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TMI Blog2019 (7) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... eed to have the venue of arbitration at Bhubaneswar, the Madras High Court erred in assuming the jurisdiction under Section 11(6) of the Act. Since only Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order is liable to be set aside. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... Production (India) Inc. (2018) 7 SCC 374 and other judgments. It was contended that the High Court erred in holding that clause (18) of the agreement does not outst the jurisdiction of the courts other than the courts at the Seat of arbitration at Bhubaneswar. The learned counsel submitted that the High Court erred in not applying the ratio of Indus Mobile wherein the Supreme Court held that in case of domestic arbitration where the parties have agreed at the Seat of arbitration, the said court will have exclusive jurisdiction. 7. Per contra, the learned counsel for the respondent submitted that since cause of action arose at both the places i.e. Bhubaneswar and Chennai, both Madras High Court as well as Orissa High Court will have supervisory jurisdiction. Reliance was placed upon para No. (96) of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552. It was submitted that in domestic arbitration, unless the parties tie themselves to an exclusive jurisdiction of the court in the agreement, mere mention of "venue" as a place of arbitration will not confer exclusive jurisdiction upon that court. It was urged that apart from mere mention of "venue" as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seat of arbitration was outside India whether the provisions of Part-I of the Act would be applicable for grant of relief as held in Bhatia International v. Bulk Trading S.A. and another (2002) 4 SCC 105. The Constitution Bench in BALCO held that "if the legal or juridical seat of arbitration is outside India, then Part-I of the Arbitration and Conciliation Act, 1996 shall be inapplicable to such arbitrations; and even in case a clause in the arbitration agreement purports to apply Part-I of the 1996 Act to an arbitration where the juridical seat of arbitration is outside India, Part-I shall be inapplicable to the extent inconsistent with the arbitration law of the seat of arbitration." Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552. 11. In BALCO, the court highlighted the distinction between the "Seat" and "Venue" in the context of Section 20(3) of the Act. Section 20(3) of the Act allows the parties to hold meetings, proceedings and hearings at any place agreed by the parties. In BALCO, the court has held that in an international commercial arbitration "seated" in India, parties may by mutual agreement, hold arbitral proceedings outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the extent inconsistent with the arbitration law of the seat, even if the agreement purports to provide that the Arbitration Act, 1996 shall govern the arbitration proceedings." 12. As pointed out earlier, Section 2(1)(e) of the Act defines the "Court" with reference to the term "subject-matter of the suit". As per Section 2(1)(e) of the Act, if the "subject-matter of the suit" is situated within the arbitral jurisdiction of two or more courts, the parties can agree to confine the jurisdiction in one of the competent courts. In para (96) of BALCO, the Supreme Court held that the term "subject-matter" in Section 2(1)(e) of the Act is to identify the court having supervisory control over the arbitral proceedings. The Supreme Court held that the provisions in Section 2(1)(e) of the Act has to be read in conjunction with Section 20 of the Act which give recognition to the autonomy of the parties as to "place of arbitration". The observations in para No. (96) in BALCO pertaining to arbitrations governed by Part-I of the Act i.e. where the "place of arbitration" in India read as under:- "96. …….We are of the opinion, the term "subject-matter of the arbitration" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court within whose jurisdiction "subject-matter" of the suit is situated and the court within the jurisdiction of which the dispute resolution i.e. the "venue" of arbitration is located. 13. As per Section 20 of the Act, parties are free to agree on the place of arbitration. Party autonomy has to be construed in the context of parties choosing a court which has jurisdiction out of two or more competent courts having jurisdiction. This has been made clear in the three-Judges Bench decision in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. (2013) 9 SCC 32. In the said case, respondent-Indian Oil Corporation Limited appointed M/s. Swastik Gases (P) Ltd. situated at Jaipur, Rajasthan as their consignment agent. The dispute arose between the parties as huge quantity of stock of lubricants could not be sold by the applicant and they could not be resolved amicably. In the said matter, clause 18 of the agreement between the parties provided that the agreement shall be subject to the jurisdiction of the courts at Kolkata. The appellant-Swastik invoked clause 18 - arbitration clause and filed application under Section 11(6) of the Act before the Rajasthan High Court for appointment of ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but this, in our view, is not decisive and does not make any material difference. The intention of the parties-by having Clause 18 in the agreement- is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that 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 courts. 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. 33. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of CPC be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. 20. It is well settled that where more than one court has jurisdiction, it is open for the parties to exclude all other courts. For an exhaustive analysis of the case law, see Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. (2013) 9 SCC 32 This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal v. Chhattisgar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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