Choice-of-law clauses do not oust territorial jurisdiction where part of the cause of action arises in Delhi.

Territorial jurisdiction and choice of law are distinct: a clause requiring interpretation of an agreement under Hong Kong law did not, by itself, exclude Indian court jurisdiction or create an exclusive foreign forum. The plaint allegations showed that part of the cause of action arose in Delhi, including alleged misuse of the plaintiff's trade name and breach during a trade fair there. Applying Section 20 of the Code of Civil Procedure, the Delhi court therefore had a territorial basis to entertain the suit, and the application to reject or return the plaint was properly dismissed.

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Issues: Whether the Delhi High Court had territorial jurisdiction to entertain the suit, and whether the contractual stipulation that the agreement be interpreted in accordance with Hong Kong law ousted that jurisdiction.

Analysis: The agreement contained a choice-of-law clause stating that the terms and conditions would be interpreted in accordance with the laws of the Hong Kong Special Administrative Region. The clause did not expressly exclude the jurisdiction of Indian courts or provide an exclusive forum. Territorial jurisdiction and applicable law are distinct concepts. Under Section 20 of the Code of Civil Procedure, 1908, a suit may be instituted where the defendant resides or where the cause of action, wholly or in part, arises. On the plaint averments, part of the cause of action arose in Delhi, including the alleged misuse of the plaintiff's trade name and breach during the trade fair held there. The facts pleaded therefore disclosed both a cause of action and a territorial basis for the Delhi court.

Conclusion: The Delhi High Court had jurisdiction, and the application for rejection or return of the plaint was rightly dismissed.

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