In the instant case the issue which fell for consideration before the Hon’ble Madhya Pradesh High Court was whether the in light of the clause which talks only about the venue, which being Allahabad, the jurisdiction of the court is ousted to entertain the application and also in the absence of prescription of any “seat” how the jurisdiction of the court can be traced.
Facts in brief
The dispute pertains to clause 1.2.54 (k) of the agreement entered into between the parties. The said clause is as follows:
“VENUE- The Venue for an arbitration shall be the place from which the letter of acceptance of tender is issued or such other place as the purchaser at his discretion may determine.”
An application under section 11(6) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) was filed and it was opposed by the respondents on the ground that the Hon’ble Madhya Pradesh High Court does not have jurisdiction to entertain the application given the fact that the clause talks about ‘venue’ and makes it clear that venue for the arbitration shall be the place from which the letter of acceptance of tender is issued (Allahabad). The applicants contended that the entire cause of action has arisen within the territorial jurisdiction of the court except the event of issuance of ‘letter of acceptance’.
Judgment and Analysis
The Hon’ble Madhya Pradesh High Court observed that, “…"venue" and "seat" cannot be treated as synonymous. The definition in Clause (k) makes it clear that a "venue" is initially fixed to be at the place from where letter of acceptance was issued by leaving its further fixation/change as per discretion of the purchaser. The "venue" can be altered and fixed as per the convenience of the parties in terms of enabling clause in the agreement. This can be done for various reasons/purposes such as recording of evidence, facilitating the hearing at a particular place etc. Thus, "venue" cannot be read as a "seat" in the present case.
The Court noted that, in absence of specification of where the ‘seat’ of the arbitration is, specification of ‘venue’ would not exclude the jurisdiction of other courts, which may have jurisdiction basis cause of action. It noted as follows:
14. In the instant case, the parties have not pointed out any clause of agreement which prescribes the "seat" of arbitration. Hence, as per the judgment of Balco (supra), it can be safely concluded that since the act intends to give jurisdiction to two Courts which includes the Court which would have jurisdiction based upon cause of action, this Court will have jurisdiction because accept issuance of letter of acceptance, other necessary events which gives cause of action have taken place within the territorial jurisdiction of this Court…..
17. In view of foregoing analysis, this Court is unable to hold that "venue" will determine the question of jurisdiction of this Court or despite availability of cause of action, which has arisen within the territory of this Court, this Court will have no jurisdiction to entertain this application. ….
Download Pdf
7A, 7th Floor, Tower C, Max House,
Okhla Industrial Area, Phase 3,
New Delhi – 110020
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.