreement shall be subject to the sole and
exclusive jurisdiction of courts of Delhi."
3. The respondents do not dispute that the parties had entered
into the said agreement or that the petitioner had invoked the
Arbitration Clause (Clause 16 of the Agreement). However, the
respondents have opposed the present petition on the ground that it is
not maintainable as this Court does not have the jurisdiction to
entertain the present petition.
4. Mr. Gupta, learned counsel appearing for the respondent relies
on the decision of the Supreme Court in Bharat Aluminium Company
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& Ors. v. Kaiser Aluminium Technical Services & Ors.: (2012) 9
SCC 552, in support of his contention that since the parties had agreed
that Ranchi would be the place of arbitration, the High Court of
Jharkhand would have the exclusive jurisdiction to entertain the
present petition. He also referred to the decision of the Supreme Court
in BGS SGS Soma v. NHPC Ltd.: (2020) 4 SCC 234 and drew the
attention of this Court to paragraph no. 82 of the said decision.
5. Mr. Jain, learned counsel appearing for the petitioner countered
the aforesaid submission. He referred to the decision of a Coordinate
Bench of this Court in Isgec Heavy Engineering Ltd. v. Indian Oil
Corporation Ltd. & Anr.: Arb.P 164 of 2021, decided on
21.10.2021 and contended that a plain reading of the said Arbitration
Clause indicates that the parties had agreed that the venue of
arbitration would be Ranchi, however, the Courts at Delhi would have
the exclusive jurisdiction in respect of all matters relating to the
Agreement and resolution of disputes. He submits that the language
of Clause 16.2 of the Agreement is clear and does not refer to the seat
of arbitration but only the venue for holding arbitration proceedings.
6. The Supreme Court has in several decisions has carved out the
distinction between the venue of arbitration and the seat of arbitration.
In BGS SGS Soma Vs. NHPC Ltd. (supra), the Supreme Court had
highlighted that where the parties have agreed to a place of arbitration,
it is apparent that they have also agreed that the concerned courts
having territorial jurisdiction where the arbitral proceedings are held,
will have the jurisdiction in respect of the arbitral proceedings.
7. Paragraph 82 of the said decision reads as under:
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"82. On a conspectus of the aforesaid judgments, it may
be concluded that whenever there is the designation of a
place of arbitration in an arbitration clause as being the
"venue" of the arbitration proceedings, the expression
"arbitration proceedings" would make it clear that the
"venue" is really the "seat" of the arbitral proceedings,
as the aforesaid expression does not include just one or
more individual or particular hearing, but the arbitration
proceedings as a whole, including the making of an
award at that place. This language has to be contrasted
with language such as "tribunals are to meet or have
witnesses, experts or the parties" where only hearings
are to take place in the "venue", which may lead to the
conclusion, other things being equal, that the venue so
stated is not the "seat" of arbitral proceedings, but only
a convenient place of meeting. Further, the fact that the
arbitral proceedings "shall be held" at a particular venue
would also indicate that the parties intended to anchor
arbitral proceedings to a particular place, signifying
thereby, that that place is the seat of the arbitral
proceedings. This, coupled with there being no other
significant contrary indicia that the stated venue is
merely a "venue" and not the "seat" of the arbitral
proceedings, would then conclusively show that such a
clause designates a "seat" of the arbitral proceedings. In
an international context, if a supranational body of rules
is to govern the arbitration, this would further be an
indicia that "the venue", so stated, would be the seat of
the arbitral proceedings. In a national context, this
would be replaced by the Arbitration Act, 1996 as
applying to the "stated venue", which then becomes the
"seat" for the purposes of arbitration."
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8. There is no cavil that if arbitration clause indicates a place
where the arbitral proceedings are to be held, it must be assumed that
the parties have agreed that the courts exercising jurisdiction in respect
of that place would also have jurisdiction in relation to the disputes
between the parties. However, that does not in any manner disable the
parties from agreeing to a venue where the arbitral proceedings would
be held but at the same time agreeing that the seat of arbitration would
be in another location. In the aforesaid context, the Supreme Court had
also specified that the venue of arbitration would be accepted as the
place of arbitration in absence of any contrary indicia.
