TaxTMI 
TaxTMI 
2009 (9) TMI 874
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....or transformation into met coke (hard coke). On 29th April, 2005, the Petitioner Company entered into an agreement with the Respondent Company to supply 15,000 Metric Tonnes of coking coal of Indonesian Origin. The agreement to sell provided that the cargo would be sold to the Respondent on High Seas basis. The said agreement was executed in Kolkata within the jurisdiction of the Calcutta High Court. 3. Clause 11 of the aforesaid agreement contains an Arbitration Clause which reads as under :- "In case of any dispute or difference arising between the parties hereto or any claim or thing herein contained or the construction thereof or as to any matter in any way connected with or arising out of these presents or the operation thereof or the rights, duties or liabilities of either party thereof, then and in every such case the matter, differences in disputes shall be referred to an arbitrator in Kolkata, West Bengal, India in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996, or any other enactment or statutory modifications thereof for the time being in force. The place of arbitration shall be Kolkata." [Emphasis supplied] Pursua....
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....ncipal Senior Civil Judge, Bhavnagar (Gujarat) to appear before the said Court on 17th January, 2009, in Arbitration Application No.1 of 2008 purported to have been filed by the Respondent-Company under Section 9 of the Arbitration and Conciliation Act, 1996, praying for an injunction to restrain the Petitioner, his servants and agents from disposing, selling, diverting or alienating the material in question or any part thereof and for the issuance of a direction to the Petitioner to issue delivery orders for 6,793 MT of coking coal in favour of the Respondent. 7. Appearing in support of the Transfer Petition, Mr. Gaurav Mitra, learned Advocate, submitted that the invocation of the jurisdiction of the Principal Senior Civil Judge at Bhavnagar, Gujarat, was contrary to the express terms of the High Seas Sale Agreement dated 7th May, 2005, wherein it had been expressly stated that the sale contract would be subject to Kolkata jurisdiction. Mr. Mitra submitted that the Respondent had deliberately, with mala fide intention, failed to disclose the specific High Seas Sale Agreement dated 7th May, 2005, in the application under Section 9 of the aforesaid Act, since it contained the spe....
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...., if the parties to the contract agreed to vest jurisdiction in one of such Courts to try any dispute which might arise between themselves, the agreement would be valid. It was also urged that if the purport of the agreement was to completely oust the jurisdiction of the Court, such a condition would be unlawful and void being against public policy and would, therefore, be hit by Section 28 of the Contract Act. However, if it was found that the jurisdiction agreed to would also be an appropriate jurisdiction in the matter of the contract, it could not be said that it ousted the jurisdiction of the Court. 11. In addition to the above, Mr. Mitra submitted that even if the provisions of Section 20 of the Code of Civil Procedure were to be applied, no part of the cause of action had arisen within the jurisdiction of the Bhavnagar Court in Gujarat so as to enable it to assume jurisdiction in respect of the transaction arrived at in Kolkata and the parties had agreed under clause 14 of the agreement that the sale contract would be subject to Kolkata jurisdiction. Mr. Mitra urged that it was in such circumstances and also having regard to clause 11 of the aforesaid agreement, which pro....
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....of the Arbitration and Conciliation Act, 1996. 15. The only question which falls for our consideration is whether, notwithstanding the mutual agreement to make the High Seas Sale Agreement subject to Kolkata jurisdiction, it would be open to the Respondent-Company to contend that since a part of the cause of action purportedly arose within the jurisdiction of the Bhavnagar Court, the application filed under Section 9 of the Arbitration and Conciliation Act, 1996, before the Principal Civil Judge (Senior Division), Bhavnagar (Gujarat), would still be maintainable. The aforesaid question has often troubled the courts with one view being that since the parties to the agreement had agreed to a particular forum, they could no longer resile from the said position and claim that other courts, where a part of the cause of action may have arisen, would also have jurisdiction to entertain a suit or other proceeding. The other view has been that if by the said agreement the rightful jurisdiction of a court was sought to be ousted and a court was vested with the jurisdiction to entertain a suit, which it did not have, the same would be contrary to the provisions of Section 28 of the Indian ....