Delhi High Court
Mrs. Meenakshi Nehra Bhat & Anr. vs Wave Megacity Centre Private ... on 9 November, 2022
2022/DHC/004779
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 09th November 2022
+ ARB.P. 706/2020
MRS. MEENAKSHI NEHRA BHAT & ANR. ..... Petitioners
Through: Mr. Navdeep Singh, Advocate.
versus
WAVE MEGACITY CENTRE PRIVATE LIMITED ..... Respondent
Through: Mr. Aman Nandrajog with
Mr.Abhishek Lalwani, Advocate.
CORAM:
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
J U D G M E N T
ANUP JAIRAM BHAMBHANI J.
By way of the present petition under section 11(6) of the
Arbitration & Conciliation Act 1996 („A&C Act‟ for short), the
petitioners seek appointment of an arbitrator to adjudicate upon the
disputes that are stated to have arisen with the respondent from Retail
Space Allottees Arrangement dated 08.10.2014.
2. Mr. Navdeep Singh, learned counsel for the petitioners has drawn the
attention of this court to clause 13 of the agreement which comprises
the arbitration agreement between the parties; and contemplates
reference of disputes between them to arbitration in accordance with
the A&C Act.
3. Considering the somewhat discordant note in the arbitration clause
contained in the agreement, the provision is extracted herein-below
in-extenso:
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"13. ARBITRATION
All or any dispute arising out of or touching upon or in relation to
the terms of the Application Form/this Arrangement or its
termination, including the interpretation and validity thereof and the
respective rights and obligations of the parties shall be settled
amicably by mutual discussion failing which the same shall be
settled through Arbitration. The Arbitration proceedings shall be
governed by the Arbitration & Conciliation Act, 1996, or any
statutory amendments, modifications thereof the time being in force,
The Arbitration Proceedings shall be held at the Corporate Office
of the "Developer" alone in New Delhi by a Sole Arbitrator who
shall be appointed by the "Developer", or any person nominated by
it. The Allottee(s) hereby confirms that he shall have no objection to
this appointment, nor will they challenge the same on the ground
that Sole Arbitrator is Developer's nominee. However, the
"Developer" assures the Allottee(s) that such Arbitrator shall be
independent and impartial, who will not have any concern with the
outcome of the case or Award passed by the Sole Arbitrator. The
Arbitration proceeding shall be held at New Delhi and the Courts
at Gautam Budh Nagar, Uttar Pradesh shall, to the specific
exclusion of all other courts, alone have the exclusive jurisdiction
in all matters arising out of/or concerning the Application Form /
this Arrangement, regardless of the place of execution of this
Arrangement. This will be without prejudice to the territorial and
statutory jurisdiction of Allahabad High Court."
(emphasis supplied)
4. For completeness, it may be recorded that a separate clause 14, titled
'Applicable Laws and Jurisdiction' is also contained in the agreement,
which it is also necessary to notice, and which reads as follows :
APPLICABLE LAWS AND JURISDICTION
"All agreements between parties shall be construed, interpreted and
applied in accordance with and shall be governed by the Laws of
India".
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5. As per the record, the petitioners invoked arbitration vide Notice
dated 08.01.2020; to which the respondent sent reply dated
05.02.2020; whereafter further communications were also exchanged
between the parties.
6. Notice on this petition was issued on 04.12.2020; in response to
which the respondent filed reply dated 17.02.2021. Rejoinder dated
05.07.2021 to the reply has also been filed by the petitioners. Both
parties have also filed their written submissions in the matter to
supplement the oral arguments made.
7. While the principal contention raised by learned counsel for the
petitioners is that since the agreement contains an arbitration clause,
which clause specifies that arbitration proceedings are to be
conducted at a „venue‟ in New Delhi, therefore this court should
entertain, decide and allow the present petition.
8. On the other hand, the primary objection raised on behalf of the
respondent is that on a plain reading of the arbitration clause, the
present petition ought to have been filed before the Allahabad High
Court since the arbitration clause specifies that the Allahabad High
Court will have "territorial and statutory" jurisdiction over the
agreement; and therefore this court cannot exercise territorial
jurisdiction and ought not to entertain the present petition, in the first
place.
9. Mr Aman Nandrajog, learned counsel appearing for the respondent
submits, that though the arbitration clause states that the arbitration
proceedings " ... shall be held at New Delhi.", and even proceeds to
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specify the address at which such proceedings will be held, viz. " ... at
the Corporate Office of the "Developer" alone in New Delhi ..." that
merely indicates the geographical location for arbitration sittings, as
contemplated in section 20(3) of the A&C Act and nothing more. It is
submitted that there are clear contrary signifying indicia in this case,
since the arbitration agreement expressly designates that the courts at
Gautam Budh Nagar would have exclusive jurisdiction in all matters
arising out of the "Arrangement" regardless of the place where it may
have been executed; and further, that the general territorial and
statutory jurisdiction in relation to the transaction comprised in the
agreement is reserved for the Allahabad High Court. It is argued that
since a section 11 petition seeking appointment of an arbitrator
(where it is not an international commercial arbitration) can only be
filed before a High Court, it is the Allahabad High Court which would
have territorial jurisdiction in relation to this petition.
