Forum selection clause overrides seat of arbitration in domestic arbitration: Calcutta High Court

The Calcutta High Court has held that a forum selection clause overrides jurisdiction of seat of arbitration in domestic arbitration when even otherwise the selected forum has jurisdiction akin to Section 20 of the Code of Civil Procedure, 1908. (Bowlopedia Restaurants India Ltd vs Devyani International Ltd).The Court has said,."Party autonomy in an arbitration being imperative, it is just and proper that, in a domestic arbitration when the parties agree to a selected forum, which otherwise has jurisdiction, then, such selected forum should have precedence over the seat of arbitration. It is so in order to give primacy to party autonomy.".The order was passed by a Singe Judge Bench of Justice Debangsu Basak while deciding a plea under Section 9 of the Arbitration and Conciliation Act, 1996 for interim protection..The respondent raised objections of lack of jurisdiction as it pointed out that under the arbitration agreement, the parties had agreed that the seat of arbitration shall be at New Delhi. .Therefore, the courts at New Delhi have exclusive jurisdiction to try, entertain and determine any proceeding under the Arbitration Act, overriding the "choice of jurisdiction" to adjudicate disputes arising out of the agreement, the respondent asserted..The petitioner, on the other hand, stated that the forum selection clause would have precedence over the clause on seat of arbitration. .To arrive at its conclusion, the Court considered a series of judgments passed by the Supreme Court and the Delhi High Court. .It reiterated that the Arbitration Act recognised party autonomy and the power of the parties to choose the law that would govern the contract and the arbitration. .It has recognised the power of the party to select the applicable procedure for arbitration between themselves, to select the arbitrators to adjudicate the disputes, and the seat of arbitration, the Court added. .The Court further observed,.".. It is.. essential in international commercial arbitration that, the laws applicable to the arbitration proceedings are identified by identifying the seat of the arbitration. The seat of arbitration then determines the law governing the arbitration proceedings. Such a situation, does not arise in the case of a domestic arbitration.".The Court stated that in a domestic arbitration, when parties do not specify the choice of forum but specify the seat of the arbitration, the courts having jurisdiction over the seat of arbitration would have jurisdiction over the arbitration proceeding.."The seat of arbitration, in the case of a domestic arbitration, assume significance, in the absence of a valid forum selection clause.", it said..However, when a specified court/jurisdiction is chosen, notwithstanding the seat of arbitration, the court selected by the parties would have jurisdiction in the case a domestic arbitration, the Court said. .".. when, although the parties have specified a seat of arbitration, which is different to the Court which the parties have selected, then, in my view, the selected Court, which otherwise have jurisdiction to try the disputes, will have jurisdiction over the subject arbitration in the case of a domestic arbitration..provided otherwise that (forum selected) has jurisdiction akin to Section 20 of the Code of Civil Procedure, 1908. The issue framed in paragraph 27 is answered accordingly.", the Court opined. .Such view, the Court said, is permissible on a harmonious construction of the contract between the parties and would not render the forum selection clause otiose. .The Court, accordingly, held that it had the jurisdiction to try and determine the present petition..Advocates Sabyasachi Chowdhury, Sayan Ganguly, Tirthankar Das, Arjun Mookerjee, Khushboo Choudhary, Rituparna Saha appeared for the petitioner.Advocate Raunak Satpathy appeared for the respondent..Read the Order: