In the attached judgment the issue which fell for consideration before the Hon’ble Delhi High Court was whether the instant section 34 application filed under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) would lie before the Delhi High Court in view of the exclusive jurisdiction clause, in spite of the fact that arbitration proceedings were held in Mumbai

Facts in brief

The stand taken by the Respondents was that since the arbitration was conducted under the Rules and Bye-Laws of the Cotton Association of India (“CAI”) and the proceedings were held in CAI’s office in Mumbai hence the courts in Mumbai would have jurisdiction to entertain the challenge to the award. This was countered by the petitioners by stating that the contract, out of which the arbitration arose, has an exclusive jurisdiction clause which vests jurisdiction in the Courts in Delhi and furthermore Delhi has the “closest and most intimate connection” with the dispute.

Judgment and Analysis

It was observed by the Hon’ble Delhi High Court that, “The jurisdiction clause here uses the words “alone” and “exclusive jurisdiction” for Courts in Delhi, “to deal with any matter arising out of arbitration proceedings or the award”. This is clear and categorical that Courts in Delhi alone will have jurisdiction, not in respect of general disputes arising out of the contract, but in respect of the arbitration proceedings and the award. To this extent, the clause is unusual, but reflects the intention of the parties, at the time of execution of contract.”

It was further observed that, “While the Rules and the By-laws of the CAI are applicable for the purpose of appointing of the tribunal, for holding of the proceedings and other procedural matters, the contract clearly expresses the intention of the parties to vest exclusive jurisdiction in Delhi Courts, for any issues arising out of the arbitration proceedings or the award. This clause brooks no ambiguity or vagueness. Thus, unlike a court jurisdiction clause, the parties clearly vested the Courts in Delhi with supervisory jurisdiction over the arbitral proceedings. The venue cannot change the intention of the parties to vest the Courts in Delhi with exclusive jurisdiction.”

It was finally held that, “When words such as “alone” and “exclusive” are used, they express a clear and unambiguous intention between the parties, which cannot be overlooked by considering the By-laws and Rules of the CAI.”