10. In support of his contention, Mr. Nandrajog has cited the following
precedents : BGS SGS Soma JV vs. NHPC Ltd.,1 Mankastu Impex
Pvt Ltd vs. Airvisual Ltd.,2 Virgo Softech Ltd. vs. National Institute
of Electronics and Information Technology, 3 ISGEC Heavy
Engineering Ltd. vs. Indian Oil Corporation Ltd.4, Cravants Media
Pvt. Ltd vs. Jharkhand State Co-operative Milk Producers
(2020) 4 SCC 234
(2020) 5 SCC 399
2022 SCC OnLine Del 2441
2021 SCC OnLine Del 4748
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Federation Ltd. & Anr.5 and Kush Raj Bhatia vs. M/s. DLF Power
And Services Ltd. 6
11. Rejoining to the objection so raised, Mr. Singh has urged that this
court would have territorial jurisdiction since by designating the
„venue‟ where arbitration proceedings are to be held, the parties have
also thereby designated the „seat‟ of arbitration, which would override
the general territorial jurisdiction, if any, vesting in the courts at
Gautam Budh Nagar or in the Allahabad High Court, in so far as
arbitration proceedings are concerned.
12. That apart, Mr. Singh also submits that payments in relation to the
transaction comprised in the arrangement were made from Delhi; and
the respondent's registered office is also situate at New Delhi. It is
contended that all the terms of the agreement should not be held
binding on the petitioners, since the petitioners were made to sign the
contract framed by the respondent company, with no bargaining
power nor any scope for discussion in the petitioners‟ hands.
13. In support of his contentions, Mr. Singh has cited the following
judgments: Cinepolis India Pvt Ltd vs. Celebration City Projects Pvt.
Ltd.,7 and Ireo Grace Realtech P Ltd vs. Abhishek Khanna8.
14. Upon a conspectus of the averments contained in the petition and in
the reply; and based upon the submissions made, in the opinion of this
court, the following inferences arise:
2021 SCC OnLine Del 5350
2022 SCC OnLine Del 3309
2020 SCC OnLine Del 301
(2021) 3 SCC 241
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14.1 The evident discordance in the arbitration clause as regards
territorial jurisdiction for purposes of arbitration and for
purposes of general civil proceedings, is resolved by de-
constructing the clause itself. It is noticed that nowhere in the
arbitration clause are the words „venue‟ or „seat‟ used at all.
What the parties have said, and agreed to in the arbitration
clause, is that the arbitration proceedings shall be „held‟ at the
corporate office of the respondent at New Delhi. The
agreement to hold arbitral proceedings at a given office is an
indication only of the location where such arbitration sittings
shall be conducted;
14.2 Though the arbitration clause could, no doubt, have been
worded with more clarity, the absence of neat wording does
not mean that the court can re-write the clause by inserting
words that do not exist in it, or by ignoring some other part of
it. In such circumstances, what the court must do, is to bear in
mind the legal distinction between „venue‟ and „seat‟ of
arbitration, and the further distinction with "territorial
jurisdiction" generally in relation to civil proceedings other
than arbitration, as settled by various precedents; and then
read the arbitration clause to give the clause its plain, simple
and straightforward meaning, while not effacing the territorial
jurisdiction clause contained in the same agreement;
14.3 Though, as noted above, multiple judicial precedents have
been cited by both sides, this court is persuaded to follow the
interpretation given to a very similarly worded arbitration
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clause in a recent decision of a Co-ordinate Bench of this court
in Kush Raj Bhati (supra), where the court was dealing with an
arbitration clause which read as follows :
"48. All or any dispute arising out of touching upon or in
relation to the terms of the Lease Deed including the inter-
pretation and validity of the terms thereof and the respective
rights and obligations of the parties shall be settled amica-
bly by mutual discussion failing which the same shall be set-
tled through arbitration. The arbitration shall be governed
by the Arbitration and Conciliation Act 1996 or any statuto-
ry amendments/modifications thereto for the time being in
force. The arbitration proceedings shall he held at an ap-
propriate location in New Delhi by a Sole Arbitrator who
shall be appointed by the Lessee and whose decision shall be
final and binding upon Lessor. The Lessor hereby confirms
that it shall have no objection to this appointment even if the
person so appointed, as the Arbitrator, is an employee or
Advocate of the Lessee or is otherwise connected to the Les-
see and the Lessor confirms that notwithstanding such rela-
tionship/connection, the Lessor shall have no doubts as to
the independence or impartiality of the said Arbitrator."
"49. That the Civil Courts at Gurgaon and High Court at
Chandigarh alone shall have jurisdiction."
(emphasis supplied)
In the above case, after referring to the extant legal posi-
tion, and in view of the contraindication in the agreement whe-
reby the „venue‟ of arbitration, viz. the place where the arbitra-
tion proceedings were agreed to be held, was New Delhi, but
the „seat‟ of arbitration would lie within the territorial jurisdic-
tion of the civil courts at Gurgaon and the High Court of Punjab
& Haryana at Chandigarh, the Co-ordinate Bench declined to
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entertain the arbitration petition for lack of territorial jurisdic-
tion.
14.4 The arbitration clause in the present case is similarly worded,
and therefore, in the opinion of this court, New Delhi is referred
to in that clause only as the location for conducting arbitral pro-
ceedings. However, from the jurisdictional perspective, the par-
ties have expressly agreed to territorial jurisdiction vesting in
the courts at Gautam Buddh Nagar, Uttar Pradesh and the Alla-
habad High Court, as may be applicable, depending on the pro-
ceedings in question.
15. Accordingly, it is held that this court does not have territorial
jurisdiction to entertain or decide the present petition.
16. The petition is accordingly dismissed for lack of territorial
jurisdiction, granting liberty to the parties to approach the courts of
competent jurisdiction in relation to the relief sought, in accordance
with law.
17. Other pending applications, if any, also stands disposed of.
ANUP JAIRAM BHAMBHANI, J
NOVEMBER 09, 2022/uj
Signature Not Verified
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By:NEERAJ
Signing Date:11.11.2022
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