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TMI Blog2015 (8) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... Suit against the Defendants by contending that the cause of action for filing the Suit arose when then Plaintiff and the First Defendant collaborated on the distribution of the First Defendant's products in India and in Nepal, specifically in Chennai, pursuant to the International Distributorship Agreement and Dealer Agreement, both dated 01.12.2010 and the Settlement Agreement, dated 30.03.2013. 3. It is the case of the Plaintiff that substantial part of cause of action arose in Chennai, as all the above said Agreements were executed in Chennai and the payments due to the Plaintiff were credited to the Plaintiff-Company's Bank only in Chennai, including the payments under each of the above Agreements as well as the payments made pursuant to Clauses 2 & 3 of the Settlement Agreement. It is their further case that part of performance of contract took place in Chennai, where the products of the Defendants were distributed to 12 Hospitals in Chennai. It is, thus, contended that only in Chennai, the Plaintiff-Company issued instructions to their Bank(s) to stop RTGS transfer to the Second Defendant-Company, which was the trigger for Arbitration, and therefore, substantial part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available only in USA. Thus, the Suit is not maintainable. 6. Mr. Sathish Parasaran, learned Counsel appearing for the Applicants made his submissions. A written submissions also is filed on behalf of the Applicants. The sum and substance of the submissions made on behalf of the Applicants are as follows: "The Plaintiff and the First Defendant initially entered into an Agreement dated 25.11.2008 for the distribution of the products of the First Defendant in India. Thereafter, they executed two Agreements viz., an International Distributorship Agreement dated 01.12.2010 and a Dealer Agreement dated 06.12.2010. The effective date of both the Agreements was 01.01.2011. Under both the Agreements, the First Defendant was entitled to assign the Agreement without the consent of the Plaintiff. The Plaintiff and the First Defendant indemnified each other's "affiliated Companies" for any breach of warranties or failure to comply with any material provisions of these Agreements. The parties agreed that the governing law to be Laws of Massachusetts, USA and International Arbitration Rules of the International Centre for Dispute Resolution ("ICDR") and that the seat of Arbitration was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the most appropriate forum is Arbitration in Massachusetts; the Plaintiff is not seeking to challenge the Arbitration Clause and as such, it would be binding on them; the Arbitration Agreement is 'unconscionable'. Even if a part of clause in the Arbitration Agreement is unworkable as contended by the Plaintiff, the Court can severe the particular clause so that the rest of the clause can be acted upon; all the three Agreements between the parties are purely governed by the laws of commonwealth of Massachusetts, USA.; the Defendants are not personally amenable to the jurisdiction of this Court and therefore, this Court does not have any "in personam jurisdiction" over the dispute; the relief sought for in the Suit is in the nature of an anti-arbitration/anti-suit injunction. The Court would grant an order in the nature of an anti-suit injunction only if the Defendant is amenable to the personal jurisdiction of this Court; the cause of action as pleaded in the Plaint fails to elucidate any part of the material cause of action arose within the jurisdiction of this Court; mere signing of the Agreement by the Plaintiff and deposit of funds at the Plaintiff's place of reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hennai, the balance of convenience should not be against the Plaintiff. For the purpose of deciding the balance of convenience at this stage, presumption is that the Arbitration Clause is void as it is only the averments that can be looked into. When the Defendants have been carrying numerous activities within the forum, they cannot take the stand that the forum is a forum non-conveniens and presumption is in favour of the Plaintiff in view of the principle that the Plaintiff is the dominus litis and also in view of the provision contemplated under Section 9 of the Code of the Civil Procedure." 10. The existence of the personal jurisdiction is a test for grant of anti-injunction and would not act as a jurisdiction bar while deciding the Application for leave to sue. Moreover, the question as to whether this Court has personal jurisdiction over the Defendant is a question of fact which cannot be determined purely on the basis of whether the Defendant is residing outside the jurisdiction. Thus, it is a matter for trial. The Defendants ought to have sufficient activities in the foreign state viz., India and the present cause of action arises out of one such activity. Moreover, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner proceeding or continuing with the Arbitration proceedings initiated by the Defendants, vide Notice of Arbitration, dated 08.04.2015." 