9911796707
TMI Blog2005 (3) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... he name and style of M/s. Chand Mal Prakash Chand and Co. at Calcutta; that Shree Subhalaxmi Fabrics Pvt. Ltd., Mumbai (defendant No. 1), which is a company registered under the Companies Act and sells cloth through its agent M/s. Naresh Enterprises, which has its office at Calcutta, under the terms and conditions as dictated by defendant No. 1; that the plaintiff was getting supplies against the orders placed by him at Calcutta through the agent of defendant No. 1; that all such supplies were made by the agent to the plaintiff at Calcutta at his premises No. 160, Jamunalal Bajaj Street and all payments made by the plaintiff were collected by this agent on behalf of defendant No. 1 at Calcutta; that the plaintiff was taking delivery of goods at Calcutta on the basis of Railway Receipts/Lorry Receipts and consignment notes from the said agent M/s. Naresh Enterprises. The case of the plaintiff further is that there was no arbitration agreement between the plaintiff and defendant No. 1 at any point of time for referring their disputes to any arbitrator; that he was not a member of defendant No. 2 M/s. Hindustan Chambers of Commerce, having its office in Mumbai. As the plaintiff became ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny dispute arises about the transaction the same shall have to be referred to the Hindustan Chamber of Commerce, Bombay, for decision under its Arbitration Rules." It was further stated in the application filed by the appellant (defendant No. 1) that in the indent/offer letter, which was prepared and sent by the middleman M/s. Naresh Enterprises, to the office of defendant No. 1 a condition was mentioned regarding jurisdiction of courts, which reads as under: - "UNDER JURISDICTION OF THE COURT FROM WHERE THE GOODS HAVE BEEN DESPATCHED". In all the bills/invoices, which were sent to the plaintiff, it was specifically mentioned at the top "subject to Mumbai jurisdiction" and at the left hand side at the bottom the following was written: - "In case of dispute arising out of the transaction between the vendors and the purchaser and the brokers or agent either for payment or any other dispute in relation to the transaction, the same shall be referred to the Hindustan Chamber of Commerce, Mumbai, for decision under its Arbitration Rules and the Award made thereunder shall be binding upon the parties." Since dispute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the courts. It was further held that the plaintiff's plea that "from where the goods have been dispatched" is not sufficiently specific as to exclude a court's jurisdiction is no doubt an arguable case. On these findings the appeal was allowed and all further proceedings in arbitration cases A/186 and A/187, initiated by the defendant No. 1 before defendant No. 2, were stayed subject to the plaintiff's depositing Rs. 2 lakhs with the Registrar General within two days of the receipt of the certified copy of the order. Shri M.N. Krishnamani and Shri Jaideep Gupta, learned senior advocates, who have appeared for the appellant Shree Subhlaxmi Fabrics Pvt. Ltd. (defendant No. 1) have assailed the order of the High Court on two grounds. The learned counsel have submitted that the indent (contract) contained a clause that in case any dispute arises about the transaction the same shall have to be referred to the Hindustan Chamber of Commerce, Mumbai, for decision under its Arbitration Rules and as such there was an arbitration agreement between the parties, which was invoked by the appellant by making a reference to defendant No. 2. The defendant No. 2 had sent a notice to the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent of judicial intervention. Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this part." "7. Arbitration agreement. (1) In this part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 7 provides that the arbitration agreement shall be in writing and such an agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Sub-section (4) of Section 7 provides the conditions under which a document or exchange of letter or exchange of statement of claim and defence may amount to an arbitration agreement. Section 16 of the Act is important and it provides that the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or authority of the arbitration agreement. Section 11 of the Act provides for appointment of arbitrators and sub-section (6) thereof empowers the Chief Justice of the High Court or any person or institution designated by him to make such an appointment on the happening of certain conditions enumerated in clauses (a), (b) or (c). In Konkan Railway Corpn. Ltd. vs. Mehul Construction Co. 2000 (7) SCC 201, a three Judge Bench of this Court held that at the stage when a party has approached the Chief Justice for appointment of an arbitrator, the contentious issues should not be decided at that stage and the aggrieved party can raise all the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitrator appointed by the Designated Judge." In Food Corporation of India vs. Indian Council of Arbitration and others 2003 (6) SCC 564 (para 14), it was emphasized that the legislative intent underlying the 1996 Act is to minimize the supervisory roles of courts in the arbitral process and nominate/ appoint the arbitrator without wasting time, leaving all contentious issues to be urged and agitated before the arbitral tribunal itself. It was further held that even in the old law, common sense approach alone was commended for being adopted in construing an arbitration clause more to perpetuate the intention of the parties to get their disputes resolved through the alternate disputes redressal method of arbitration rather than thwart it by adopting a narrow, pedantic and legalistic interpretation. The consistent view taken by this Court, therefore, is that contentious issues should not be gone into or decided at the stage of appointment of an arbitrator and no time should be wasted in such an exercise. The remedy of the aggrieved party is to raise an objection before the arbitral tribunal as under Section 16 of the Act it is empowered to rule about its own jurisdiction. It is, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an ouster clause it is necessary to construe the ousting expression or clause properly. Often the stipulation is that the contract shall be deemed to have been made at a particular place. This would provide the connecting factor for jurisdiction to the courts of that place in the matter of any dispute on or arising out of that contract. It would not, however, ipso facto take away jurisdiction of other courts. Where an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of ouster clause when words like 'alone', 'only', 'exclusive' and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim 'expressio unius est exclusion alterius' expression of one is the exclusion of another may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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