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TMI Blog1992 (4) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... r of procedure do apply to appeals against the decision of a trial judge to a larger Bench and that the provisions of S. 104 read with Order 43, Rule 1 of the Code of Civil Procedure, 1908 do apply to the Letters Patent Appeals, but the bar in S.104 of the Code of Civil Procedure that no appeal shall lie from any order passed under this Section shall not inhibit the appellate jurisdiction of the High Court under Cl. 15 of the Letters Patent. 3. A Full Bench of this Court in Mary Thomas v. Dr. K.E. Thomas 1989 2 LW 344 has considered the jurisdiction of the High Court on the Original Side, in the light of the provisions in the Family Courts Act, 1984, taken notice of Art. 225of the Constitution and the pre-existing jurisdiction of the High Court preserved there under and held that the Letters Patent jurisdiction of this Court is not ousted on account of the creation of exclusive Family Courts. 4. Our attention however has been drawn to a judgment of the Supreme Court in Union of India v. Mahindra Supply Co. AIR 1962 S.C. 256 in which it has been noticed that the Arbitration Act which is a consolidating and amending Act, being substantially in the form of a Code relating to arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the learned single Judge rejecting the petition under S. 33 of the Arbitration Act, 1940 is not appealable. The Bench hearing the appeal, however, thought that to give finality to such objection, the matter should be referred to a Full Bench. 7. The original civil jurisdiction of this Court as to suits is preserved under Cl. 12 of the Letters Patent of this Court in these words: And we do further ordain that the said High Court of Judicature at Madras, in exercise of ordinary original civil jurisdiction, shall be empowered to receive, try, and determine suits of every description if, in the case of suits for land or other immovable property, such land or property shall be situated, or, in all other cases, if the cause of action shall have arisen, either wholly or in case the leave of the Court shall have been first obtained, in part:, within the local limits of the ordinary original jurisdiction of the said High Court; or if the defendant at the time of the commencement of the suit shall dwell or canyon business or personally work for gain, within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Court shall be to us, our heirs or Successors in Our or Their Privy Council, as hereinafter provided. It has thus made a judgment passed on the original side of court appealable. It has not been disputed before us and in our opinion, it could not be disputed that the application under S. 33 of the Arbitration Act, 1940, is entertained as a suit and the judgment passed therein attracts the appellate jurisdiction under Cl. 15 of the Letters Patent of this Court. This clause gives to the Court the appellate jurisdiction not only against the judgment in a suit tried and determined on the original side of the Court but also against the judgment delivered in an appeal from the original decree or order of a Court subordinate to this Court. Prior to the enactment of the Arbitration Act, 1940, arbitration proceedings were governed by the Arbitration Act of 1899 and Schedule II of the Code of Civil Procedure. Arbitration Act, 1940 consolidated, amended and repealed 1899 Act and Schedule 2 of the Code of Civil Procedure and class. (a) to (f) of S. 104of the Code of Civil Procedure. It set up machinery for all contractual arbitrations. S. 39 of this Act provides: (1) an appeal s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not being an order made in the exercise of provisional jurisdiction...) of one Judge of the High Court. Said: By this clause, a right to appeal except in the cases specified from one Judge of the High Court to a Division Bench is expressly granted. But the Letters Patent are declared by Cl. 37 subject to the legislative power of the Governor-General-in-Council and also of the Governor-in-Council under the Government of India Act 1915, and may in all respects be amended or altered in exercise of legislative authority. Under S. 39 (1), an appeal lies from the orders specified in that sub-section and from no others. The legislature has plainly expressed itself that the right of appeal against orders passed under the Arbitration Act maybe exercised only in respect of certain orders. The right to appeal against other orders is expressly taken away. If by the express provision contained in S. 39(l), a right to appeal from a judgment which may otherwise be available under the Letters Patent is restricted, there is no ground for holding that Cl. (2) does not similarly restrict the exercise of appellate power granted by the Letters Patent. If for reasons aforementioned the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of S. 39(1) and (2) of the Arbitration Act. Under the Code of 1908, the right to appeal under the Letters Patent was saved both by S. 4 and the clause contained in S. 104(1), but by the Arbitration Act of 1940, the jurisdiction of the Court under any other law for the time being in force is not saved; the right of appeal can therefore be exercised against orders in arbitration proceedings only under S. 39, and no appeal (except an appeal to this Court) will lie from an appellate order. The Supreme Court rejected a contention by counsel for the respondents that some provisions in S. 104 of the Code of 1908, which appear to have been deleted by S. 39 (l) of the Arbitration Act, were in fact superfluous and their deletion made no difference in the right of appeal under the Letters Patent. The Supreme Court said: The clause was enacted with a view to do away with the unsettled state of the law and the cleavage of opinion between the Allahabad High Court on the one hand and Calcutta, Bombay and Madras High Courts on the other, on the true effect of S. 588 of the Code of Civil Procedure upon the power conferred by the Letters Patent. If the legislature being cognizant of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so far as Letters Patent deal with appeals against orders passed in arbitration proceedings, they must be read subject to the provisions of S. 39(1) and (2) of the Arbitration Act. They appear to mean that as in the case of an appeal to any other Court in an arbitration proceeding, there would be appeals only against such orders which are enumerated in sub-s. (1) of S. 39, there would be no appeal under cl.15 of the Letters Patent, if the High Court itself is the trial Court in place of any other Court subordinate to it. Some High Courts have so read the judgment in the case of Union of India v. Mahindra Supply Co. (supra) and held that there is no right of appeal against an order passed in an arbitration proceeding, if the order does not fall under any of the categories enumerated in sub-S. (1) of S. 39 of the Act. 10. A learned single Judge of the Calcutta High Court rejected certain applications for appointment of an Umpire under S. 8 of the Arbitration Act as well as for appointment of Receiver on the ground that a part of the cause of action had allegedly arisen within the original civil jurisdiction of the Court and leave under cl. 12 of the Letters Patent had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. 41(b) Now, an appeal under S. 39(1) of the Indian Arbitration Act lies against only those orders which are specifically enumerated therein and against no other, and a perusal of S. 39(1) will show that an order under S. 41(b) is not an appealable order. It is pointed out by the appellant that the present appeal has been preferred under Clause 10 of the Letters Patent and not under S. 39(1). As to that, it has been laid down in Union of India v. Mahindra Supply Co., AIR 1962 S.C. 256 that the Letters Patent cannot be resorted to in order to sustain an appeal against an order under the Indian Arbitration Act. That is also the view taken by the Calcutta High Court in Rebati Ranjan Chakravarti v. Suranjan Chakravarti AIR 1963 Cal. 642. For the same reason, in our opinion, no appeal will lie under Order 43 Rule 1 of the Code of Civil Procedure. 12. Before, however, we advert to the question before us; we may take notice of certain Observations of the Supreme Court in the case of Shah Babulal Khimji viayaben AIR 1981 S.C. 1786=94 L.W. 91 S.N; a judgment which we think, has said a great deal on the subject. In this judgment, a reference has been made to the judgment in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Arbitration Act giving a right of appeal to a litigant from the order of a trial judge to the Division Bench in any way fetter or override the provisions of the Letters Patent. Has the Supreme Court not read in the judgment in Union of India v. Mohindra Supply Co. (supra) that Order 39 Rule 1of the Code of Civil Procedure is an enabling provision giving additional right of appeal to a litigant from the order of the trial judge and not a provision, which restricts the appeals to the orders falling under Order 39, Rule 1of the Code of Civil Procedure? 13. We shall come back to Shah Babulal Khimji's case and the judgment of the Supreme Court a bit later. Before that we do a little more prospecting under which the law on the subject will give us a better understanding of the problem. Prior to the Code of Civil Procedure, 1908, there were two Codes, one, of 1877 and the other, of 1882. In the 1877 Code, S. 588 provided for appealable orders under clauses (a) to (t) and said that an appeal from any order specified in that section would he to the High Court or when an appeal from any other order is allowed by the chapter, it would lie to the Court to which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Privy Council permitted appeals, under clause 15 of the Letters Patent, against orders which did not fall in the list of the appealable orders under S. 588 of the Code (See Chappan v. Moidin Kutti (1899) ILR 22 Mad 68; Toolsee Money Dassee v.Sudevi Dassee (1899) ILR 26 Cal. 363 and Secretary of State v. Jehangir (1902) ILR 4 Bom 342 The Allahabad High Court, however, took a different view and held that, if an order was not appealable under Ss.588 and 591 of the Code of 1877, it could not be appealed against even under the Letters Patent of the High Court in Banno Bibi v. Mehdi Hussatn (1989) ILR 11 All 375 and re-affirmed in Muhammad Naim-ul-Lahkhan v. Insan Lahkhan ILR 14 All 226. 15. Commenting upon this conflict, in Shah Babulal Khimji's case (supra), the Supreme Court has said: With due respect we would like to point out that the pointed and terse observations of the Privy Council did not leave any room for any doubt or speculation in the matter. While construing S. 588, the Judicial Committee in Hurrish Chunder Chowdry's case (1882) 10 In App 4 (supra) had made it clear that appeals would lie under S. 588 to the High Court and the Section did not cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the trial judge. 17. After referring to S. 5 of the Code of 1908 and extracting it, the Supreme Court has Said: The importance of this section is that wherever the provisions of the Code of Civil Procedure are sought to be excluded by any special enactment which may be silent on the point, the State Government can by notification apply the provisions of the Code to Revenue Courts. A bare perusal of this section would clearly reveal that excepting Revenue Courts all other Civil Courts would normally be governed by the provisions of the Code of Civil Procedure in the matter of procedure. S. 4 (1) of the Code of 1908 which is a saving provision clearly provides that in the absence of any specific provision to the contrary the provisions of the Code do nor limit or affect any special or local law. Thus, the test contained in S. 4 is not applicable in the instant case because even if the Letters Patent of the High Court be deemed to be a special law as contemplated by S. 4, the provisions of S. 104do not seek to limit or affect the provisions of the Letters Patent. 18. The observations of the Supreme Court extracted above establish that this Court's View in Chappan v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ILR 9 Cal. 482), say:- It only remains to observe that their lordships do not think that S. 588 of Act X of 1877, which has the effect of restricting certain appeals, applies to such a case as this, where the appeal is from one of the Judges of the High Court to the Full Court. On this reference I conceive that it is no part of our duty to consider the particular order out of which the reference to the Full Bench is made and without doing so it is in my opinion impossible to say whether the order in question is appealable or not. The result of this judgment (so far as it applies to the question before us) appears to me to come to this, that if the order made by a single Judge only amounts to an order such as is intended by Chapter 43 of the Code, it is not appealable unless it is within S. 588, but if it amounts to more and is a judgment, then it is appealable; in other words, that the right given by S. 15 of the Letters Patent to appeal from the order of a single Judge is only limited by the Code to such orders as do not amount to a judgment whereby the rights of the parties are concluded, but. Where this is the case, the order amounts to a judgment within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny contrary legislation, Letters Patent will continue to provide for appeals against judgments on the Original Side of the Court and judgments of a judge of this Court in appeals against the original decree of a Court subordinate to this Court. In Shah Babulal Khimji's case (supra), the Supreme Court has clearly indicated that appeals against appealable orders under Order 43, Rule 1of the Code of Civil Procedure are permissible under Cl. 15 of the Letters Patent of the Court not because the Code provides for such appeals only, but also because it is fair to hold that such orders which are declared appealable by the Court are judgments. The Supreme Court has, in the judgments, referred to a Full Bench judgment of the Calcutta High Court in Mathura Sundari Dassi v. Haran Chandra Shahs AIR 1916 Cal 361 to come to the said conclusion and quoted a passage from that judgment which reads: By the terms of S. 117, the Code is made applicable to the High Court, and Order 43, Rule 1gives a right of appeal in the very case under discussion. But it is said that this Code and the rules made under it do not apply to an appeal from a learned judge of the High Court. I cannot follow that arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y law for the time being in force, from no other orders. The effect of S. 104 is thus, not to take away a right to appeal given by clause 15 of the Letter, Patent, as not applicable hold accordingly that this appeal is competent under clause (c), Rule 1, Order 43 of the Civil PC. I am further of opinion that the appeal is competent also under clause 15 of the letters Patent. 22. The procedural law relating to arbitration which had previously been codified under the Code has since been codified and amended in the Arbitration Act, 1940. If a reference is made to the provisions in S.104 of the 1908 Code and then the words in S. 39 (1) of the Arbitration Act are taken notice of, one may have the impression that the Arbitration Act has intended to exclude from the appellate Letters Patent jurisdiction of the Court quite a few types of orders which otherwise were judgments, appealable under clause 15 of the Letters Patent. But when we make a closer examination and take notice of the provisions in the Code of 1877 and the Code of 1882 and find that Ss. 588 and 591 together carried on almost a similar inhibition to appeals against orders in the arbitration proceedings, which were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a group of clauses consisting of clauses II to 18 headed Civil Jurisdiction of the High Court. Clause 12 deals with original jurisdiction as to suits and clause 13 with extra-ordinary original civil jurisdiction while clause 14 deals with joined of several causes of action. Though the marginal note to clause 15 was the same as that to the old clause 14, a most material change was made in clause 15 by providing that intra court appeals would lie from the judgment (not being a sentence or order passed or made in any criminal trial) of one Judge of the said High Court, or of one Judge of any Division Court. The word Judgment in clauses 15 is not qualified in anyway as to the jurisdiction in which it is given except that it should not be a sentence or order passed or made in any criminal trial, thus excluding judgments given in the exercise of criminal jurisdiction. Criminal jurisdiction is provided for in clauses 22 to 29. Various other jurisdictions conferred upon the High Courts, except ordinary and extraordinary civil jurisdiction, also feature in clauses subsequent to clause 15. Marginal notes or headings to groups of sections cannot control the meaning of a section if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictions not so mentioned. For instance, the jurisdiction to commit for contempt is not expressly mentioned in the Letters Patent but the Calcutta High Court in Mohendra Lai Milter v. Anizndo Cornrnar Miner (1897) ILR 25 Cal 236 and the Bombay High Court in Collector of Bombay v. Isaacs Penhas (1947) 49 Bom LR709: (AIR 1948 Bom 103) (FB) have held that an order made by a single Judge committing a person for contempt is appealable under clause 15. Similarly, in Mahomedalli Allabux v. Ismaitji Abdulji (1926) 28 Bom LR471 AIR 1926 Bom 332) the Bombay High Court held that an appeal lay from an order passed by a single judge directing a writ of habeas corpus to issue and in Raghunath Keshav Khwdilkar v. Poona Municipality (1944) 46 Bom LR 675: (SC) AIR 1945 Bom 7 it held that an appeal lay under clause 15 of the Letters Patent against the issue of a writ of certiorari by a single Judge. Re-visional jurisdiction is not expressly mentioned in clause 15 but as the Chartered High Courts were entertaining intra court appeals from judgments given in the exercise of re-visional jurisdiction, when the Letters Patent were amended in 1919 an intra court appeal from an order made in the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by them and the powers of the High Courts to make rules and to regulate the sittings of the Court and of members thereof sitting singly or in Division Courts have been preserved and continued subject to the provisions of the Constitution and of any law made by the appropriate Legislature. According to the Full Bench the words subject to create a limitation upon the jurisdiction and powers of the existing High Courts. This is not a correct interpretation. Article 225follows a pattern established by earlier legislation. Under S. 9 of the Indian High Courts Act, 1861. The jurisdiction and powers of the High Courts were made subject to the legislative powers of the Governor General of India in Council. Clause 44 of the Letters Patent of 1865 earlier made the provisions of the letters Patent subject to the same legislative powers and after the amendment of the said clause by the amending letters Patent of March 11,1919, subject to the legislative powers of the Governor-General in Legislative Council and also of the Governor General in Council. Under S. 106 (1a) of the Government of India Act, 1915-1919, the Letters Patent of a High Court could be amended from time to time by the Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (within the meaning of that term as used in that clause) of a single Judge of the High Court an appeal lies to a Division Bench of that High Court and there is no qualification or limitation as to the nature of the jurisdiction exercised by the single Judge while passing his judgment, provided an appeal is not barred by any statute (for example, S. 100-A of the Code of Civil Procedure, 1908) and provided the conditions laid down by clause 15 itself are fulfilled. The conditions prescribed by clause 15 in this behalf are: (1) that it must be a judgment pursuant to S. 108 of the Government of India Act of 1915, and (2) it must not be a judgment falling within one of the excluded categories set out in clause 15. 26. The decision in Umaji v. Radhikabai AIR 1986 S.C. 1272 on the nature of the appellate power of the Court under Clause 15 of the Letters Patent of this Court thus concludes that an appeal will lie against the judgment of the single Judge of the Court to a Division Bench if the conditions prescribed by clause 15 in this behalf are satisfied and when there is no specific bar by any statute for filing such appeal like one under S. 100-A of the Code of Civil Procedure, a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Company as respects the purchase of American Cotton. In the course of negotiations, the negotiator forwarded the terms of contract, purporting to be from American Company. Subsequently, negotiations between them continued mainly over telephone. 31. In the process of such negotiation, the Indian Company opened Letters of Credit for the Purchase of cotton from the two American Companies. M/s. Estevez Bros., Co., Inc. supplied the requisite cotton on the Letters of Credit as per the Understanding. However, the American Company wanted certain amendments to the terms of the Letter of Credit before ever cotton was to be supplied. The amendments, as suggested were not acceptable to the Indian Company. Consequently, the American Company treated the Indian Company as having committed breach of the contract and thereafter, sought to refer the matter for arbitration, pursuant to a clause in the terms of the contract. 32. The American Company is a member of the Liverpool Cotton Association Limited (in short 'the Association') situate at 620, Cotton Exchange Building, Edmund Street, Liverpool L3 9LH, England. Under the Rules prescribed, the Association purported to condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation could, if at all, be stated to have arisen. (5) To require the Indian Company to participate in arbitration in Liverpool in England is quite unjust, inequitable, opposed to all canons of justice and balance of convenience. 35. The American Company alone entered appearance through a counsel of its choice and resisted the said petition by repelling every one of the contentions raised therein. 36. It appears that when the application for ad interim injunction came up for orders before learned single Judge, it was agreed to by learned counsel on both sides that the main original petition itself could be disposed of, as it is a matter, which largely depends upon the correspondence available on record and consequently, the Original Petition itself was taken up for disposal. 37. Learned counsel for the Indian Company, it appears, ventured to make his submissions before learned single Judge, by placing reliance on the correspondence available and also sought permission to let in oral evidence, in proof of the projection of the claim of the Indian Company as to the non-existence or the validity or otherwise of the so-called arbitration agreement and such submission of lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case the petitioner not having returned the contract forms sent to him after duly signing the same cannot take advantage of his own lapse and contend that there was no agreement for arbitration. 41. With reference to the contention of the Indian Company as to the incalculable hardship and inconvenience that would be caused, if the arbitration is referred to in a foreign country, learned Judge would say in paragraph 15 thus: It is not possible to accept the contention of learned counsel for the petitioner that his client would be put to great hardship if arbitration is referred to in a foreign country. That argument is not available in a petition under S. 33 of the Arbitration Act. 42. In meeting the contention of the Indian Company as to the impassibility of its being subjected to arbitration by an arbitrator appointed by the Association, learned single Judge stated in paragraph 16 thus: It is next contended by learned counsel for the petitioner that his client is not a member of the Liverpool Cotton Association Limited and therefore he cannot be subjected to arbitration by an arbitrator appointed by the said Association. In view of the clear terms of the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em, in the light of the pronouncements of superior courts of jurisdiction, in the shape of decisions emerging from this Court, other High Courts and the apex of the judicial administration of this country as well, to which course, Mr. R. Krishnamoorthy, learned Senior Counsel appearing for the first respondent- American company would however express very strong disapproval, in the sense of supporting the impugned order. 45. The terms of the contract, as adverted to earlier, admittedly though had been reduced into writing were however, not signed by the parties. But, none the less, the terms of the contract are sought to be established by the American Company by the materials available on record, in the shape of correspondence that were exchanged between them. The Indian Company on their part, would contend that the materials available on record, if properly scanned, in the broad spectrum analysis, could by no stretch of imagination, be stated to establish the subsisting nature of a contract. Of course true it is, the Indian Company filed an. affidavit denying the entering into of any contract with the American company and what all took place between them is nothing but the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit. 48. The section, as extracted above, in simple words may mean that the Court shall decide the existence or validity of an arbitration agreement on affidavits or may in appropriate cases whenever it deems just and expedient, set down an application for hearing on other evidence also and it may pass such orders for discovery and particulars, as if it may pass in a suit. It is in the discretion of the Court to set down the application for being decided on evidence. Having once exercised its powers under the proviso, it goes without saying that such a discretionary power, if at all, has to be exercised not partially, but wholly on well recognized judicial principles and guidelines and not in an arbitrary, capricious, whimsical or fanciful manner. 49. Once learned single judge has elected or opt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;proof means anything which serves, either immediately or mediate, to convince the mind of the truth or falsehood of a fact or proposition and as truths differ, the proof adapted to them also differ. Thus, as regards quid probed, it is incontestable that the Indian Company has a right to prove the fact in issue and the facts relevant to it. 52. A learned judge of this Court in A. Sankarasadasivant v. A. Kumaravel AIR 1977 Mad 259 = 90 L.W. 77 jade in paragraph 10 thus: The contention of the learned counsel for the appellants is that in the event of the Court not accepting the affidavits filed by them to prove the existence of the agreement, they must be given an opportunity to establish the existence of the agreement by other evidence, oral and documentary, but, that the lower Court has not granted any opportunity to the appellants to establish the existence of the agreement. Perhaps, the lower Court proceeded on the basis that the question as to the existence of the arbitration agreement has to be decided only on affidavits in view of S. 33. It is true that S. 33 says that the Court shall decide the question as to the existence or validity of the arbitration agreement on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign jurisdiction clause. The stipulations were to the following effects: 26. All claims and disputes arising under and in connection with this bill of lading shall be judged in the U. S. S. R. 27. All questions and disputes not mentioned in this bill of lading shall be determined according to the Merchant Shipping Code of the U. S. S. R. In considering and interpreting the aforesaid two clauses, learned Chief Justice said: So, it is clear that the parties entered into a binding contract as between them that the Russian Courts should adjudicate the disputes arising under and in connection with the bill of lading and that the questions and disputes not mentioned in the bill of lading should be determined according to the Merchant Shipping Code of the U. S. S. R. At the moment this Court is not so much concerned with the law that should govern the contract but with the jurisdiction of the Small Cause Court at Madras.... The parties who made their choice of the Tribunal should normally be bound by their contract. That should especially be the case as to the choice of the law applicable to the contract. But it seems to me that enforcement by the Indian courts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his case, for, it was concerned with a foreign jurisdiction clause identical to what appears in this case. It applied the rule of ends of justice to sustain an English action notwithstanding the foreign jurisdiction clause binding between the parties to the dispute. The view was also based on the balance of convenience. The Court of Appeal in Mackender v. Feldia, A.G., (1967) 2 WLR 119) declined the English jurisdiction. But in doing so, it was obviously led by the peculiar facts of the case. The defendant there had already started proceedings in accordance with the foreign jurisdiction clause which did not appear to be unjust or inconvenient to the parties and the stakes involved were considerable unlike in this case. Lord Denning, M.R. however recognized: But although there is jurisdiction to give leave, it is a matter of discretion as to whether it should be granted. He also says later on in his judgment: The foreign jurisdiction clause is a positive agreement by the underwriters that policy is governed exclusively by the Belgian law. Any dispute under it is to be exclusively subject to Belgian jurisdiction. That clause still stands and is a strong ground why discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the civil revision petition was whether the Union of India should be compelled to have recourse to the Russian courts in view of the foreign Jurisdiction clause in the contract entered into between the Union and the petitioners, Far East Steamship Line, Vladivostok, Black Sea Steamship Line Odessa. It was a Russian ship which when called at the Nagapattinam port, made a short delivery. The Union brought the suit in the Court of the District Munsif of Nagapattinam. The suit was resisted by the Russian shipping company on ground, inter alia, that the foreign jurisdiction clause in the contract excluded jurisdiction of that Court to try the suit. The Munsif did not accept that view, and went upon consideration of Ss. 19 and 20, Civil Procedure Code. Doubting that the cause of action arose at Nagapattinam, he directed that the plaint should be returned for presentation to the City Civil Court, Madras, within whose jurisdiction the defendants reside, including the clearing agent. The Civil revision petition against that petition was, in the first instance, before Kailasam, J., (as he then was), who, after taking notice of the decision in Black Sea Steamship Line v. Minerals and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign jurisdiction clause should invariably be enforced as. Always binding on the parties thereto. We do not think that such a view may necessarily hamper or obstruct or impede international trade. (iii) Messrs. Lakshminarayan Ramniwas v. Lloyd Triestino Societa per Azinni Di Navigazione Sede in Triesta AIR 1960 Cal 155 The plaintiff is an Indian merchant. He placed an order for certain bundles of Mild Steel Round bars with certain Italian shippers. The Italian shippers shipped those goods under three bills of lading. The goods were shipped by S.S. Alga, a steamship belonging to the first defendant Messrs. Lloyd Triestino Societa per Azinni Di Navigazione Sede in Triesta. The goods were to be conveyed from Italy to the port of Calcutta. The steamship S. S. Alga duly arrived at the port of Calcutta. The plaintiff alleged that 22 bundles of the goods were short-landed. In support of its contention, it relied on a short-landing certificate issued by the Commissioner for the port of Calcutta. The plaintiff as a holder of the three bills of lading instituted a suit against the steamship company, defendant No. l. as also its agents, Messrs. Turner Morrison and Co., Private Ltd., def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had undoubted jurisdiction to try the suit. The jurisdiction of the Court to try such a suit is vested in it by the Letters Patent and by the Constitution. Parties cannot by a private agreement, whether such agreement has been entered into in India or outside India, take away a jurisdiction which is vested in this Court to try the suit just as the parties could not by such agreement confer upon it jurisdiction to try. Clause 31 of the contract remains valid as a contractual stipulation, but it cannot be pleaded as a bar to the jurisdiction of the Court. When the attention of the court in which the suit is instituted is drawn to a contractual stipulation of this kind, the Court may in the exercise of its discretion stay its hands and refuse to try the suit until the competent judicial authority to whose decision the parties have agreed to submit their disputes has pronounced its decision. The Court acts upon the principle that in general the Court will compel the parties to abide by their contracts. Instead of driving the defendant to a separate suit to enforce the covenant, the court may for the purpose of preventing multiplicity of litigation enforce the contract summarily on an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of the award being sent to the parties and a decree in terms of the award being passed. In the context of the facts, though the judgment in that case had been delivered by Balakrishna Ayyar, J., yet Howell, J., concurring with his brother Judge, minute his views, which may usefully be referred to here: I have had the advantage of reading the judgment that my learned brother is about to deliver and respectfully agree with its reasoning. It seems to me that much of the difficulty that has arisen in this and similar cases is due to the overlooking of the fact that S. 2(c) of the Act merely defines the word court and that if one has to decide which of the courts satisfying the definition of the word court'', in S. 2(c) is the court in which the award has to be filed, one must look to S. 31(1) and that Section alone. S. 2(c) does not purport to prescribe the court in which the award should be filed. It restricts the meaning of the word court to the class of civil, courts that can decide the questions forming the subject-matter of the reference if they had arisen in a suit properly before the court. The difficulty in the construction of this section arises only from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 of the tender provided for arbitration in case of dispute. Clause 13 provided that notwithstanding the place where the work under the contract was to be executed, the contract shall be deemed to have been entered into by the parties at Bombay and the Court at Bombay alone shall have jurisdiction to adjudicate thereon. On disputes arising between the parties the appellant submitted a petition to the court at Varanasi for an order under S. 20 of the Arbitration Act, 1940 that the agreement be filed and an order of reference be made to an Arbitrator or arbitrators appointed by the court. The respondent contended that in view of clause 13 of the arbitration agreement only the Courts at Bombay had jurisdiction. The trial court held that the entire cause of action had arisen at Varanasi and the parties could not by agreement confer jurisdiction on the courts of Bombay which they did not otherwise possess. The High Court at Allahabad in exercise of its re-visional jurisdiction held that the courts at Bombay had jurisdiction under the general law and hence could entertain the petition. It further held that in view of clause 13 of the arbitration agreement, the petition could not be ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of evidence before Court as respects the existence, validity or otherwise, of the contract containing arbitration clause, which is the pivot or fulcrum, on which the other questions of balance of convenience and jurisdiction of foreign court or tribunal which has otherwise no jurisdiction hinge or rotate and even on the assumption that there was a contract containing an arbitration clause, as stated by the American Company, there is emergence of non-application of mind in all splendors on all those aspects of the matter and in such state of affairs, the best course to be adopted is to remit the matter back to learned single Judge to consider afresh the whole matter, by giving adequacy of opportunities to the parties to let in evidence, oral and documentary, as respects the proof or otherwise of the existence or validity of the contract containing arbitration clause and other matters involving balance of convenience of parties and jurisdiction of foreign court or tribunal and arrive at a decision in the light of the principles evolved by various judicial pronouncements referred to above and other precedents, if any, that could be relied upon by the parties before him. In fine, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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