Rawat, Advs.) vs MR AMIT SINHA

.....RESPONDENT (Through: Mr. Vinod Kumar, Mr. Rajeev Kumar, Ms. Alka Srivastava and Mr. Vishal, Advs.) Signature Not Verified Signed By:DEEPAK BISSYAN Signing Date:16.05.2025 16:19:17 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV JUDGEMENT PURUSHAINDRA KUMAR KAURAV, J. (ORAL)

1. The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (1996 Act) by the petitioner, seeking the appointment of an Arbitrator, to adjudicate upon the disputes that have arisen between the parties under the Memorandum of Understanding dated

12.02.2016.

2. Learned counsel for the respondent has raised several objections on the merits of the matter.

3. In addition to the above, an objection has also been raised as to the maintainability of the present petition on the ground of lack of territorial jurisdiction. Drawing the attention of the Court to Clause 18.8(a) of the Lease Deed dated 09.05.2016, learned counsel for the respondent submits that the validity, construction, and performance of the said Lease Deed are to be governed and interpreted in accordance with the laws of India, and that the competent Courts would be at Surat which shall have exclusive jurisdiction in that regard. On this basis, it is contended that the petitioner ought to have approached the appropriate Courts at Surat and not this Court.

4. The aforesaid objection is controverted by learned counsel for the petitioner, who places reliance on the decision of this Court Cinepolis (India) (P) Ltd. v. Celebration City Projects (P) Ltd1. He contends that Clause 18.8(b), if considered in the right perspective, the same would clearly indicates that the parties intended to have the seat of the Arbitration at New 1 2020 SCC OnLine Del 301 Signature Not Verified Signed By:DEEPAK BISSYAN Signing Date:16.05.2025 16:19:17 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV Delhi and, therefore, this Court would have jurisdiction to appoint the Arbitrator.

5. Learned counsel for the petitioner also submits that there are three lease deeds between the parties and all three lease deeds contain similar clauses with respect to governing laws and dispute resolution.

6. I have heard learned counsel appearing for the parties and perused the record.

7. In order to appreciate the aforesaid contentions, the Court has considered clause 18.8 of the Lease Agreement, which reads as under:- “18.8 Governing Law and Dispute Resolution- (a) The validity, construction and performance of this Lease Deed shall be governed interpreted with laws of India with competent Courts at Surat having the exclusive jurisdiction in this regard. (b) If any question of difference or claim or dispute shall arise between the parties hereto touching these presents or the construction thereof to rights, duties or obligations of the parties hereto or as to any matter arising out of or connected with the subject matter of these presents, the same shall be referred to the arbitration to be held at New Delhi in accordance with the provisions of the (Indian) Arbitration and Conciliation Act, 1996. The reference shall be to a sole arbitrator. If the Parties fail to ·appoint a sole arbitrator within 30 (Thirty) days, then the dispute shall be referred to 3 (Three) arbitrators, with each Party appointing 1 (One) arbitrator and the two arbitrators so appointed appointing the third arbitrator. The arbitrator/s shall render their award In English language and in writing. The Parties agree to abide by the decision of the arbitrator/s, which shall be final and binding.”

8. A bare perusal of Clause 18.8(b) of the Lease Deed indicates that any question with respect to difference, claim, or dispute arising between the parties, touching upon the construction of the Lease Deed or the rights, duties, or obligations of the parties pursuant thereto, shall be referred to arbitration to be held at New Delhi in accordance with the provisions of the 1996 Act.

9. The use of the expression “held at New Delhi” is of fundamental Signature Not Verified Signed By:DEEPAK BISSYAN Signing Date:16.05.2025 16:19:17 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV significance. This Court, in the case of Cinepolis India Pvt. Ltd. considered a similar clause wherein the arbitration was stipulated to be “held” at a particular place, and the objection raised was that the agreement was executed at Ghaziabad and the property in question was also situated in Ghaziabad.

10. Upon considering various pronouncements of the Supreme Court and the effect of similar clauses, this Court, in the aforementioned decision, in paragraph Nos. 29 and 33 has held that where the parties agree to the place at which the arbitration proceedings are to be held, the said place assumes the character of the seat of arbitration. Accordingly, the Courts at such a seat would have exclusive jurisdiction while examining a petition under Section 11 of the 1996 Act.

