This case is a part of our Annual Arbitration Review 2019.
Judgement Name: Geo Foundations and Structures Private Limited v. Tata Projects Limited
Citation: O.P. No. 760/2019
Court: Madras High Court
Coram: N. Satish Kumar, J.
Date: 7th May 2020
Keywords: Geo Foundations and Structures Private Limited, Tata Projects Limited, Section 11, Appointment of Arbitrator.
Geo Foundations and Tata Projects had entered into a contract for certain work to be completed under two Work Orders. Midway through completion of this work, Tata Projects asked Geo Foundations to stop performing the work, and a dispute arose over the non-payment of the amount demanded. The Petitioner invoked arbitration and appointed an arbitrator. However, the Respondent did not do so, and therefore the Petitioner approached the Madras High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator. The contract contained an express reference to Hyderabad as the “venue” for arbitration and that all litigation was to be through the courts in Hyderabad.
Whether the Madras High Court had jurisdiction for appointment of arbitrators when the arbitration agreement specified Hyderabad as the venue for arbitration and the location for all litigation?
The Respondent contested the jurisdiction of the Madras High Court contending that the parties had conferred exclusive jurisdiction on the courts in Hyderabad through their contract. They relied on Clause 41.3 which stated that the “venue for Arbitration shall be Hyderabad” and Clause 45.1 which stated that “in the event of any litigation, the jurisdiction of the Contract shall be that of the courts at Hyderabad, India”. The Petitioner argued that the no cause of action had arose in Hyderabad and, that Hyderabad was only designated as a “venue” and not a “seat”. Further, the amended provision required the court to only examine whether an agreement existed, and nothing else.
The Court relying on previous judgments held that if multiple courts have jurisdiction, parties are at liberty to exclude all other courts. Moreover, the mere fact that the contract was signed in Chennai and a part of the cause of action arose there would not vitiate the party’s agreement to arbitrate at Hyderabad and confer exclusive jurisdiction to Hyderabad courts.
The Court held that it lacked territorial jurisdiction and that the Petitioner should approach the Telangana High Court for its remedy. Accordingly, it dismissed the petition.