Case Note & Summary
The plaintiff, LSI Logistic Shipping International S.A., a company incorporated under the laws of Luxembourg, filed a commercial suit against the defendant, RRC International Freight Services Limited, in the Bombay High Court. The defendant filed a notice of motion under Section 9-A of the Code of Civil Procedure, 1908, seeking that the issue of jurisdiction be decided as a preliminary issue. The contract between the parties, dated 17th April 2017, contained clauses XXIII and XXIV which provided that the contract is governed by the law of England and Wales and that in case of any disputes, the place of jurisdiction shall be London. Additionally, the plaintiff had sent a letter dated 25th August 2017 to the defendant acknowledging that the contract is governed by English law and submitting to the jurisdiction of the High Court in London. The defendant argued that in view of these clauses and the plaintiff's own letter, the Bombay High Court had no territorial jurisdiction to entertain the suit. The plaintiff's senior counsel, Mr. Kapadia, conceded that the suit could not be maintained in this Court in light of the contractual clauses and the plaintiff's letter. The court framed the issue of jurisdiction and, after hearing both sides, held that the jurisdiction of this Court is ousted. The court dismissed the suit as not maintainable, with no order as to costs.
Headnote
A) Civil Procedure - Jurisdiction - Ouster of Jurisdiction - Section 9-A Code of Civil Procedure, 1908 - Exclusive Jurisdiction Clause - The court considered whether an exclusive jurisdiction clause in a contract ousting the jurisdiction of Indian courts is valid. The court held that where parties have agreed that the contract is governed by English law and that the place of jurisdiction shall be London, the jurisdiction of Indian courts is ousted. The suit was dismissed for lack of territorial jurisdiction. (Paras 1-6)
Issue of Consideration
Whether the jurisdiction of the Bombay High Court is ousted in light of the contractual terms that the contract is governed by English law and disputes shall be subject to the exclusive jurisdiction of London courts.
Final Decision
The court held that the jurisdiction of this Court is ousted. The suit is dismissed as not maintainable. No order as to costs.
Law Points
- Exclusive jurisdiction clause
- Ouster of jurisdiction
- Section 9-A CPC
- Territorial jurisdiction
- Contractual choice of law and forum
Case Details
2017 LawText (BOM) (11) 78
Notice of Motion (Lodging) No.738 of 2017 in Commercial Suit (Lodging) No.608 of 2017
Mr. Rohit Kapadia, Senior Counsel with Mr. Karl Shroff i/b Mr. Nilesh Parekh for the Plaintiff; Mr. Milan Desai with Ms. Shaila Taware for the Applicant in Notice of Motion (Lodging) No.738 of 2017 (Original Defendant)
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Nature of Litigation
Commercial suit for recovery of money or damages, with a preliminary issue on jurisdiction.
Remedy Sought
The defendant sought dismissal of the suit on the ground that the Bombay High Court lacks territorial jurisdiction due to an exclusive jurisdiction clause in the contract.
Filing Reason
The plaintiff filed the suit in Bombay High Court despite a contractual clause providing for exclusive jurisdiction of London courts.
Previous Decisions
None; the court was deciding the preliminary issue of jurisdiction.
Issues
Whether the jurisdiction of this Court is ousted in light of the terms of the contract that the contract is governed by Law of England and Wales and that in case of any disputes the place of jurisdiction shall be London.
Submissions/Arguments
Defendant argued that the contract clauses and plaintiff's own letter show that the parties agreed to English law and exclusive jurisdiction of London courts, thus ousting Bombay High Court's jurisdiction.
Plaintiff's senior counsel conceded that the suit cannot be maintained in this Court in view of the contractual clauses and the plaintiff's letter.
Ratio Decidendi
Where parties to a contract have expressly agreed that the contract is governed by English law and that disputes shall be subject to the exclusive jurisdiction of London courts, the jurisdiction of Indian courts is ousted. Such an exclusive jurisdiction clause is valid and binding, and a suit filed in contravention thereof is not maintainable.
Judgment Excerpts
By this notice of motion, the applicant (original defendant) prays that the issue of jurisdiction be decided as a preliminary issue under section 9-A of the Code of Civil Procedure, 1908.
Whether jurisdiction of this Court is ousted in light of the terms of the contract : (i) that contract is governed by Law of England and Wales and (ii) in case of any disputes the place of jurisdiction shall be London ?
Mr.Kapadia, learned senior counsel for the plaintiff fairly states that in view of the clauses in the contract and the letter dated 25th August, 2017 addressed by the plaintiff to the defendant, the suit cannot be maintained in this Court.
Procedural History
The plaintiff filed Commercial Suit (Lodging) No.608 of 2017 in the Bombay High Court. The defendant filed Notice of Motion (Lodging) No.738 of 2017 under Section 9-A CPC seeking a preliminary determination of jurisdiction. The court framed the issue and heard arguments on 14th November 2017, and delivered judgment the same day dismissing the suit.
Acts & Sections
- Code of Civil Procedure, 1908: Section 9-A
