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Rajasthan High Court · body

2019 DIGILAW 614 (RAJ)

Ashish Agrawal, Director, Samarth Automotives Pvt Ltd. v. Chairman And Managing Director, Honda Motorcycle And Scooter India Private Limited

2019-02-20

ARUN BHANSALI

body2019
JUDGMENT Arun Bhansali, J. - This application under Section 11 (5) of the Arbitration and Conciliation Act, 1996 ('the Act, 1996') has been filed by the applicant seeking appointment of sole arbitrator for resolution of dispute between the applicant and the respondent company. 2. It is inter alia indicated in the application that vide dealership agreement dated 10/11/2012 entered into between the respondent company and the applicant, the applicant was appointed/authorized as dealer to sell the products of the company and provide after sale service to the two wheelers from its showroom and workshop at Udaipur. 3. By e-mail dated 15/11/2016, the applicant resigned from the authorized dealership of the respondent company and sought help in disposing of the pending stock of vehicles, parts and accessories and compensate the applicant for the loss it incurred. 4. When no response to the claim of help and compensation was received, a notice dated 21/3/2017 (Annex.3) was issued through the counsel to the respondent company invoking clause 29 of the dealership agreement dated 10/11/2012 and suggested appointment of Shri A.L.Gupta as its arbitrator. 5. It is claimed in the application that despite delivery of the registered notice, neither the notice has been replied nor arbitrator in terms of clause 29 of the agreement has been appointed and, therefore, a sole arbitrator be appointed. 6. Notice of the application was issued to the sole respondent, which was ordered to be sent by ordinary process as well as by registered post AD. The notice sent through the regular process has been duly served on the respondent, however, none has put in appearance on behalf of the respondent. 7. Learned counsel for the applicant made submissions that from clause 29 of the dealership agreement dated 10/11/2012 (Annex.1) it is apparent that there is an arbitration agreement between the parties and on dispute having arisen, notice was issued seeking appointment of arbitrator, which has not been responded to and even pursuant to the notice issued by this Court none has put in appearance for the respondent, therefore, the application be allowed and sole arbitrator be appointed. 8. During the course of submissions, looking to the nature of arbitration agreement and the jurisdiction indicated therein, learned counsel for the applicant was heard on the maintainability of the application before the Court at Jodhpur. 9. 8. During the course of submissions, looking to the nature of arbitration agreement and the jurisdiction indicated therein, learned counsel for the applicant was heard on the maintainability of the application before the Court at Jodhpur. 9. Learned counsel for the applicant, with reference to the judgment in Universal Construction and Trading Company vs. Garhwal Mandal Vikas Nigam Ltd., 2004 AIR(All) 115 submitted that the application was maintainable at Jodhpur. 10. I have considered the submissions made by learned counsel for the applicant and have perused the material available on record. 11. A perusal of the dealership agreement dated 10/11/2012 indicates that the agreement was made and entered into at Manesar, District Gurgaon (Haryana) by and between Honda Motorcycle & Scooter India Pvt. Ltd. and Samarth Automotives Pvt. Ltd. Clause 29 of the arbitration agreement relied on by the applicant reads as under: "29. Arbitration & Jurisdiction 29.1 Each party shall in good faith perform this Agreement based on confidence placed by one party in the other and relied upon by such party. Any dispute, controversy or claim, arising out of or relating to this Agreement, or the breach, termination or validity thereof shall be settled by arbitration under the Arbitration and Conciliation Act, 1996, subject to any statutory modification thereto. 29.2 The Award of the Arbitrators shall be final and binding upon the parties and the Award shall include allocation of the cost of the arbitration proceedings. 29.3 The seat of arbitration shall be Gurgaon. 29.4 For all purposes in relation to this agreement, the courts at Gurgaon alone shall have exclusive jurisdiction. No other Courts shall have jurisdiction to deal with any dispute or any matter between the parties arising out of this Agreement." 12. A perusal of the above clause would reveal that the parties agreed that the seat of the arbitration shall be at Gurgaon and that the Courts at Gurgaon alone shall have the exclusive jurisdiction to deal with any dispute or any matter between the parties arising out of the agreement. 13. A perusal of the above clause would reveal that the parties agreed that the seat of the arbitration shall be at Gurgaon and that the Courts at Gurgaon alone shall have the exclusive jurisdiction to deal with any dispute or any matter between the parties arising out of the agreement. 13. Section 11 (12) (b) of the Act, 1996 reads as under: "(b) where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other arbitration, the reference to "the Supreme Court or, as the case may be, the High Court" in those sub-sections shall be construed as a reference to 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 that High Court." 14. Further, provisions of Section 2(1)(e)(i) of the Act, 1996, which is relevant for the present case, read as under: "(e) "Court" means - (i) in the case of an arbitration other than international commercial arbitration, 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;" 15. A bare perusal of the above provisions would reveal that subclause (b) of clause 12 of Section 11 provides that High Court in sub-sections (4), (5), (6), (7), (8) and (10) is the High Court within those local limits the principal Civil Court referred to in clause (e) of sub-section (1) of Section (2) is situate and clause (i) of sub-clause (e) of sub-section (1) of Section (2) defines the Court means the principal Civil Court of original jurisdiction having jurisdiction to decide the question forming subject-matter of the arbitration, if the same had been the subject-matter of a suit. 16. In the present case, admittedly, the agreement was entered into between the parties at Manesar, District Gurgaon and the dealership was operated at Udaipur. 16. In the present case, admittedly, the agreement was entered into between the parties at Manesar, District Gurgaon and the dealership was operated at Udaipur. By notice sent through e-mail (Annex.2) addressed to respondent company the applicant resigned from the authorized dealership and, whereafter, the notice sent through the counsel of the applicant, was delivered to the respondent at Gurgaon. 17. From the above facts, a part cause of action can be claimed to have arisen within the territorial jurisdiction of the courts both at Gurgaon (Haryana) and Udaipur (Rajasthan). However, it is well settled that the parties may agree to confer exclusive jurisdiction on a court in case part cause of action arises within the jurisdiction of more than one court (see A.B.C.Laminart Pvt. Ltd. vs. A.P. Agencies, 1989 AIR(SC) 1239 ). 18. Admittedly, in the clause pertaining to arbitration and jurisdiction, the applicant and respondent company have agreed that the courts at Gurgaon alone shall have the exclusive jurisdiction and no other court shall have jurisdiction to deal with any dispute or any matter between the parties arising out of the agreement. The said stipulation in the agreement clearly confers exclusive jurisdiction on the courts at Gurgaon and in turn under Section 11 of the Act as per specific stipulation indicated in Section 11 (12) (b) only Punjab & Haryana High Court would have jurisdiction under the said section to deal with the application seeking appointment of sole arbitrator. 19. So far as the reliance placed on the judgment in Universal Construction & Trading Co. (supra) is concerned, in the said case it was specifically noticed by the Allahabad High Court that the agreement between the parties therein did not contain any jurisdiction clause and that there was no clause excluding the jurisdiction of any court and as such in view of specific stipulation in clause 29 in the present case, the said judgment has no application to the facts of the present case. 20. In view of the exclusive jurisdiction clause in the agreement entered into between the parties conferring exclusive jurisdiction on courts at Gurgaon (Haryana) and in turn on Punjab & Haryana High court, the present application under Section 11 of the Act cannot be entertained by this Court for lack of territorial jurisdiction. 21. Consequently, the application is dismissed leaving it open to the applicant to approach appropriate court. 22. 21. Consequently, the application is dismissed leaving it open to the applicant to approach appropriate court. 22. No order as to costs.