Exclusive jurisdiction clauses are valid when parties choose one of two otherwise competent courts and exclude the other.

Where part of the cause of action arose within the jurisdictions of both Vijayawada and Calcutta, the parties could by clear agreement choose one competent forum and exclude the other. Because invoices were raised at Vijayawada, goods were dispatched from there, and payment was payable there, while the agreement was made at Calcutta and delivery was to occur there, both courts had jurisdiction under Section 20 CPC. The contractual clause selecting Calcutta did not confer jurisdiction on a court otherwise lacking it and was not hit by Sections 23 and 28 of the Indian Contract Act, 1872. The exclusive jurisdiction clause in favour of Calcutta was therefore valid.

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Issues: Whether, where part of the cause of action arose within the jurisdictions of two competent courts, the parties could by agreement validly confer exclusive jurisdiction on one court and exclude the other.

Analysis: Part of the cause of action arose at both Vijayawada and Calcutta because the invoices were raised at Vijayawada, the goods were dispatched from Vijayawada, and payment was payable there, while the agreement was made at Calcutta and the goods were to be delivered there. Since both courts were competent under Section 20 of the Code of Civil Procedure, 1908, the contractual clause choosing Calcutta jurisdiction only did not amount to conferring jurisdiction on a court that otherwise lacked it. Such an agreement was examined in the light of Sections 23 and 28 of the Indian Contract Act, 1872, and was held to be valid where it merely selected one of two otherwise competent fora and did not absolutely restrain legal proceedings.

Conclusion: The exclusive jurisdiction clause in favour of Calcutta was valid, the Vijayawada court's jurisdiction stood excluded, and the suit could proceed only before the competent court at Calcutta.

Ratio Decidendi: Where two courts have jurisdiction because part of the cause of action arises within each, the parties may by clear and unambiguous agreement validly choose one of those courts and exclude the other, and such a clause is not hit by Sections 23 and 28 of the Indian Contract Act, 1872.

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