9. In Cinepolis India Pvt. Ltd. v. Celebration City Projects Pvt.
Ltd. & Anr.: (2020) 2 ArbLR 355 (Del), this Court dealt with the
controversy regarding an Arbitration Clause which provided that the
"place" of arbitration shall be New Delhi. However, one of the sub-
clauses provided that the courts in Ghaziabad would have 'exclusive
jurisdiction' on the subject matter of the agreement in question. This
Court following the decision of the Constitution Bench of the Supreme
Court in Bharat Aluminum Company & Ors. v. Kaiser Aluminum
Technical Services & Ors. (supra) and Indus Mobile Distribution
Pvt. Ltd. v. Datawind Innovations Pvt. Ltd. & Ors.: (2017) 7 SCC
678, rejected the contention that it would not have the jurisdiction to
entertain the petition.
10. Paragraph 31 of the said decision reads as under:
"31. What emerges therefore by reading of the various
judgments referred to above is that it is really the seat
of arbitration which is akin to an exclusive jurisdiction
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clause. Where there are no contrary provisions in the
agreement, the place would be the juridical seat which
would determine the territorial jurisdiction of a Court.
Where the words in the arbitration clause are neither
seat nor place and the arbitration clause only refers to
words such as 'venue' or "held in" the intent of the
parties would have to be seen from the agreement. If
the parties intend that the arbitration proceedings are to
be held as a whole at that particular venue then the
venue also becomes a juridical seat. It is also clear
from the now well settled law that it is the seat or the
juridical seat which will be the guiding factor for a
Court to determine its jurisdiction while examining a
petition under Section 11 of the Act."
11. The question whether the intention of the parties in specifying a
location for arbitral proceedings is merely to fix a convenient 'venue'
or a seat/place of arbitration has to be ascertained from the language of
the arbitration agreement.
12. In the present case, Clause 16.5 of the Agreement expressly
provides that if any disputes arise out of the Agreement, the same
would be subject to the sole and exclusive jurisdiction of the Courts at
Delhi. It is also necessary to note that Clause 16.5 is part of Article 16
of the Agreement, which is captioned "Disputes Resolution and
Governing Law'. Thus, Clause 16.2 and 16.5 of the Agreement are
required to be read together to ascertain the intention of the parties.
13. Clause 16.2 of the Agreement uses the word "venue". This
clearly indicates that the parties had agreed that the venue of the
arbitration shall be Ranchi and not the place of arbitration. It is clear
from a conjoint reading of the two clauses (Clause 16.2 and 16.5 of
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the Agreement) that the parties had agreed that the venue of arbitration
would be Ranchi but the court at Delhi would have the exclusive
jurisdiction. Thus, Ranchi must be considered only as the venue of
arbitration and not the place or seat of arbitration.
14. In Isgec Heavy Engineering Ltd. v. Indian Oil Corporation
Ltd. & Anr. (supra), a Coordinate Bench of this Court had interpreted
a similar clause where the parties had agreed that the venue of
arbitration shall be New Delhi. However, in another clause the parties
had agreed that all actions and proceedings arising out of or related to
the contract shall lie only in the courts of competent jurisdiction at
Guwahati. In the aforesaid context, the Court held that the clause of
the agreement in question, which expressly provides that Courts at
Guwahati would have exclusive jurisdiction was the contrary indicator
within the exception as held by the Supreme Court in BGS SGS Soma
v. NHPC Ltd. (supra).
15. On a plain reading of Article 16 of the Agreement, it is apparent
that the parties had agreed that the venue of the arbitration would be
Ranchi. However, that does not lead to the conclusion that the
arbitration would be seated at Ranchi.
16. This Court is unable to accept that Clause 16.5 is only restricted
to civil proceedings other than arbitration. The placement of the
Clause 16.5 in Article 16 of the Agreement, which relates to "Dispute
Resolution", indicates to the contrary.
17. In view of the above, the contention that this Court does not
have jurisdiction to entertain the present petition is rejected.
18. Since there is no dispute as to the existence of an arbitration
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agreement and that the petitioner has invoked the same, this Court
considers it apposite to allow the present petition.
19. Accordingly, Mr. H.S. Sharma, (Retired) District & Sessions
Judge (Mobile No. 9910384647) is appointed as the Sole Arbitrator to
adjudicate the disputes between the parties. This is subject to the
learned Arbitrator furnishing his consent; making the necessary
disclosure under Section 12(1) of the A&C Act; and not being
ineligible under Section 12(5) of the A&C Act.
20. It is further directed, with the consent and at the instance of the
parties, that the arbitration be conducted under the aegis of Delhi
International Arbitration Centre (DIAC) and in accordance with its
Rules.
21. The parties are at liberty to approach the Coordinator, DIAC for
further proceedings.
22. The petition is disposed of in the aforesaid terms.
VIBHU BAKHRU, J
DECEMBER 6, 2021
'gsr'
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