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07 March 2022, Monday

3 years ago

Exclusive jurisdiction clause given primacy over seat clause: Delhi High Court

02 February 2022 | Hunch Circle (P) Ltd v. Futuretimes Technology India (P) Ltd | AP No 1019 of 2021 & connected petitions | C Hari Shankar J | Delhi High Court | 2022 SCC OnLine Del 361

The parties’ contract fixed the seat of arbitration at Delhi and the venue India. Another clause conferred exclusive jurisdiction over matters arising out of the agreement “especially for granting interim relief and enforcement of arbitral awards” on courts at the place where the main premises of the petitioner is located (which was Gurgaon).

Interpreting these clauses, the court ruled:

  1. Ordinarily, the courts at the seat have jurisdiction. But where a court is conferred exclusive jurisdiction regarding arbitral proceedings, the Section 11 petition would have to be filed in the High Court having jurisdiction over that place [citing Cars24 Services Pvt Ltd 2020 SCC OnLine Del 1720].
  2. Here, jurisdiction for Section 9 and Section 34 has been invested in Gurgaon courts. So, Section 11 jurisdiction would necessarily lie with the High Court of Punjab and Haryana, despite the seat at Delhi.
  3. Else, a piquant situation would arise in which Section 11 jurisdiction would be exercised by the Delhi High Court and Section 9, and Section 34 jurisdiction would be exercised by courts at Gurgaon. This would be discordant with Section 42 ACA.

The reader may note that in Cars24 Services, the seat was Delhi, but the appointing authority was a court at Haryana; so, the Delhi High Court enforced the clause and declined jurisdiction. See Arjun Sethi 2021 SCC OnLine Del 5343 (highlight here) and Orix Leasing Arb P. 637 of 2019, decided on 23 November 2021.

Read the judgment here.

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Categories: Appointment of Arbitrators | BGS Soma | Choice of Seat | Designation of Arbitral Seat | Exclusive Jurisdiction | Party Autonomy | Party Autonomy to Select Appointing Authority | Pathological Arbitration Clause | Place | Place of Arbitration | Seat | Seat of Arbitration | Section 11 ACA | Section 20 ACA | Tests for Determination of Seat | Venue | Venue of Arbitration

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