Kerala High Court
Bhagyasurya Engineers And Contractors ... vs Siemens Limited on 30 April, 2024
Author: T.R.Ravi
Bench: T.R.Ravi
AR.No.32 of 2023
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
TUESDAY, THE 30TH DAY OF APRIL 2024 / 10TH VAISAKHA, 1946
AR NO. 32 OF 2023
PETITIONER:
BHAGYASURYA ENGINEERS AND CONTRACTORS PRIVATE LIMITED
3RD FLOOR DEVAKI CASTLE, KALOOR, KOCHI, KERALA - 682017. REPRESENTE
BY ITS MANAGING DIRECTOR MR SUNIL KUMAR KP
BY ADVS.
MS. LIZA MEGHAN CYRIAC
JOLLY JOHN
RESPONDENTS:
1 SIEMENS LIMITED
BIRLA AURORA, LEVEL 21, PLOT NO. 1080, DR. ANNIE
BESANT ROAD, WORLI, MUMBAI 400 030 REPRESENTED BY ITS
MANAGING DIRECTOR MR. YOGESH KUMAR MASIWAL.
2 SIEMENS LIMITED-COCHIN OFFICE
KG OXFORD BUSINESS CENTER, NO. 39/4609, A, SREEKANDATH
ROAD, RAVIPURAM, ERNAKULAM 682016 REPRESENTED BY ITS
MANAGER MR SHARMA MANOJ KUMAR,
BY ADVS.
SRI AADITHYAN S.MANNALI
MS.PARVATHY KOTTOL(K/000654/2013)
THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON
24.01.2024, THE COURT ON 30.04.2024 DELIVERED THE FOLLOWING:
AR.No.32 of 2023
2
T.R. RAVI, J.
--------------------------------------------
AR.No.32 of 2023
--------------------------------------------
Dated this the 30th day of April, 2024
ORDER
Heard the counsel for the petitioner and counsel for the
respondents.
2. The petitioner has filed the arbitration request seeking
the appointment of an Arbitrator, invoking Section 11(5) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as
the Act). The respondent objects to the request on the ground
that as per the agreement between the parties, the seat of
Arbitration is at Mumbai. It is contended that this Court does not
have jurisdiction to consider an application under Section 11(5) of
the Act.
3. The respondents entered into an agreement with the
KSEB for the construction of Air Insulated Substations at Manjeri,
Chalakudy, Kothamangalam, and Chithirapuram. The respondents
thereafter floated enquiry to various subcontractors for
procurement and construction of civil works for the project.
Ext.P2 is the minutes of a meeting held on 9.7.2018 and
10.7.2018 between the officers of the petitioner and the
respondents. A reading of the minutes would show that the
minutes is not intended to be a confirmation of the order and that
the order will be decided only after another meeting which was
scheduled before 13.7.2018. It is also stated that the annexures
to the minutes are an integral part of the contract and that other
terms and conditions are based on the Standard Terms and
Conditions (STC) finally concluded, signed off, and attached as
reference. STC has been produced as Ext.P3. Serial No.32 of
Ext.P3 shows that the petitioner agreed to Arbitration at Mumbai.
It can be seen from Ext.P3 that wherever the petitioner wanted
modification to the STC, the same has been specifically stated.
With regard to Arbitration at Mumbai, all that is stated is
"agreed".
4. The respondent issued a purchase order for civil work
at Manjeri site from its Mumbai office on 25.7.2018 and for civil
work at Chalakudy site from its Mumbai office on 21.11.2018. The
copies of the purchase orders have been produced by the
respondents along with their counter affidavit as Exts.R1(c) and
R1(d). The General Terms and Conditions in the Purchase orders
specifically state that the current General Terms and Conditions
(GTC) will apply to the purchase orders and that the GTC can be
downloaded from the website. The petitioner accepted the
purchase orders and proceeded to carry out the work. The copy
of the GTC has been produced as Ext.R1(e) along with the
counter affidavit. Clause 25 of Ext.R1(e) deals with "Dispute
Resolution". It says that the seat of arbitration shall be Mumbai,
that the language to be used in Arbitration shall be English, and
that each party submits to the jurisdiction of the Courts of
Mumbai for the purposes only of compelling compliance with the
arbitration provisions and for enforcement of any arbitration
award made, in accordance with the provision.