11. Thus, notwithstanding the situs of the property or the place of execution of the agreement, once the parties have agreed to New Delhi as the venue or seat of arbitration, the jurisdiction would lie with the Courts at New Delhi. The relevant paragraphs of the said decision read as under:- “29. What emerges therefore by reading of the various judgments referred to above is that it is really the seat of arbitration which is akin to an exclusive jurisdiction clause. Where there are no contrary provisions in the agreement, the place would be the juridical seat which would determine the territorial jurisdiction of a Court. Where the words in the arbitration clause are neither seat nor place and the arbitration clause only refers to words such as “venue‟ or “held in” the intent of the parties would have to be seen from the agreement. If the parties intend that the arbitration proceedings are to be held as a whole at that particular venue then the venue also becomes a juridical seat. It is also clear from the now well settled law that it is the seat or the juridical seat which will be the guiding factor for a Court to determine its jurisdiction while examining a petition under Section 11 of the Act. In the case of Devyani International Ltd. vs. Siddhivinayak Builders 30. & Developers being OMP (I) (COMM) 373/2017, decided on 27.09.2017, a Coordinate Bench of this Court was dealing with an inter-play between an Arbitration Clause and a clause relating to “Governing Law”. Relevant para of the Arbitration Clause is as under: Signature Not Verified Signed By:DEEPAK BISSYAN Signing Date:16.05.2025 16:19:17 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV “22.1 ......The seat of arbitration shall be at New Delhi” Clause 12 which was a clause of the Governing Law read as under:- “12.1... The Courts at Mumbai shall have the exclusive jurisdiction to entertain the dispute or suit arising out of or in relation to this agreement. The Court relied upon the judgment of the Supreme Court in Indus Mobile Distribution Private Limited (supra) and held that the agreement records that the seat of Arbitration shall be at Delhi and thus the Delhi Courts will have exclusive jurisdiction to adjudicate the disputes between the parties In the case of Ramandeep Singh Taneja vs. Crown Realtech Private 31. Ltd. being Arb. P. 444/2017, decided on 23.11.2017, the issue of territorial jurisdiction arose on account of the fact that under Arbitration Clause 24 of the agreement between the parties, the jurisdiction of all disputes was at Delhi while the venue for arbitration proceedings was agreed to be at Faridabad, Haryana. A coordinate Bench of this Court relying on Indus Mobile Distribution Private Limited (supra) and BALCO (supra), held that the place where the venue of arbitration was located would take precedence over the exclusive jurisdiction vested in the Courts at Delhi. The judgment of the Supreme Court in the case of BALCO (supra) was relied upon wherein the Supreme Court held that a distinction is to be drawn between “subject matter of the arbitration” and “subject matter of the suit”. For the purpose of identifying the Court which shall have supervisory control over the Arbitral Proceedings, it would be the Court where the “subject matter of arbitration” is situated and that would take precedence over the Court where the “subject matter of the suit” is situated. The Coordinate Bench resolved the conflict between the two parts of 32. clause 24 by holding that where the disputes are to be adjudicated without reference to arbitration, Courts at Delhi would have exclusive jurisdiction, however, where they have to be resolved through arbitration, venue being at Faridabad, Haryana, the Courts at Faridabad would have exclusive jurisdiction. The same Bench thereafter decided a petition under Section 11 of the Act titled as Global Credit Capital Limited vs. Krrish Realty Nirman Pvt. Ltd. being Arb. P. 123/2018, decided on 16.05.2018, where again the issue of territorial jurisdiction of this Court arose. The said case being Arb Pet. 123/2018 was decided on 16.05.2018 and allowed. The conflict was between the Arbitration Clause 24 as per which the venue of arbitration was Delhi and clause 31 of the Collaboration Agreement, which provided that “Courts at Gurgaon shall have jurisdiction of all matters concerning this agreement”. The word „venue‟ was construed by the Courts at „Seat” of arbitration following the judgments of the Supreme Court on the said issue. Reliance was then placed on Indus Mobile Distribution Private Limited (supra) and Ramandeep Singh Taneja (supra) and it was held that the seat of arbitration being Delhi, the Courts at Delhi would have the territorial jurisdiction to decide matters concerning arbitration Signature Not Verified Signed By:DEEPAK BISSYAN Signing Date:16.05.2025 16:19:17 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV

33. Thus, applying the law laid down the arbitration clause in the present case is clearly referring to a juridical seat of arbitration and since the seat is designated at New Delhi, this Court would have jurisdiction to entertain the present petition, even though cause of action may have arisen in Ghaziabad”

12. In view of the aforesaid decision, the Court is of the considered opinion that this Court has territorial jurisdiction to entertain the instant petition and to appoint the Arbitrator.

13. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. This Court as well in the order dated 24.04.2025 in the case of ARB.P. 145/2025 titled as Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd has extensively dealt with the scope of interference at the stage of Section

11. The Court held as under:-

9. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. The Supreme Court in the case of SBI General Insurance Co. Ltd. v. Krish Spinning,2 while considering all earlier pronouncements including the Constitutional Bench decision of seven judges in the case of Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re 3 has held that scope of inquiry at the stage of appointment of an Arbitrator is limited to the extent of prima facie existence of the arbitration agreement and nothing else. It has unequivocally been held in paragraph no.114 in the case of SBI 10. General Insurance Co. Ltd that observations made in Vidya Drolia v. Durga Trading Corpn.,4 and adopted in NTPC Ltd. v. SPML Infra Ltd.,5 that the jurisdiction of the referral court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would not apply after the decision of Re: Interplay. The abovenoted paragraph no.114 in the case of SBI General Insurance Co. Ltd reads as under:- “114. In view of the observations made by this Court in In Re: Interplay