Exclusive Jurisdiction Clause Overrides The Seat Clause In An Arbitration Agreement: Delhi High Court
The High Court of Delhi has given primacy to an exclusive jurisdiction clause over the seat clause in an arbitration agreement. The Court held that when a clause confers exclusive jurisdiction on a court other than the seat court, then only the court on which exclusive jurisdiction is conferred shall decide all the applications arising out of the arbitration...
The High Court of Delhi has given primacy to an exclusive jurisdiction clause over the seat clause in an arbitration agreement. The Court held that when a clause confers exclusive jurisdiction on a court other than the seat court, then only the court on which exclusive jurisdiction is conferred shall decide all the applications arising out of the arbitration agreement.
The Agreement between the parties stipulated that the courts, at the place where the main premised of the petitioner is located which admittedly is in Gurgaon, shall have the exclusive jurisdiction to deal with applications for interim measures and the enforcement of arbitral award. It further designated New Delhi as the seat of arbitration.
The petitioner filed an application under Section 11 of the A&C Act before the High Court of Delhi on the premise that the seat of arbitration is in New Delhi, therefore, only the Courts in New Delhi shall have the exclusive jurisdiction over the arbitration proceedings.
The Single Bench of Justice Hari Shankar held that despite the fixation of the seat of arbitration if the agreement also provides that the court as some other place has been conferred with the jurisdiction to deal with all the matters arising out of the arbitration agreement then in such a situation the seat clause must surrender to the exclusive jurisdiction clause.
The Court relied on its earlier judgment in Cars24 Services Pvt. Ltd. v. Cyber Approach Workspace LLP, MANU/DE/2071/2020, wherein the Court distinguished all the judgments where seat courts have been conferred the exclusive jurisdiction on the ground that in all those cases there was no clause which conferred jurisdiction on some other court.
The Court rejected the argument of the petitioner that the clause is confined to the issue of interim measure and enforcement and an application for appointment of an arbitrator can be maintained before the High Court of Delhi. The Court held that such a position would lead to an anomalous situation where the jurisdiction would be conferred on two courts. Accordingly, the Court dismissed the application with the liberty to file the application before the Punjab and Haryana High Court.
Case Title: Hunch Circle Pvt. Ltd. v. Futuretimes Technology India Pvt. Ltd., Arb. P. No. 1024 of 2021
Citation: 2022 LiveLaw (Del) 379
Date: 02.02.2022
Counsel for the Petitioner: Mr. Preet Pal Singh, Mr. Sameer Chaudhary, Mr. Siddharth Tandon, and Mr. Aaryan Sharma.
Counsel for the Respondent: N/A