5. The counsel for the petitioner relied on the judgment
of the Hon'ble Supreme Court in Ravi Ranjan Developers Pvt.
Ltd v. Aditya Kumar Chatterjee [2022 SCC Online SC 568]
to contend that an application under Section 11(6) cannot be
moved in any High Court in India irrespective of its territorial
jurisdiction and that the provision has to be harmoniously read
with Section 2(1)(e) of the Act. It is submitted that when
harmoniously read, the application has to be moved in a High
Court with supervisory jurisdiction. The counsel submits that the
subject matter of the case comes under the jurisdiction of the
High Court of Kerala and all elements pertaining to the cause of
action, have arisen in Kochi, and Ext.R1(a) has been signed at the
office of the respondents in Kochi. The petitioner contends that
there has been no agreement on an exclusive jurisdiction clause
and the agreement is only as to the place of meeting as provided
in Section 20(1) of the Act. It is also contended that if an
arbitration clause contained in GTC is to be read into the contract,
such incorporation should be as per Section 7(5) of the Act and
that there is no mention of arbitration in the purchase orders. It
is further contended that through incorporation by reference,
there cannot be an amendment of the arbitration clause already
existing. The counsel for the respondents, on the other hand
contends that the parties have agreed on a seat of arbitration
which is to be at Mumbai and hence an application under Section
11(5) is not maintainable before this Court.
6. This Court had occasion to consider the question
regarding seat of arbitration in the judgment in I.D.A.
Malappuram Branch through its Executive Committee v.
Indian Dental Association represented by its Hon'ble
Secretary [2024 SCC OnLine Ker 1358]. Paragraph 6 of the
above judgment is extracted for easy reference.
"6. In Brahmani River Pellets Limited v. Kamachi
Industries Limited reported in [(2020) 5 SCC 462], which
is a judgment referred to by either side, the Hon'ble
Supreme Court has dealt with the question of jurisdiction.
In paragraph 16 of the judgment, the Court has laid down
that where the contract specifies the jurisdiction of the
court at a particular place, only such court will have the
jurisdiction to deal with the matter and parties intended to
exclude all other courts. On facts, in the said case, it is
noted that the parties have agreed that the "venue"
of arbitration shall be at Bhubaneswar, and the court
found that the intention of the parties is to exclude all
other courts. The Court held that a non-use of words like,
"exclusive jurisdiction", "only", "exclusive" "alone" is not
decisive and does not make any material difference. In
the said case the Court found that since the "venue"
of arbitration was at Bhubaneswar, the Madras High Court
could not have assumed jurisdiction under Section 11(6)
of the Act. The Hon'ble Supreme Court has in the said
judgment referred to the judgment in Bharat Aluminium
Company v. Kaiser Aluminium Technical Service,
Inc. [(2012) 9 SCC 552], wherein the Court had
considered the distinction between the words
"seat" and "venue" in the context of Section 20(3). In the
said judgment the Hon'ble Supreme Court has held that
the hearing of the arbitration at the venue fixed by the
parties could not have the effect of changing
the seat of arbitration. In BBR (India) Private
Limited v. S.P. Singla Constructions Private Ltd. [(2023) 1
SCC 693 : AIR 2022 SC 2673], the Hon'ble Supreme
Court after referring to the previous decisions held that
the venue could not by itself assume the status of
'the seat', instead a venue could become 'the seat' only if
"something else is added to it as a concomitant". The
Court held that the place of the jurisdiction or
the seat must be certain and static and not vague or
changeable, as the parties should not be in doubt as to
the jurisdiction of the courts for availing of judicial
remedies. It was further held that where the seat is
designated in the agreement the courts of the seat alone
will have jurisdiction and all applications under Part I will
have to be made in the Court where the seat is located, as
that court alone will have jurisdiction over the arbitral
proceedings and all subsequent proceedings. A similar
view has been expressed by the Hon'ble Supreme Court
in Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar
Chatterjee [2022 SCC OnLine SC 568]. The above said
judgments have been followed by a learned Single Judge
of this Court in The Kerala Minerals and Metals
Ltd. v. GMM Pfaudler Ltd. [OP(C) No. 1254 of 2019, order
dated 8-7-2022 (Ker)]. The Calcutta High Court has in the
decision in Homevista Decor and Furnishing Pvt.
