If Agreement Has Exclusive Jurisdiction Clause, Courts In The Venue Of Arbitration Also Cannot Be Approached: Delhi HC [Read Judgment]

The Delhi High Court, on Friday, dismissed an Application filed under Section 11 of the Arbitration and Conciliation Act, 1996, noting that the agreement specifies Courts in Noida to have exclusive jurisdiction.

"Now simply to allege there being no High Court in NOIDA would not confer the jurisdiction upon the Courts at U.P.; would be stretching the Article 12 (supra) too much. The subject agreement when refer to the venues of arbitration be at NOIDA/New Delhi it relate only to the convenience of parties in holding arbitral hearings and does not in any way confer jurisdiction upon Delhi Courts. Thus in the light of an exclusive jurisdiction clause in relation to arbitration proceedings, which excludes the jurisdiction of all other Courts than the Court mentioned therein, the application would only lie before the High Court exercising jurisdiction over NOIDA, Uttar Pradesh and not before this Court," Justice Yogesh Khanna ruled.

The parties, CVS Insurance and Investments and Vipul IT Infrasoft Pvt. Ltd. had entered into an agreement in January, 2013. Soon after, they had disputes regarding payments and CVS Insurance invoked the arbitration clause, approaching the High Court.

The agreement had given exclusive jurisdiction to the Courts at Noida, while keeping Delhi and Noida as the venues for arbitration.

The Court, at the outset, referred to several judicial precedents and culled out the following principles: "(a) there shall be only one seat of arbitration though venues may be different; (b) where the arbitration seat is fixed (may be neutral), only such court shall have an exclusive jurisdiction; (c) where a seat/place of arbitration is fixed it is section 20(1) and section 20(2) of the Act we are referring to; and (d) venue relates to convenience of parties, per section 20(3) of the Act."

It then noted that barring the fact that the registered office of the company was at Delhi, none of the causes of action arose within the jurisdiction of the Delhi High Court.

It further observed, "Admittedly the agreement was executed at NOIDA; it was to be performed at NOIDA; payments pursuant to the agreement were to be made at NOIDA; the agreement pertains to a sublease of unit based in NOIDA; the stamp paper on which the agreement was executed pertains to Utter Pradesh; and that the petitioner and respondent had agreed to an exclusive jurisdiction of NOIDA per article 12(3) even in relation to the arbitration proceedings and all other matters connected to the arbitration besides suits, complaint, litigation etc."

It then refused to entertain the application, directing the parties to approach the Allahabad High Court instead.