Case Note & Summary
The petitioner, M/s. Roman Tarmat Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking an injunction restraining the respondent, M/s. (Indukuru Venku Reddy Constructions) IVRCL, from utilizing an amount of Rs.14,59,19,989/- received from encashment of a bank guarantee, and for a direction to deposit the amount in court. The respondent raised a preliminary objection regarding the territorial jurisdiction of the Bombay High Court. The contract between the parties was a Piece Rate Work Contract executed on 16th June 2010 at Chennai, for construction of automotive test tracks at GARC, Chennai. The work was to be executed at Chennai. The arbitration clause provided that the venue of arbitration shall be Chennai. The court considered the preliminary objection and held that no part of the cause of action arose within the territorial jurisdiction of the Bombay High Court. The contract was executed at Chennai, the work was performed at Chennai, the bank guarantee was invoked at Chennai, and the arbitration venue is Chennai. The mere fact that the respondent has an office in Mumbai does not confer jurisdiction. The court dismissed the petition for lack of territorial jurisdiction, leaving the petitioner to seek remedies before the appropriate court at Chennai.
Headnote
A) Arbitration - Territorial Jurisdiction - Section 9 of the Arbitration and Conciliation Act, 1996 - Cause of Action - The court held that for a petition under Section 9, the court must have jurisdiction where the cause of action arises. In this case, the contract was executed at Chennai, the work was performed at Chennai, the bank guarantee was invoked at Chennai, and the arbitration venue is Chennai. No part of cause of action arose within the territorial jurisdiction of the Bombay High Court. The mere fact that the respondent has an office in Mumbai does not confer jurisdiction. (Paras 1-10) B) Arbitration - Venue of Arbitration - Section 9 of the Arbitration and Conciliation Act, 1996 - Jurisdiction - The court held that the venue of arbitration being Chennai is a significant factor indicating that the courts at Chennai have jurisdiction. The parties agreed that arbitration shall be conducted at Chennai, which implies that the courts at Chennai would have supervisory jurisdiction. (Paras 6-10)
Issue of Consideration
Whether the Bombay High Court has territorial jurisdiction to entertain a petition under Section 9 of the Arbitration and Conciliation Act, 1996, when the contract was executed and performed in Chennai, and the arbitration venue is Chennai.
Final Decision
The court upheld the preliminary objection and dismissed the petition for lack of territorial jurisdiction, leaving the petitioner to seek remedies before the appropriate court at Chennai.
Law Points
- Territorial jurisdiction under Section 9 of the Arbitration and Conciliation Act
- 1996
- Cause of action for interim relief
- Venue of arbitration as a factor for jurisdiction
