The Supreme Court held that only the High Court having the jurisdiction over that place can entertain a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 for arbitration when parties agree upon a place is as the ‘venue’ of Arbitration.
Case:
A bench of the Justice R Banumathi and AS Bopanna set aside an order passed by the Madras High Court.
In the instant case, the appellant and the respondent in the case had entered into an agreement for sale of iron ore pellets; which were to be loaded from the Dhamra Port, Bhadrak in Odisha and off-loaded in Chennai, Tamil Nadu. On account of a dispute relating to pricing, the appellant did not deliver the goods to the respondent who in turn claimed damages.
The Respondent invoked Arbitration which as per Clause 18 of their agreement and had fixed the venue of arbitration at Bhubaneshwar. The Appellant did not agree to the appointment of the Arbitrator; which led to the Respondent moving the Madras High Court under Section 11(6) of the Arbitration and Conciliation Act for the appointment of the sole Arbitrator.
The Appellant opposed the jurisdiction of Madras High Court. However, the Madras High Court proceeded to appoint an Arbitrator in the matter; while holding that the decision of the seat of arbitration would not oust the jurisdiction of other Courts. The High Court also added that in the absence of a clause giving exclusive jurisdiction to a specific Court; both Orissa and Madras High Courts would have jurisdiction.
Decision
The Supreme Court, however, took a decision with the contradictory view from the decision of the Madras High Court; by stating that the 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. Considering the agreement of the parties having Bhubaneswar as the venue of Arbitration; the intention of the parties is to exclude all other Courts. It is not necessary to separately use the words like “exclusive jurisdiction”, “only”, “exclusive”, “alone” etc.
Therefore, setting aside the Madras High Court’s order, the Supreme Court granted liberty to the parties to approach the Orissa High Court with the plea.