Ltd. v. Connect Residuary Private Limited [2023 SCC
OnLine Cal 1405], considered the question and after
referring to the decisions held that contractual
interpretation necessitates taking into consideration all
clauses and relevant factors to propound the proper
intention of the parties. The Court held that a clause
opting a place as 'venue' or 'place' read with another
clause which mentions courts of another location to have
jurisdiction over disputes that may arise, inhibits the
promotion of such 'venue' to 'seat'. The intention that
emerges from an aggregate understanding of such clause
is that the 'venue' or 'place' was to be a convenient
location for holding of arbitration seatings. The courts of
the place selected as having exclusive jurisdiction over
disputes should be considered as the 'seat' and having
jurisdiction to entertain applications under the Act. In Inox
Renewables Ltd. v. Jayesh Electricals Ltd. [(2023) 3 SCC
733], the Hon'ble Supreme Court considered the question
of "venue" and "seat". The Court relied on the decision of
the Hon'ble Supreme Court in BSG SGS Soma JV v. NHPC
Limited [(2020) 4 SCC 234], wherein it was held that,
where an agreement provides that arbitral proceedings
"shall be held" at a particular venue that would indicate
that the parties intended to anchor arbitral proceedings to
a particular place, signifying thereby, that that place is
the seat of arbitral proceedings."
7. Applying the legal position aforesaid to the facts of this
case, it is evident that in the Standard Terms and Conditions
(STC), the parties have agreed that Arbitration will be at Mumbai.
In the purchase order issued thereafter, it is specifically stated
that the current GTC will apply to the purchase order. The current
GTC in clause 25 says that the seat of arbitration will be Mumbai
and that the parties have agreed on the jurisdiction of the Court
of Mumbai. A reading of the STC, the Purchase Order and the
GTC, together, do not leave any doubt in the mind regarding the
intention of the parties to have arbitration at Mumbai. The
question of incorporation by reference does not arise in the case
since the STC which is relied on by the petitioner also shows that
parties have agreed to arbitration at Mumbai. The clauses in the
GTC only elaborate upon the term already agreed upon in the
STC.
8. In the result, the arbitration request is dismissed,
without prejudice to the right of the petitioner to approach the
appropriate forum for reliefs.
Sd/- Sd/-
T.R. RAVI
JUDGE
dsn
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF THE EMAIL COMMUNICATIONS
PERTAINING TO THE FINAL QUOTE DISCUSSIONS
BETWEEN THE PETITIONER AND RESPONDENTS
Exhibit P2 TRUE COPY OF THE SIGNED MINUTES OF THE
MEETING HELD AT KOCHI DATED 10.07.2018
BETWEEN THE PETITIONER AND RESPONDENTS
Exhibit P3 TRUE COPY OF THE SIGNED STANDARD TERMS AND
CONDITIONS IN KOCHI DATED 10.07.2018 BY THE
PETITIONER
Exhibit P4 NOTICE OF ARBITRATION ISSUED BY THE
PETITIONER TO THE RESPONDENT DATED
21.02.2022
Exhibit P5 FIRST REPLY OF THE RESPONDENTS DATED
29.03.2022 TO EXHIBIT P4
Exhibit P6 SECOND DETAILED REPLY OF THE RESPONDENTS
DATED 15.06.2022 TO EXHIBIT P4
RESPONDENT EXHIBITS
EXHIBIT R1(A) A COPY OF THE STANDARD TERMS AND CONDITIONS
EXHIBIT R1(B) A COPY OF THE MINUTES OF THE MEETING DATED
10TH JULY 2018
EXHIBIT R1(C) TRUE COPY OF THE PURCHASE ORDER DATED 25TH
JULY 2018 BEARING NO. 4508459618
EXHIBIT R1(D) PURCHASE ORDER DATED 21ST NOVEMBER 2018
BEARING NO. 4508719202
EXHIBIT R1(E) A TRUE COPY OF THE GENERAL CONDITIONS OF
CONTRACT
