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Sunday, May 3, 2015

Territorial Jurisdiction - Suit based on Contracts

Sections 23 & 28---Indian Contract Act--Parties to contract agree to submit dispute to the jurisdiction of a particular court--Interpretation of clauses of such co n- tract-Ouster clause II--Interpretation and constructi on of--In particular:
Section 9--Civil Procedure Code-Civil court--Jurisdi c- tion-Ouster of--Interpretation of clauses of contract.
Statutory Interpretation 'Ouster clause '--Construction of .
Words and Phrases 'Ex dolo malo non orit ur actio'--'expressio unus est exclusio alterius'--meaning of .
Held 
That an agreement to oust absolutely the jurisdi c- tion of the court will be unlawful and void being again st the public policy, Ex-dolo malo non oritur actio. [6G] The jurisdiction of the court in the matter of a co n- tract will depend on the situs of the contract, and t he cause of action arising through connecting factors. [7B-C] So long as the parties to a contract do not oust t he jurisdiction of all the courts which would otherwise ha ve jurisdiction to decide the cause of action under the law, it cannot be said that the parties have by their contra ct ousted the jurisdiction ofthe court. [8G] Where the parties to a contract agreed to submit t he disputes arising from it to a particular jurisdiction whi ch would otherwise also be a proper jurisdiction under the la w, their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as again st public policy. If on the other hand the jurisdiction th ey agree to submit to would not otherwise be proper, jurisdi c- tion to decide disputes arising out of the contract it mu st be declared void being against public policy. [8H; 9A-B] Where there may be two or more competent courts whi ch can entertain a suit consequent upon a part of the cause of action having arisen there-within if the parties to t he contract agreed to vest jurisdiction on one such court to try the dispute which might arise as between themselves t he agreement would be valid. If such a contract is clea r, unambiguous and explicit and not vague, it is not hit by sections 23 & 28 of the Contract Act. This cannot be unde r- stood as parties contracting against the Statute. Mercanti le Law and Practice permit such agreements. [11B-C] 3 Where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other court s.
When the clause is clear, unambiguous and specific accept ed notions of contract would bind the parties and unless t he absence of ad idem can be shown the other courts shou ld avoid exercising jurisdiction. As regards construction of the ouster clause, when words like 'alone', 'only' 'excl u- sive', and the like have been used, there may be no diff i- culty. Even without such words in appropriate cases t he maxim "expressio unius est exclusio alterius'-expression of one is the exclusion of another may be applied. What is an appropriate case shall depend on the facts of the case.
In such a case mention of one thing may imply exclusion of another. Where certain jurisdiction is specified in t he contract, an intention to exclude all others from its oper a- tion may in such cases be inferred. It has therefore to be properly construed. - 2015 S.C.(1989) MSKLAWREPORTS

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