15. As both the Defendants are located outside the jurisdiction of this Court, the Plaintiff sought leave in Application No. 3075 of 2015 to sue the Defendants before this Court filed under Clause 12 of the Letters Patent. It was contended by the Plaintiff in the said Application that the substantial part of cause of action arose in Chennai as all the Agreements including the Dealer Agreement dated 01.12.2010, International Distributorship Agreement dated 01.12.2010, Settlement Agreement dated 31.03.2013 were executed at Chennai and that payments due to the Applicant/Plaintiff were made into their bank in Chennai; that the part of performance of contract took place in Chennai where the products of the First Defendant were distributed to 12 Hospitals in Chennai. It was further contended therein that all the oral negotiations took place in Chennai, more particularly, the discussions on fifth and sixth November 2014 had taken place at Chennai. It is further contended that a sum of ` 8.5 crores was deposited by the Defendants into the Plaintiff' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of leave under Clause 12, the Plaint is the most material document on which the decision should rest although such decision does not rest merely on a criticism of the pleading. The Petition and the Affidavit in support of and against the revocation of leave are relevant, but must be read subject to the overriding considerations and facts pleaded in the Plaint. It is not unusual that in such Petition and Affidavits the Plaintiff and the Defendant are prone to overstate their respective cases for and against the leave, and such over-statement should be toned down by reference to the Plaint." 19. Thus, to decide the question as to whether this Court has jurisdiction to entertain the Suit, the Plaint has to be read as a whole and while doing so, this Court need not make an elaborate enquiry as to the correctness or otherwise of the facts pleaded by the Plaintiff. At this juncture, it is useful to refer to the decision of the Division Bench of this Court reported in U.P. Cricket Association v. B.C.C.I., 2012 (5) MLJ 276, wherein at Paragraph No. 16, it is observed as follows: "16. In order to consider whether High Court Original Side has jurisdiction to entertain the Suit, the Plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil jurisdiction, is empowered to receive, try and determine suits of every description if the cause of action shall have arisen either whole or in part and the Defendant at the time of commencement of the Suit shall dwell or carry on business or personally work for gain within its jurisdiction. However, if the cause of action shall have arisen in part, the leave of the Court should be obtained first, for this Court to exercise its Ordinary Original Civil jurisdiction to receive, try and determine such suits. Likewise, if the Defendants are not residing within the jurisdiction, and however if the cause of action either in part or whole has arisen within the jurisdiction against those Defendants, then again, the leave has to be obtained first against those Defendants, who are residing outside the jurisdiction or carrying on business outside the jurisdiction for this Court to exercise its Ordinary Original Civil jurisdiction as against those Defendants. Therefore, the material consideration for this Court, while deciding the Application under Clause 12, is the Plaint averments and the averments made in the Affidavit filed in support of such Application seeking leave to sue. It is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d based on the contentions raised by the Defendants. 24. Before answering the above said issue, it is better to understand as to what is the real dispute between the parties, in a nutshell, which is as follows: "The Suit itself is filed challenging the Notice of Arbitration dated 08.04.2015 as null and void and being contrary to Indian Law and for Permanent Injunction restraining the Defendants in any manner proceeding or continuing with the Arbitration proceedings initiated by the Defendants through Notice of Arbitration dated 08.04.2015. The Plaintiff and the First Defendant entered into an International Dispute Agreement and Dealership Agreement both dated 01.12.2010 for the purpose of distributing Medical Equipments in India and Nepal. It is the case of the Plaintiff that majority of the distribution pursuant to the above said Agreements was carried out in India including many hospitals in Chennai. Admittedly, both the Agreements were executed in Chennai and the payments under those Agreements were made into the Plaintiff's bank account in Chennai. During the course of performance of these Agreements, some dispute arose between the parties resulting in termination of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Settlement Agreement, the same cannot be permitted since the Settlement Agreement does not have an Arbitration Clause and the Arbitration Clause contained in the Dealer Agreement and International Distributorship Agreement did not stand incorporated into the Settlement Agreement. Therefore, it is their contention that in the absence of specific Arbitration Clause in the Settlement Agreement, the Defendants cannot drag the Plaintiff to the Arbitration proceedings initiated at Massachusetts, U.S.A., by issuing the impugned Arbitration Notice dated 08.04.2015." 