Court Upon Which Exclusive Jurisdiction Has Been Conferred In Arbitral Matter Would Be Juridical Seat Of Arbitration: Delhi High Court
The Delhi High Court ruled that where exclusive jurisdiction has been conferred on a Court in respect of matters relating to arbitration, the same shall be construed to be a clear ‘contrary indicia’ and the said court, upon which exclusive jurisdiction has been conferred, would be the juridical seat of arbitration.
The High Court was considering a petition filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (A&C Act) seeking appointment of a Sole Arbitrator. The disputes between the parties had arisen in the context of a Delivery Services Agreement.
The Single-Judge Bench of Justice Sachin Datta asserted, “It is thus evident that the arbitration mechanism created under Clause 19 has been made, by the very same clause, to be subject to the exclusive jurisdiction of Courts in New Delhi.”
Advocate Naman Joshi represented the Petitioner while Advocate Sumit Roy represented the Respondent.
The matter at hand related to non-payment of the outstanding monetary entitlements of the petitioner under the said agreement. A notice invoking arbitration was sent by the petitioner wherein names of three persons were proposed, out of whom, any one could be appointed as a Sole Arbitrator to adjudicate the disputes between the parties. The Petition before the High Court was filed after the Parties could not agree upon the appointment of a Sole Arbitrator.
Referring to the Arbitration clause, the Bench noted that the choice of seat is not unequivocal and Gurgaon has been referred to as the venue/seat of arbitration.
It was further observed that although Clause 19 provided that the venue/seat of arbitration shall be Gurgaon, the very same clause made the arbitration subject to the exclusive jurisdiction of Courts in Delhi. The exclusive jurisdiction clause, in the light of the peculiar language of the clause, was not in the nature of a generic stipulation; rather, it was referable to the conduct of arbitration proceedings.
Further, referring to the judgments in Delhivery Ltd. v. Transkart Logistics Pvt. Ltd. & Anr. ARB.P. 167/2023; Hunch Circle Private Limited v. Futuretimes Technology India Pvt. Ltd. Arb. P. 1019/2021; Virgo Softech Ltd. v. National Institute of Electronics and Information Technology 2018 SCC OnLine Del 12722, the Bench said, “In some other judicial pronouncements as well, this Court has taken the view that where exclusive jurisdiction has been conferred on a Court in respect of matters relating to arbitration, the same shall be construed to be a clear ‘contrary indicia’ and that the said court, upon which exclusive jurisdiction has been conferred, would be the juridical seat of arbitration.”
As per the Bench, the High Court had the jurisdiction to entertain the present petition. Reliance was placed upon SBI General Insurance Co. Ltd. v. Krish Spinning 2024 SCC OnLine 1754 wherein it has been held that the scope of examination in proceedings under section 11 A&C Act is confined to ascertaining the ‘existence’ of the arbitration agreement. “Since the existence of the arbitration agreement is admitted in the present case, there is no impediment for this Court to constitute an Arbitral Tribunal to adjudicate the disputes between the parties”, it added.
Thus, appointing Justice (Retd.) Vinay Kumar Jain, as the Sole Arbitrator to adjudicate the disputes between the parties under the aforesaid agreements, the Bench clarified that Respondents shall be entitled to raise appropriate objections as regards jurisdiction/arbitrability, if any, before the sole arbitrator by filing an application under Section 16 of the A&C Act, 1996, which shall be duly considered by the sole arbitrator on merits.
Cause Title: Delhivery Limited V. Sterne India Private Limited [Neutral Citation: 2024:DHC:8824]
Appearance:
Petitioner: Advocates Naman Joshi & Guneet Sidhu
Respondent: Advocates Sumit Roy & Siddharth Mahajan