Exclusive jurisdiction clauses are valid where multiple courts have jurisdiction; Bombay courts could entertain the arbitration petition.

Where proceedings under the Arbitration Act are governed by the Code of Civil Procedure, jurisdiction depends on Section 20 of the Code, so a proceeding may be filed where the defendant carries on business or where part of the cause of action arises. A company's principal office is relevant for jurisdiction, and because the respondent carried on business at Bombay and part of the cause of action arose there, Bombay courts had jurisdiction. Where more than one court is competent, the parties may validly agree to confer exclusive jurisdiction on one of them, and such a clause is not contrary to public policy or Section 28 of the Contract Act. The Bombay exclusive jurisdiction agreement was therefore valid and binding.

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Issues: Whether the parties could validly agree to confer exclusive jurisdiction on the Bombay courts for proceedings under the arbitration agreement, and whether the Bombay courts otherwise had jurisdiction to entertain the petition.

Analysis: Section 41 of the Arbitration Act, 1940 makes the Code of Civil Procedure applicable to proceedings under the Act, so jurisdiction depends on the Code. Under Section 20 of the Code of Civil Procedure, 1908, a suit or proceeding may lie where the defendant carries on business or where the cause of action arises in whole or in part. A company is a corporation for the purposes of the Code, and its principal office gives jurisdiction. Since the respondent carried on business at Bombay and part of the cause of action arose there, the Bombay courts had jurisdiction. Where more than one court has jurisdiction, an agreement choosing one of them is not opposed to public policy and does not offend Section 28 of the Contract Act.

Conclusion: The agreement making the Bombay courts alone competent was valid and binding, and the petition could not be maintained at Varanasi.

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