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2008 DIGILAW 426 (UTT)

SHOBIT ENTERPRISES v. VIJAI ELECTRICALS LTD.

2008-09-17

V.K.GUPTA

body2008
JUDGMENT Hon’ble V.K. Gupta, C.J. In this petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the 1996 Act) for appointment of an Arbitrator, an objection has been raised by the respondents about the jurisdiction of this Court to entertain and decide this application. The objection is contained in para (4) of the counter affidavit filed on behalf of the respondents, affirmed on 29th March, 2008. Para (4) of the counter affidavit for ready reference is reproduced herein below which reads thus:- “4. That the contents of para no. 1 as stated are denied and in reply it is submitted that the contract agreement dated 29.10.2005 clearly speaks that any dispute and difference between the parties under this agreement shall lie in the jurisdiction of Hyderabad Court only and the present matter should have been filed in Hon’ble Andhra Pradesh High Court. It is therefore respectfully submitted by the deponent that the present matter is not maintainable before this Hon’ble Court and present matter is liable to be dismissed on this ground alone.” 2. Reference has been made to an agreement dated 29th October, 2005 having been executed between the parties in para (4) (supra). Clause 8 of this agreement relates to the jurisdiction of the Court. This clause reads thus:- “8. All dispute arising out of in any way connected with this agreement shall be deemed to have arisen in Hyderabad and only the court in Hyderabad, shall have jurisdiction to determine the same.” 3. It is an undisputed case of the parties that the agreement dated 29th October, 2005 was executed at Hyderabad. Since the agreement was executed at Hyderabad, undeniably a part of cause of action accrued at Hyderabad and, therefore, apart from other Courts, Hyderabad Courts also have jurisdiction in the matter. 4. It is well-established principle of law that the parties by agreement can confer jurisdiction upon a particular court, of course, subject to the condition that the court does not inherently lack jurisdiction. If jurisdiction is conferred upon a court by agreement of the parties, jurisdiction of any other court is excluded. In this case, therefore, even if Uttarakhand High Court had the jurisdiction in the matter but since the parties by agreement have conferred jurisdiction upon the Hyderabad Court, that Court alone will have the jurisdiction and the jurisdiction of Uttarakhand High Court has been excluded. 5. Mr. In this case, therefore, even if Uttarakhand High Court had the jurisdiction in the matter but since the parties by agreement have conferred jurisdiction upon the Hyderabad Court, that Court alone will have the jurisdiction and the jurisdiction of Uttarakhand High Court has been excluded. 5. Mr. Arvind Vashishth, learned counsel appearing for the petitioner submits that the arbitration agreement has to be read independently of the aforesaid jurisdiction exclusion clause because according to him both operate in different fields. I do not agree with the contention of Mr. Vashishth for the simple reason that even when there is in existence between the parties an arbitration agreement, this is always subject to the jurisdiction of a competent court. Which court would have the jurisdiction to deal with and decide the issue relating to arbitration would be a matter to be dealt with under the general law. Undoubtedly, only that court will deal with and decide the issue relating to arbitration which otherwise has jurisdiction. Section 2 (e) of the 1996 Act defines the Court. Section 2 (e) reads thus:- “2….. (e) “ Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;” 6. Coming specifically to the issue relating to the appointment of an arbitrator under Section 11 (6) of the 1996 Act, clause (b) of sub-section (12) of Section 11 itself co-relates the jurisdictional aspect with the power to appoint the arbitrator as far as the Chief Justice of a particular High Court is concerned. Coming specifically to the issue relating to the appointment of an arbitrator under Section 11 (6) of the 1996 Act, clause (b) of sub-section (12) of Section 11 itself co-relates the jurisdictional aspect with the power to appoint the arbitrator as far as the Chief Justice of a particular High Court is concerned. Clause (b) of sub-section (12) of Section 11 reads thus:- “(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of Section 2 is situate and, where the High Court itself is the Court referred to in that clause, to the Chief Justice of that High Court.” 7. Since in the present case the Court at Hyderabad has exclusive jurisdiction, I would refrain from exercising jurisdiction in the matter and dismiss the petition only on the ground of lack of jurisdiction as far as this Court is concerned but with liberty to the petitioner to present a fresh petition on the same cause of action in a court of competent jurisdiction.