Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS THURSDAY, THE 14TH DAY OF JULY 2022 / 23RD ASHADHA, 1944 AR NO. 29 OF 2017 APPLICANT: KITCO LTD, FEMITH'S PUTHIYA ROAD, N.H. BY PASS, VENNALA, COCHIN - 682 028, REPRESENTED BY ITS JOINT GENERAL MANAGER AND AUTHORISED REPRESENTATIVE, JOSE DAVIS. BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.NITHIN GEORGE SRI.PAULOSE C. ABRAHAM RESPONDENTS: 1 RAMCO SYSTEMS LTD NO. 64, SARDAR PATEL ROAD, THARAMANI, CHENNAI - 600 113.
2 GAZAL INFORMATION TECHNOLOGY PVT LTD.,(CORRECTED) RZ-9, 2ND FLOOR, PALAM VIHAR, SECTOR - 6, DWARKA, NEW DELHI 110075. THE CAUSE TITLE OF THE A.R. NO. 29/2017 IS CORRECTED AS FOLLOWS, AS PER ORDER DATED 06.12.2021 IN I.A. NO. GAZELLE INFORMATION TECHNOLOGIES PVT LTD., CORPORATE OFFICE, 201C/6, SECOND FLOOR, CORPORATE PARK, D-21, DWARKA, NEW DELHI-110 075, INDIA. BY ADVS. SRI.ARUN THOMAS C.R.SYAMKUMAR SRI.ALPHIN ANTONY SRI.JENNIS STEPHEN SMT.MARIA ROY SRI.SANTHOSH MATHEW SRI.VIJAY V. PAUL SMT.VEENA RAVEENDRAN THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 14.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -:2:- Dated this the 14th day of July,2022
ORDER
The arbitration request is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in short, ‘Act’), to appoint an arbitrator to adjudicate the disputes that have arisen between the applicant and the respondents.
2. The applicant’s case, in brief, relevant for the
determination of the Arbitration Request(A.R.), is that, the applicant is a public sector undertaking. The applicant had entered into Annexure-A tripartite agreement with the respondents, to implement ERP Software at their office at Ernakulam. But, the respondents have abandoned the contract. As a dispute has arisen between the parties, the applicant had issued Annexure-B to the respondents. The -:3:- respondents have sent Annexures-C and D replies to Annexure-B. Hence, the applicant is constrained to invoke Clause 12 of Annexure-A which reads thus: “12. CONCILIATION & ARBITRATION
In the event of any controversy, difference or dispute arising out of or in the interpretation of any of the terms and conditions of this Agreement or on breach by either party, the non-breaching party shall bring the said reason to the notice of the breaching party, and shall amicably try to settle any such
issues within 30 days of such notice. In the event of the Parties
‘failure to reach an amicable settlement as mentioned herein, all unresolved controversies, disputes or differences whatsoever arising between the parties regarding this Agreement shall be referred to arbitration in accordance with The Arbitration & Conciliation Act, 1996 and the venue of arbitration shall be Chennai. Parties will endeavour to agree upon sole arbitrator, failing which each Party shall appoint its own arbitrator and the arbitrators so appointed shall appoint the third arbitrator who shall act as Presiding Arbitrator. The Arbitration shall be conducted in English language. The parties agree to abide by the Award of the Arbitrator(s).” [emphasis supplied]
3. Heard; Sri. Gopikrishnan Nambiar, the
learned counsel for the applicant, Sri. Santhosh -:4:- Mathew, the learned counsel appearing for the first respondent and Sri. Syamkumar, the learned counsel appearing for the second respondent.
4. Sri. Gopikrishnan Nambiar argued that the
applicant was constrained to invoke Clause 12 of Annexure-A and file the A.R., as the respondents had failed to amicably settle the dispute raised by the applicant in Annexure-B. Hence, a sole arbitrator may be appointed by this Court.
5. Sri. Santhosh Mathew opposed the A.R. and
contended that this Court lacks territorial jurisdiction to entertain the A.R., in the light of the law laid down by the Hon’ble Supreme Court in Bhrahmani River Pellets Limited v. Kamachi Industries Limited [(2020) 5 SCC 462] and BGS SGS Soma J V v. NHPC Limited [(2020) 4 SCC 234]. The above submission was reiterated and supported by Sri. Syamkumar. -:5:-
6. The point for consideration is whether this Court has the territorial jurisdiction to entertain the A.R.
7. Clause 12 of Annexure-A specifically states that the venue of the Arbitration shall be at Chennai.
8. In Bhrahmani River Pellets Limited v. Kamachi Industries Limited (supra), the Hon’ble Supreme Court has in Paragraph No. 16 held as follows:
“16. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the “venue” of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik, non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference.” [emphasis supplied]
8.1 Likewise, in BGS SGS Soma J V (supra),the -:6:- Hon’ble Supreme Court in Paragraph No. 82 has declared as follows:
82. On a conspectus of the aforesaid judgments, it
may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the "venue" of the arbitration proceedings, the expression "arbitration proceedings” would make it clear that the "venue" is really the "seat" of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as “tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue" which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat" of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held” at a particular venue would also indicate that the parties intended to arbitral proceedings to a particular place, signifying thereby that, that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue" and not the "seat"of the arbitral proceedings, would then conclusively show that such a clause designates a "seat” of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated,
-:7:- would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996, as applying to the "stated venue”, which then becomes the "seat" for the purposes of arbitration.” [emphasis supplied]
9. In the light of the above categoric exposition
of law by the Hon’ble Supreme Court and Clause 12 of Annexure-A, fixing the venue of Arbitration in Chennai, I hold that only the competent Court in Chennai has the jurisdiction to entertain the A.R. Hence, this A.R. is returned to the applicant for re-presentation before the proper Court in Chennai. Sd/- C.S.DIAS,JUDGE DST/14.07.22 //True copy/ P.A.To Judge -:8:- APPENDIX PETITIONER ANNEXURES: ANNEXURE A TRUE COPY OF THE AGREEMENT DATED 29.07.2015 EXECUTED BETWEEN THE APPLICANT AND THE RESPONDENTS. ANNEXURE B TRUE COPY OF THE NOTICE DATED 30.01.2017 ISSUED ON BEHALF OF THE APPLICANT TO THE RESPONDENTS. ANNEXURE C TRUE COPY OF THE REPLY NOTICE DATED 18.02.2017 ISSUED ON BEHALF OF THE 1ST RESPONDENT. ANNEXURE D TRUE COPY OF THE REPLY DATED 23.03.2017 ISSUED BY THE 2ND RESPONDENT TO THE APPLICANT’S NOTICE DATED 30.01.2017. RESPONDENT’S EXHIBITS: NIL