Case Note & Summary
The petitioner, Vachaspati Sharma, challenged an arbitral award dated 16 June 2011 under Section 34 of the Arbitration and Conciliation Act, 1996, before the Bombay High Court. The dispute arose from lease agreements of January 2000 and 25 March 2000 for a trailer and tanker. The agreements contained an arbitration clause (Clause 33) referring disputes to arbitration under the Arbitration Act, 1940, and a jurisdiction clause (Clause 34) stating that the Chennai City Court alone shall have exclusive jurisdiction over any suit, claim, or dispute arising out of the agreement. The Bombay High Court had earlier appointed the arbitrator by order dated 22 June 2004 in Arbitration Application No.33 of 2004. The respondent raised a preliminary objection that the Bombay High Court lacked jurisdiction to hear the Section 34 petition due to the exclusive jurisdiction clause. The court agreed, holding that merely because the place of arbitration was Mumbai and this court appointed the arbitrator, that did not confer jurisdiction in view of the specific agreed clause. Without expressing any opinion on the merits of the award, the court dismissed the petition for lack of jurisdiction, leaving the petitioner to seek remedies before the appropriate court in Chennai.
Headnote
A) Arbitration Law - Jurisdiction - Section 34 Arbitration and Conciliation Act, 1996 - Exclusive Jurisdiction Clause - The parties had agreed in the lease agreement that the Chennai City Court alone shall have exclusive jurisdiction over disputes. The Bombay High Court held that despite the arbitration being held in Mumbai and the court appointing the arbitrator, it had no jurisdiction to entertain a Section 34 petition in view of the specific agreed clause. The petition was dismissed for lack of jurisdiction. (Paras 4-5)
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996, when the parties had agreed that the Chennai City Court alone shall have exclusive jurisdiction over disputes arising out of the agreement.
Final Decision
The Bombay High Court dismissed the petition for lack of jurisdiction, holding that the Chennai City Court alone has exclusive jurisdiction as per the agreement between the parties. The court did not express any opinion on the merits of the award.
Law Points
- Exclusive jurisdiction clause
- Section 34 Arbitration and Conciliation Act
- 1996
- jurisdiction of court
- agreement between parties
Case Details
2013 LawText (BOM) (01) 70
Arbitration Petition No. 909 of 2011
Mr. S.V. Sadavarte i/by M/s. Mahesh Menon and Co. for the Petitioner, Mr. Manish Bohra i/by M/s. A.S. Khan and Associates for the Respondent
India Cements Capital and Finance Ltd.
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Nature of Litigation
Challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
The petitioner sought to set aside the arbitral award dated 16 June 2011.
Filing Reason
The petitioner was aggrieved by the arbitral award and filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996.
Previous Decisions
The Bombay High Court appointed the arbitrator by order dated 22 June 2004 in Arbitration Application No.33 of 2004. The arbitrator passed the award on 16 June 2011.
Issues
Whether the Bombay High Court has jurisdiction to entertain a Section 34 petition when the parties agreed that the Chennai City Court alone shall have exclusive jurisdiction.
Submissions/Arguments
The respondent argued that the Bombay High Court lacks jurisdiction due to the exclusive jurisdiction clause in the lease agreement, which gives exclusive jurisdiction to the Chennai City Court.
The petitioner presumably argued that the Bombay High Court has jurisdiction because the arbitration was held in Mumbai and this court appointed the arbitrator.
Ratio Decidendi
Where parties have agreed that a particular court shall have exclusive jurisdiction over disputes arising out of an agreement, that court alone has jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996, even if the arbitration was held elsewhere and another court appointed the arbitrator.
Judgment Excerpts
Considering the above two clauses, it is very clear that as the part of cause of action also arose in Chennai, as referred and as agreed the Chennai City Court has exclusive jurisdiction to entertain the petition under Section 34 of the Arbitration Act.
Merely because the place of Arbitration was in Mumbai and as this Court has appointed the Arbitrator, that itself, in my view gives no jurisdiction to this Court to entertain Section 34 Petition in view of the specific agreed clause between the parties.
Procedural History
The petitioner filed Arbitration Petition No. 909 of 2011 on 23 September 2011 challenging the arbitral award dated 16 June 2011. The Bombay High Court admitted the matter on 13 January 2012. On 23 January 2013, the court heard the matter and dismissed the petition for lack of jurisdiction.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
- Arbitration Act, 1940:
