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TMI Blog2024 (6) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... n the petition under Section 34 the Arbitration Act, in view of an exclusive jurisdiction clause contained in the agreement between the parties therein, which was read as providing for exclusive jurisdiction of the Courts at New Delhi. This judgment has been followed by the Division Bench in IRCON INTERNATIONAL LIMITED. VERSUS PIONEER FABRICATORS PVT. LTD. [ 2023 (3) TMI 1494 - DELHI HIGH COURT] . In the said case also, the concerned MSME Facilitation Council was located outside Delhi, but the agreement between the parties conferred exclusive jurisdiction upon the Courts in Delhi. The aforesaid judgments of the Division Bench are applicable in cases where parties agree to confer exclusive jurisdiction for supervision of the arbitration proceedings, upon a particular Court in their contract. Both the judgments proceed on the basis that the exclusive jurisdiction clause in the agreements between the parties, would not be overridden by conferment of jurisdiction upon a particular MSME Facilitation Council under Section 18 of the MSME Act. For the reasons stated above, it is concluded that, in the present Agreement, there is no exclusive jurisdiction clause. The aforesaid judgments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Council, which was rejected by an order dated 26.10.2020. By the impugned award, the Facilitation Council has awarded a sum of Rs. 4,11,55,845/- (inclusive of interest until the date of the award), to the respondent. It is undisputed that the Facilitation Council conducted its proceedings, and made its award, in Pathankot. B. Submissions of the Parties 4. At the outset, Mr. Sameer Chandwani, learned counsel for the respondent, takes an objection as to the territorial jurisdiction of this Court to entertain this petition, which is directed against an arbitral award made by the Facilitation Council in Pathankot. 5. Mr. Chandwani submits that Section 18(4) of the MSME Act, vests jurisdiction in a Micro and Small Enterprises Facilitation Council to act as an arbitrator or conciliator in disputes between a supplier located within its jurisdiction and a buyer located anywhere in India. It is submitted that the respondent herein, being the supplier, therefore, invoked arbitration before the Facilitation Council in Pathankot, where it is located, and Pathankot was the seat of the arbitration proceedings. 6. Mr. Chandwani also relies upon a judgment of the Kerala High Court in Shreyas Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction clause for the purposes of the present petition? Whether the seat of the arbitration was, in any event, in Delhi? 11. As far as the first aspect is concerned, it may be noted that the Agreement contains an arbitration clause [Clause 25 of the General Conditions of Contract ( GCC )] which is entitled, Settlement of Disputes Arbitration . It contains detailed provisions with regard to resolution of disputes between the parties, and provides for arbitration in the event they are not able to resolve their disputes in terms of the mechanism provided therein. The GCC does not contain an exclusive jurisdiction clause, nor is the seat of the arbitration stipulated. Clause 25, however, provides that the venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion . 12. Mr. Tripathy rests his arguments with regard to existence of an express exclusive jurisdiction clause, upon Article 7(1) of a document attached to the tender, entitled Integrity Pact . The Integrity Pact was to be signed by the bidder and was to be read as an integral part of the tender document and the Agreement between the parties. It contains certain commitments on part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction for the purposes of Section 34 of the Arbitration Act, in the context of arbitrations under the MSME Act. In Indian Oil Corporation [Supra (note 3).], the arbitral proceedings were conducted by the Maharashtra Facilitation Council at Thane. The Division Bench nevertheless held that this Court had jurisdiction to entertain the petition under Section 34 the Arbitration Act, in view of an exclusive jurisdiction clause contained in the agreement between the parties therein, which was read as providing for exclusive jurisdiction of the Courts at New Delhi. The reasoning of the Division Bench is contained in the following paragraphs: 20. In the present case, both the VENUE as well as the SEAT (by way of the jurisdiction clause) has been agreed to be at New Delhi. We, therefore, have no hesitation to say that the Courts at Delhi would have the jurisdiction to entertain the petition challenging the award passed by the MSME Council. Since the parties agreed to confer exclusive jurisdiction to Courts at New Delhi, notwithstanding the fact that the purchase order in question dated 10th March 2016, was issued by the Petitioner from its Vadodra Office to the Respondent at Navi Mumbai, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause No. 35 is New Delhi. As a result, in terms of the decision of the Supreme Court in Indus Mobile (supra), it would be the Courts at New Delhi that would have exclusive jurisdiction to entertain the petition under Section 34 of the Act. [Emphasis supplied] 17. This judgment has been followed by the Division Bench in IRCON International [Supra (note 4).]. In the said case also, the concerned MSME Facilitation Council was located outside Delhi, but the agreement between the parties conferred exclusive jurisdiction upon the Courts in Delhi. The Division Bench considered the judgments of the Supreme Court in BGS SGS SOMA JV v. NHPC [(2020) 4 SCC 234.], Hindustan Construction Co. Ltd. v. NHPC Ltd. [(2020) 4 SCC 310], Gujarat State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P) Ltd. [(2023) 6 SCC 401], and Silpi Industries v. Kerala SRTC [(2021) 18 SCC 790.], as well as the Division Bench judgment of this Court in Indian Oil Corporation [Supra (note 3).]. It agreed with the judgment of a learned Single Judge of the Bombay High Court, in Gammon Engineers Contractors (P) Ltd. v. Sahay Industries [2023 SCC OnLine Bom 750.], and disapproved of a judgment of this Court in Ahluwalia Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning jurisdiction on the basis of the cause of action. The Supreme Court s judgment in BBR (India) [Supra (note 5).], relied upon by him, also follows BGS SOMA [Supra (note 10).]. It, in fact, supports the case of the respondent herein, in holding that the seat court alone has jurisdiction to decide a petition under Section 34 of the Arbitration Act. The reference to cause of action was for the purposes of determining the court which a party may approach in anticipation of arbitration proceedings, by way of an application under Section 9 of the Arbitration Act. In fact, the Court, in BBR (India) [Supra (note 5).], held that Section 42 of the Arbitration Act would not confer jurisdiction in a court which had entertained a Section 9 application, if the seat of the arbitration had, in fact, been changed during the arbitral proceedings. 22. Although the judgment of the Kerala High Court in Shreyas Marketing [Supra (note 1).] was rendered in a writ petition, under Article 226 of the Constitution, Mr. Chandwani refers me to an observation in paragraph 7 of the judgment, that an award under Section 18 of the MSME Act, which is deemed to be an award under the Arbitration Act, can be challe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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