Court Having Exclusive Jurisdiction Would Have Juridical Seat Of Arbitration: Delhi High Court
The Delhi High Court Bench of Justice Sachin Datta has held that where exclusive jurisdiction has been conferred on a court with respect to matters relating to arbitration, the same shall be construed to be a clear 'contrary indicia' and that the court, upon which exclusive jurisdiction has been conferred, would be the juridical seat of arbitration.
Brief Facts:
The petition has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 vis-a-vis appointment of a sole arbitrator. The disputes arose between the parties with respect to a Delivery Services Agreement on account of non-payment of the outstanding monetary entitlements. The petitioner invoked arbitration by proposing three names, but they were not able to appoint a sole arbitrator. So, the petitioner filed the present petition.
Observation of the court:
The court observed that the choice of seat is not unequivocal, and Gurgaon has been referred to as the venue/seat of arbitration. Also, the preceeding part of the clause 19 specifically contemplates that Courts at New Delhi shall have exclusive jurisdiction to preside over “matters arising hereunder”. And the succeeding part of the clause provides for the arbitration mechanism. So, it is evident that the arbitration mechanism created under Clause 19 has been made, by the very same clause, to be subject to the exclusive jurisdiction of Courts in New Delhi.
Additionally, the court noted that although Clause 19 provides that the venue/seat of arbitration shall be Gurgaon, the very same clause makes the arbitration subject to the exclusive jurisdiction of Courts in Delhi. The exclusive jurisdiction clause, in the light of the peculiar language of the clause, is not in the nature of a generic stipulation; rather, it is referable to the conduct of arbitration proceedings.
Moreover, the court held that where exclusive jurisdiction has been conferred on a court with respect to matters relating to arbitration, the same shall be construed to be a clear 'contrary indicia' and that the court, upon which exclusive jurisdiction has been conferred, would be the juridical seat of arbitration.
Finally, the court held that the scope of examination in proceedings under section 11 A&C Act is confined to ascertaining the 'existence' of the arbitration agreement. Since the existence of the arbitration agreement is admitted in the present case, there is no impediment for this Court to constitute an Arbitral Tribunal to adjudicate the disputes between the parties. Consequently, the court appointed a sole arbitrator to adjudicate the dispute.
Case Title: DELHIVERY LIMITED versus STERNE INDIA PRIVATE LIMITED
Case Number: ARB.P. 992/2024
Counsel for the Petitioner: Mr. Naman Joshi and Mr. Guneet Sidhu, Advocates.
Counsel for the Respondent: Mr. Sumit Roy and Mr. Siddharth Mahajan, Advocates.
Date of Judgment: 13.11.2024