25. Thus, the perusal of all the above contentions would show that the crux of the issue in the main Suit is as to whether the Settlement Agreement dated 30.03.2013, in effect stipulates for resolving disputes between the parties to such Agreement through Arbitration proceedings and whether the recitals of such Agreement in an unequivocal terms and without any ambiguity make the parties for such reference with certainty. Certainly, consideration of such issue is possible only after conducting the trial, as it involves not only the interpretation of several clauses relating to the present dispute in all the three Agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances would show that the substantial part of cause of action for the Plaintiff to file the present Suit has undoubtedly arisen within the jurisdiction of this Court as against the Defendants, even though they are situated outside the jurisdiction of this Court. 29. It is the contention of the Defendants that the Settlement Agreement specifically stipulates that all the disputes are to be decided in Massachusetts, U.S.A. In so far as this contention is concerned, I am of the view that when the Plaintiff questions the very existence or applicability of an Arbitration Clause in the Settlement Agreement and when such an issue is to be gone into and decided only after the conduct of trial, more particularly, when it involves the interpretation of certain clauses in the above said Agreement, the above contention raised by the Defendants cannot be gone into at this stage, that too, while considering the Application under Clause 12 of the Letters Patent. (ii) The next contention of the Defendants is that both the Defendants are not amenable to the Personal jurisdiction of this Court. I am not able to accept the above said contention, since the leave under Clause 12 is sought only b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple of comity respect for the Court in which the commencement or continuance of action/proceeding is sought to be restrained - must be borne in mind. (2) In a case where more forums than one are available, the Court in exercise of its discretion to grant Anti-Suit Injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant Anti-Suit Injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens. (3) Where jurisdiction of a Court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the Court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the Court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case. (4) A Court of natural jurisdiction will not normally grant Anti-Suit Injunction against a Defendant before it where parties have agreed to submit to the exclusive jurisdiction of a Court including a Fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in in regard to action in English Court. Based upon the above said facts, the Apex Court has observed that in exercising discretionary power to grant an Anti-Suit Injunction, the Court must be satisfied that the Defendant is amenable to the Personal jurisdiction of the Court. First of all, the above decision deals with grant of Anti-Suit Injunction in respect of parties who have admittedly entered into a contract containing a non-exclusive clause of English Court. Here, in this case this Court at this stage is not required to go into the question as to whether the Plaintiff is entitled to anti-injunction as prayed for in the Suit or not. Moreover, the contention of the Plaintiff is that the Settlement Agreement does not contain Arbitration Clause. Therefore, this Court has to first decide, in the main Suit, as to whether the terms of the Settlement Agreement is to be construed of having an Arbitration Clause, by appreciation of evidence. When that being the position, I do not think that the above decision of the Apex Court is helping the Defendants in any manner. 32. Martin Cashin v. Peter J. Cashin, AIR 1938 PC 103 and Man Roland Druckimachinen AG v. Multicolour Offset Ltd., 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r revocation thereof, the appropriateness or suitability of the forum would be material and to that extent, principle akin to forum conveniens would apply." In this case, the facts and circumstances would reveal that the present forum viz., this Court is the appropriate forum convenient to the Plaintiff as substantial part of the cause of action has arisen within the jurisdiction of this Court between the parties. 34. Hansraj Nayyar Medical India v. Smith Medical International Limited, is relied on by the Defendants to contend that there is no cause of action for the Plaintiff to file the present Suit before this Court. In the case before the Bombay High Court, the Plaintiff therein contended that the cause of action arose at the place where the impugned proceeding were sought to be served on the Plaintiff seeking an Anti-Suit Injunction. Therefore, the Bombay High Court rejected such contention by observing that no principle authority was cited for the said proposition. In this case, the contention of the Plaintiff is not as contended before the Bombay High Court. The facts and circumstances of the present case are totally different and therefore, the above said decision is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Para 25 of the report that the statement in the Plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7, Rule 11, CPC. The principle is, therefore, well settled that in order to examine whether the Plaint is barred by any law, as contemplated by Clause (d) of Order 7, Rule 11, CPC, the averments made in the Plaint alone have to be seen and they have to be assumed to be correct. It is not permissible to look into the pleas raised in the Written Statement or to any piece of evidence. Applying the said principle, the plea raised by the contesting Respondents that the Company Petition was barred by limitation has to be examined by looking into the averments made in the Company Petition alone and any Affidavit filed in reply to the Company Petition or the contents of the Affidavit filed in support of Company Application No. 113 of 1995 filed by the Respondents seeking dismissal of the Company Petition cannot at all be looked into." I have already pointed out that the principle applicable to Order 7, Rule 11(a), CPC is to be applied while considering the Application under Clause 12 of the Letters Patent. In the above said decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, a Suit can be filed in a Court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a Suit in respect of the breach can always be filed at the place where the contract should have been performed or its performance completed. If the contract is to be performed at the place where it is made, the Suit on the contract is to be filed there and nowhere else. In Suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the Suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the Court where the Suit is filed and that contract is found to be invalid, such part of cause of the action disappears The above are some of the connecting factors." (emphasis supplied) 38. In (India TV) Independent News Service Pvt. Ltd. v. India Broadcast Live LLC and others, 2007 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Foreign Court or Foreign Law must not assume jurisdiction to restrain Arbitration proceedings at Singapore. On the other hand, as has been rightly submitted by Mr. Subramanium, under Section 9 of the CPC, the Courts in India have jurisdiction to try all Suits of a Civil nature excepting Suits of which cognizance is either expressly or impliedly barred. Thus, the appropriate Civil Court in India has jurisdiction to entertain the Suit and pass appropriate Orders in the Suit by virtue of Section 9 of the CPC and Clause 9 of the Facilitation Deed providing that courts in Singapore or any other Court having jurisdiction over the parties can be approached for equitable relief could not oust the jurisdiction of the appropriate Civil Court conferred by Section 9 of the CPC." In the above decision, the Hon'ble Supreme Court has categorically found that Courts in India have jurisdiction to try all Suits of Civil nature under Section 9 of the Code of Civil Procedure excepting Suits which are either expressly or impliedly barred. Perusal of the facts of that case before the Apex Court would show that a similar Anti-Injunction Suit filed before Bombay High Court was opposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement of disputes by Arbitration), then, the terms of the referred contract in regard to execution/performance alone will apply, and not the Arbitration Agreement in the referred contract, unless there is special reference to the Arbitration Clause also. (iv) Where the contract provides that the standard form of terms and conditions of an independent Trade or Professional Institution (as for example the standard terms and conditions of a Trade Association or Architects Association) will bind them or apply to the contract, such standard form of terms and conditions including any provision for arbitration in such standard terms and conditions, shall be deemed to be incorporated by reference. Sometimes the contract may also say that the parties are familiar with those terms and conditions or that the parties have read and understood the said terms and conditions. (v) Where the contract between the parties stipulates that the conditions of contract of one of the parties to the contract shall form a part of their contract (as for example the general conditions of contract of the Government where the Government is a party), the Arbitration Clause forming part of such general conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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