The applicant is wholly owned subsidiary of
Solentanche-Freyssinet Group, and is dealing in mechanically
stabilized Reinforced Earth Retaining Walls/Precast Arch
Structures, etc.
The 2nd respondent which was formerly known as
Maytas Infra Limited was awarded a contract, dated 29th February,
2008, for construction of boundary walls, roads, drains and earth
filling, by Bangalore Metro Rail Project at Bayappanhalli Depot,
Bangalore.
Thereafter, on 28th March, 2008, it, having faced
difficulties in completing works of the principal contract as per
schedule, entered into a sub-contract with the applicant for the
works of construction of reinforced earth retaining wall of the main
contract on back to back basis.
Thereafter, tripartite agreement
was executed on 3.6.2009 amongst the applicant on one hand and
the respondents 1 & 2 on the other hand.
By this tripartite
agreement, it was agreed mutually that all the bills, including taxes
for materials supplied and services provided by the applicant
settled till 28th February, 2009 would be raised and submitted to
the 2nd respondent on 1st March, 2009 and to be paid by the 1st
respondent.
In
the contract dated 28.03.2008 the parties thereto by its clause-12
agreed to resolve the disputes arising out thereof of by the
mechanism of arbitration and the venue of the same would be in
Hyderabad only.
Since by the tripartite agreement this arbitration
clause has also been accepted and incorporated therein, all the
parties to the tripartite agreement are bound by it.
In spite of
making request to both the respondents for invoking arbitration
clause, no steps have been taken for appointment of arbitrators.
raised question of jurisdiction = the principal Civil Court locating in Hyderabad cannot be
a Court within the meaning of Section 2 (1) (e) of the aforesaid Act as no part of cause of action has arisen nor the respondents are having place of business within the territorial limit of this State.
It would appear from said tripartite agreement that the same was executed and entered into at Bangalore.
Works in terms of the contract is to be executed at Bangalore.
Hence, performance of tripartite agreement has to be done in Bangalore.
Nothing has happened in Hyderabad except the 2nd respondent is having his place of business at Hyderabad.
High court held that
It is settled position of law that
by agreement of the parties jurisdiction cannot be conferred upon any Court which does not have under law.
In any view of the matter, this forum selection clause is not sought to be enforced by the applicant.
Much emphasis has been placed to take benefit of clause-12 quoted above read with judgment of Constitution Bench.
The Supreme Court in case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (1 supra)
as per Judgment, it appears that under the Arbitration and Conciliation Act, 1996 two courts will have jurisdiction to deal with the matter;
one is natural forum, which would have jurisdiction
under Section 2 (1) (e) of the aforesaid Act, and
another one within whose jurisdiction arbitration takes place.
the Legislature mindfully clarified by making a provision in clause (b) of sub-section (12) of Section 11 read with Section 2 (1) (e) of the Act, 1996.
It would appear that provision of Section 2 (1) (e) of the Act,
1996 has been adopted by clause (b) of sub-section (12) of Section 11 by way of reference not by way of incorporation.
Therefore, Chief Justice or designated person or institution has to be construed strictly as being only one of the High Court within whose jurisdiction principal Civil Court is situated and which could have decided the matter, if the same had been the subject matter of
a suit, not any other High Court Chief Justice. Logically, jurisdiction of principal Civil Court has to be traced from the provisions of Sections 16 to 20 of the Code of Civil Procedure only.
Moreover, even if, for arguments sake, above statement of law in paragraph-96 of the judgment is applied, the Constitution Bench has not ruled out applicability of the concept of forum conveniens.
I find here, applying this principle, nothing has taken
place in Hyderabad.
Admittedly, the agreement has been made and entered into at Bangalore, works which are to be performed in terms of bipartite agreement initially, now tripartite one at Bangalore, and performance and non-performance therefore, necessarily will take place at Bangalore.
It is however argued that I can entertain this application by virtue of clause (b) of Section 20
of Code of Civil Procedure as one of the respondents carries on business at Hyderabad.
This provision cannot be invoked having regard to approach of the application wherein seat of arbitration being Hyderabad is sought to be asserted, and no leave as required under clause (b) of Section 20 of C.P.C. has been asked for.
In view of discussion, as above, no answer is called for as far as third question is concerned.
In view of discussion above, I dismiss this application with liberty to file before appropriate Honble Chief Justice or designated Judge, as the case may be, of the High Court. -2015 A.P.MSKLAWREPORTS
