Whether Agreement To Submit To Jurisdiction Of One Court Impliedly Ousts Jurisdiction Of All Other Courts? Punjab & Haryana HC Answers

The Punjab and Haryana High Court has made it clear that a party cannot invoke the alternative jurisdiction in a dispute once they have decided the territorial jurisdiction by way of entering into a valid contract.

The bench of Justice Sureshwar Thakur and Justice Sudeepti Sharma said if the contract is validly executed wherein the parties have consensually conferred the jurisdiction of a court, then the party is "estopped from negating it."

These observations were made while answering a reference question, “Whether the agreement to submit to the jurisdiction of one Court impliedly ousts the jurisdiction of all other Courts?”

In the present case the parties had agreed in a contract that with respect to any suit, action or proceeding, they will "irrevocably" submit to the jurisdiction of the Bombay High Court. However, the respondent instituted the suit in Gurugram, alleging that the cause of action arose in Gurugram.

The petitioners argued that the contracting parties have evidently abandoned and waived their rights to raise any objection, by way of entering into a contract that that the competent jurisdiction will be of Bombay High Court.

After examining the submissions, the Court found that the contract on which parties relied is "valid" and "thus for adjudicating any dispute as may emerge amongst them, but however obviously is to become made, subject to the apposite cause of action in whole or in part arising within the apposite consensually chosen adjudicatory jurisdictional venue."

Reliance was placed on Hakam Singh V. Gammon India Ltd. (1971) wherein the Apex Court held that, "Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner."

The bench noted that in the present case there is no wrangle nor there exists any evidence on record to suggest that the contract executed amongst the contracting parties is void or opposed to Section 23 of the Indian Contract Act.

It added that the respondent party has "acquiesced to the validity of the (jurisdiction) clause" and it did become estopped from negating the ad idem covenant.

Consequently, the Court held that the contract is validly drawn between the parties and the suit cannot be instituted in Gurugram.

Mr.D.S.Patwalia,SeniorAdvocatewith Mr. Sehar Navjeet Singh, Advocate for the petitioner.

Ms. Monika Thakur, Advocate for respondent No.1.

 Title: ICICI BANK LTD. v. M/S ORIENT CLOTHING CO. PVT. LTD. AND OTHERS

Citation: 2025 LiveLaw (PH) 02

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