When the parties agreed to have the "venue" of arbitration at a particular place, only the High Court which has jurisdiction over the said place can entertain the petition seeking appointment of Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Supreme Court has held.
The issue before the bench comprising of Justice R. Banumathi and Justice AS Bopanna, in Brahmani River Pellets Limited vs. Kamachi Industries Limited was whether the Madras High Court could exercise jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 despite the fact that the agreement contains the clause that venue of arbitration shall be Bhubaneswar. According to the High Court, mere designation of "Seat" by parties does not oust the jurisdiction of other courts other than at the Seat of arbitration. In absence of any express clause excluding jurisdiction of other courts, both the Madras High Court and the Orissa High Court will have jurisdiction over the arbitration proceedings, it was held.
Disagreeing with the said observations, the Apex Court held that, the Madras High Court erred in assuming the jurisdiction under Section 11(6) of the Act, when the parties agreed to have the "venue" of arbitration at Bhubaneswar. The bench observed that, in this case, only Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act.
Referring to earlier judgments which have considered the issue of jurisdiction, the bench observed:
"Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the "venue" of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik, non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference."
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