Case Note & Summary
The petitioner, Polybond Organics Private Ltd., filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes arising out of a Work Order dated 08.12.2009 with the respondent, Era Infra Engineering Ltd. The petitioner had completed work for the respondent, who was a contractor for the Airports Authority of India for metal ceiling work at Raipur Airport. Disputes arose regarding payment, and the petitioner invoked the arbitration clause via notice dated 05.01.2017, but the respondent failed to nominate an arbitrator. The respondent did not deny the existence of the arbitration agreement but argued that Clause 2.7 of the Work Order provided that the courts at Delhi alone had exclusive jurisdiction over all matters arising out of the Work Order. The respondent submitted that the petition before the Karnataka High Court was not maintainable. The Court, after considering the submissions, noted that the exclusive jurisdiction clause clearly vested jurisdiction in Delhi courts. The Court found that the petition was not maintainable before it and dismissed the same, leaving the petitioner to seek appropriate remedy before the competent court at Delhi. The Court did not appoint an arbitrator.
Headnote
A) Arbitration - Appointment of Arbitrator - Section 11 of Arbitration and Conciliation Act, 1996 - Exclusive Jurisdiction Clause - The petitioner sought appointment of an arbitrator under Section 11 of the Act. The respondent contended that as per Clause 2.7 of the Work Order, the courts at Delhi alone had exclusive jurisdiction. The Court held that the exclusive jurisdiction clause ousted the jurisdiction of the Karnataka High Court, and the petition was not maintainable. (Paras 1-3)
Issue of Consideration
Whether a petition under Section 11 of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator is maintainable before the High Court of Karnataka when the agreement contains an exclusive jurisdiction clause vesting jurisdiction in courts at Delhi.
Final Decision
The petition is dismissed as not maintainable. The petitioner is at liberty to seek appropriate remedy before the competent court at Delhi.
Law Points
- Exclusive jurisdiction clause
- Section 11 of Arbitration and Conciliation Act
- 1996
- maintainability of petition
- territorial jurisdiction
Case Details
2018 LawText (KAR) (08) 16
Civil Miscellaneous Petition No.47 of 2017
Dinesh Maheshwari, Chief Justice
M.Sudhakar Pai (for petitioner), Azim Malik (for respondent)
Polybond Organics Private Ltd.
Era Infra Engineering Ltd.
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Nature of Litigation
Petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Remedy Sought
Appointment of an independent arbitrator to adjudicate disputes between the petitioner and respondent arising out of Work Order dated 08.12.2009.
Filing Reason
Disputes arose regarding payment after completion of project; respondent failed to nominate arbitrator despite notice.
Issues
Whether the petition under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable before the High Court of Karnataka in light of the exclusive jurisdiction clause in the agreement vesting jurisdiction in Delhi courts.
Submissions/Arguments
Petitioner: Respondent failed to nominate arbitrator as per agreement; Court may appoint independent arbitrator.
Respondent: As per Clause 2.7 of Work Order, courts at Delhi alone have exclusive jurisdiction; petition not maintainable before Karnataka High Court.
Ratio Decidendi
An exclusive jurisdiction clause in an agreement that vests jurisdiction in a particular court ousts the jurisdiction of other courts. Therefore, a petition under Section 11 of the Arbitration and Conciliation Act, 1996 must be filed in the court specified in the exclusive jurisdiction clause.
Judgment Excerpts
The existence of Arbitration Agreement is not denied by the respondent but then, it is contended that as per clause 2.7 relating to ‘Jurisdiction,’ the parties had agreed that only the Court at Delhi shall have jurisdiction in all the matters arising out of the Work Order in question and hence, this application is not maintainable before this Court at Bengaluru.
The court of Delhi alone shall have exclusive jurisdiction in all matters arising out of this Work Order.
Procedural History
Petitioner filed C.M.P. No.47/2017 under Section 11(5) of the Arbitration and Conciliation Act, 1996 before the High Court of Karnataka at Bengaluru on an unspecified date. The petition came up for admission on 03.08.2018, and the Court dismissed it as not maintainable.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11(5)
