2013 (7) TMI 642 - SC - Companies Law

Jurisdiction of courts - whether clause 18 of the consignment agency agreement the Calcutta High Court has exclusive jurisdiction in respect of the application made by the appellant under Section 11 of the Arbitration and Conciliation Act Held that - The appellant shall be at liberty to pursue its remedy under Section 11in the Calcutta High Court the intention of the parties is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction - expression of one is the exclusion of another - By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata the parties have impliedly excluded the jurisdiction of other court - 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. The jurisdiction clause of an agreement, the absence of words like alone , only , exclusive or exclusive jurisdiction is neither decisive nor does it make any material difference in deciding the jurisdiction of a court. The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear and it is not advisable to read such a clause in the agreement like a statute.

Issues:
1. Whether the Calcutta High Court has exclusive jurisdiction under Clause 18 of the consignment agency agreement dated 13.10.2002.
2. Whether the Rajasthan High Court has territorial jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996.
3. Interpretation of jurisdiction clauses in contracts and their enforceability.

Detailed Analysis:

Issue 1: Exclusive Jurisdiction of Calcutta High Court
The core question is whether Clause 18 of the consignment agency agreement grants exclusive jurisdiction to the Calcutta High Court. Clause 18 states, "The Agreement shall be subject to jurisdiction of the courts at Kolkata." The appellant argued that this clause does not explicitly exclude the jurisdiction of other courts, such as those in Jaipur, where part of the cause of action arose. The respondent contended that the clause impliedly excludes all other courts' jurisdiction.

The judgment concluded that the intention of the parties, as expressed in Clause 18, was clear and unambiguous, implying that the courts at Kolkata alone have jurisdiction. This interpretation is supported by the legal maxim "expressio unius est exclusio alterius," meaning the expression of one is the exclusion of another. Therefore, the jurisdiction of other courts, including those in Jaipur, is excluded.

Issue 2: Territorial Jurisdiction of Rajasthan High Court
The appellant filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, in the Rajasthan High Court for the appointment of an arbitrator. The respondent contested this, citing the jurisdiction clause in the agreement. The Rajasthan High Court dismissed the application, stating it lacked territorial jurisdiction based on the agreement's jurisdiction clause.

The Supreme Court upheld this view, affirming that the jurisdiction clause in the agreement effectively excluded the jurisdiction of the Rajasthan High Court. The appellant was directed to pursue the application in the Calcutta High Court, as the agreement stipulated that only the courts at Kolkata had jurisdiction.

Issue 3: Interpretation and Enforceability of Jurisdiction Clauses
The judgment extensively reviewed precedents on jurisdiction clauses, emphasizing that such clauses are valid and enforceable if they clearly express the parties' intention to confer exclusive jurisdiction to a particular court. The absence of words like "alone," "only," or "exclusive" does not necessarily invalidate the clause if the intention to exclude other jurisdictions is clear.

Key cases cited include:
- Hakam Singh v. Gammon (India) Ltd.: Established that parties can agree to exclusive jurisdiction if two courts have territorial jurisdiction.
- A.B.C. Laminart v. A.P. Agencies: Clarified that jurisdiction clauses must be clear and unambiguous to exclude other courts.
- Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd.: Inferred exclusive jurisdiction based on the facts and circumstances.
- Balaji Coke Industry Private Limited v. Maa Bhagwati Coke Gujarat Private Limited: Reinforced that parties' intention to exclude other jurisdictions can be inferred even without explicit words.

The judgment reiterated that the presence of a jurisdiction clause in an agreement implies the parties' intention to exclude other courts' jurisdiction, provided the clause is clear and unambiguous. The court emphasized the importance of respecting the parties' contractual agreements regarding jurisdiction.

Conclusion:
The Supreme Court affirmed that the jurisdiction clause in the consignment agency agreement excluded the jurisdiction of the Rajasthan High Court, granting exclusive jurisdiction to the courts at Kolkata. The appellant was directed to pursue its remedy in the Calcutta High Court. The judgment reinforced the enforceability of jurisdiction clauses that clearly express the parties' intention to confer exclusive jurisdiction, even in the absence of explicit exclusionary terms.

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