Venue of Arbitration and the Jurisdiction of High Court: What Supreme Court held

The Supreme Court yesterday held that when a place is agreed upon by the parties as the ‘venue’ of Arbitration, only the High Court having jurisdiction over that place can entertain a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Act) seeking the appointment of an arbitrator..In the instant case, the parties had agreed that Bhubaneshwar would be the venue of arbitration. Holding that only the Orissa High Court would have jurisdiction to entertain a petition filed under Section 11(6) of the Act, a Bench of Justices R Banumathi and AS Bopanna set aside an order passed by the Madras High Court for the appointment of an arbitrator..The Supreme Court held:.“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.”.The appellant and the respondent in the case had entered into an agreement for sale of iron ore pellets which were to be loaded from the Dhamra Port, Bhadrak in Odisha and off-loaded in Chennai, Tamil Nadu. On account of a dispute relating to pricing, the appellant did not deliver the goods to the respondent who in turn claimed damages..The Respondent invoked Arbitration which was contained in Clause 18 of their agreement and had fixed the venue of arbitration at Bhubaneshwar. The Appellant did not agree to the appointment of the Arbitrator which led to the Respondent moving the Madras High Court under Section 11(6) of the Arbitration and Conciliation Act for the appointment of the sole Arbitrator..The Appellant opposed the jurisdiction of Madras High Court. However, the Madras High Court proceeded to appoint an Arbitrator in the matter while holding that the decision of the seat of arbitration would not oust the jurisdiction of other Courts. The High Court also added that in the absence of a clause giving exclusive jurisdiction to a specific Court, both Orissa and Madras High Courts would have jurisdiction..The Supreme Court, however, took a contrarian view from that of the Madras High Court and held,.“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. Non-use of words like “exclusive jurisdiction”, “only”, “exclusive”, “alone” is not decisive and does not make any material difference.”.Therefore, setting aside the Madras High Court’s order appointing a former Judge of the Madras High Court as the sole Arbitrator in the case, the Supreme Court granted liberty to the parties to approach the Orissa High Court with the plea..[Read Judgment]