TMI Blog2019 (7) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 11(6) of the Act. Since only Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order is liable to be set aside. Appeal allowed - decided in favor of appellant. - CIVIL APPEAL NO. 5850 2019 ( Arising out of SLP ( C ) No. 15672 of 2019 ) - - - Dated:- 25-7-2019 - R. Banumathi And A. S. Bopanna, JJ. JUDGMENT R. BANUMATHI, J. Leave granted. 2. Whether the Madras High Court could exercise jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 despite the fact that the agreement contains the clause that venue of arbitration shall be Bhubaneswar, is the question falling for consideration in this appeal. 3. Brief facts which led to filing of this appeal are as under:- The appellant entered into an agreement with the respondent for sale of 40,000 WMT (Wet Metric Tonne) of Iron Ore Pellets on FOB terms and payment was to be made by Letter of Credit in Bhubaneswar. The loading port was Dhamra Port, Bhadrak, Odisha and destination was Chennai/Ennore Ports, Tamil Nadu. Dispute arose between the parties regarding the price a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited and others (2017) 7 SCC 678, Union of India v. Hardy Exploration and Production (India) Inc. (2018) 7 SCC 374 and other judgments. It was contended that the High Court erred in holding that clause (18) of the agreement does not outst the jurisdiction of the courts other than the courts at the Seat of arbitration at Bhubaneswar. The learned counsel submitted that the High Court erred in not applying the ratio of Indus Mobile wherein the Supreme Court held that in case of domestic arbitration where the parties have agreed at the Seat of arbitration, the said court will have exclusive jurisdiction. 7. Per contra, the learned counsel for the respondent submitted that since cause of action arose at both the places i.e. Bhubaneswar and Chennai, both Madras High Court as well as Orissa High Court will have supervisory jurisdiction. Reliance was placed upon para No. (96) of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552. It was submitted that in domestic arbitration, unless the parties tie themselves to an exclusive jurisdiction of the court in the agreement, mere mention of venue as a place of arbitration will not confer exclusive juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In BALCO, the issue arose before the Constitution Bench was as to whether in international commercial arbitrations whose juridical or legal Seat of arbitration was outside India whether the provisions of Part-I of the Act would be applicable for grant of relief as held in Bhatia International v. Bulk Trading S.A. and another (2002) 4 SCC 105. The Constitution Bench in BALCO held that if the legal or juridical seat of arbitration is outside India, then Part-I of the Arbitration and Conciliation Act, 1996 shall be inapplicable to such arbitrations; and even in case a clause in the arbitration agreement purports to apply Part-I of the 1996 Act to an arbitration where the juridical seat of arbitration is outside India, Part-I shall be inapplicable to the extent inconsistent with the arbitration law of the seat of arbitration. Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552. 11. In BALCO, the court highlighted the distinction between the Seat and Venue in the context of Section 20(3) of the Act. Section 20(3) of the Act allows the parties to hold meetings, proceedings and hearings at any place agreed by the parties. In BALCO, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t / place of arbitration being in India - would Part I of the Arbitration Act, 1996 be applicable. If the agreement is held to provide for a seat / place outside India, Part I would be inapplicable to the extent inconsistent with the arbitration law of the seat, even if the agreement purports to provide that the Arbitration Act, 1996 shall govern the arbitration proceedings. 12. As pointed out earlier, Section 2(1)(e) of the Act defines the Court with reference to the term subject-matter of the suit . As per Section 2(1)(e) of the Act, if the subject-matter of the suit is situated within the arbitral jurisdiction of two or more courts, the parties can agree to confine the jurisdiction in one of the competent courts. In para (96) of BALCO, the Supreme Court held that the term subject-matter in Section 2(1)(e) of the Act is to identify the court having supervisory control over the arbitral proceedings. The Supreme Court held that the provisions in Section 2(1)(e) of the Act has to be read in conjunction with Section 20 of the Act which give recognition to the autonomy of the parties as to place of arbitration . The observations in para No. (96) in BALCO pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasions, agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. In such circumstances, it was observed that the two courts would have jurisdiction that is the court within whose jurisdiction subject-matter of the suit is situated and the court within the jurisdiction of which the dispute resolution i.e. the venue of arbitration is located. 13. As per Section 20 of the Act, parties are free to agree on the place of arbitration. Party autonomy has to be construed in the context of parties choosing a court which has jurisdiction out of two or more competent courts having jurisdiction. This has been made clear in the three-Judges Bench decision in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. (2013) 9 SCC 32. In the said case, respondent-Indian Oil Corporation Limited appointed M/s. Swastik Gases (P) Ltd. situated at Jaipur, Rajasthan as their consignment agent. The dispute arose between the parties as huge quantity of stock of lubricants could not be sold by the applicant and they could not be resolved amicably. In the said matter, clause 18 of the agreement between the parties provided that the agreement shall be subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like alone , only , exclusive or exclusive jurisdiction have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties-by having Clause 18 in the agreement- is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Bench of the Supreme Court has already done by way of construction of the Act. 19. A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to seat is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of CPC be attracted. In arbitration law however, as has been held above, the moment seat is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. 20. It is well settled that where more than one c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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