Ker HC | Designation of seat of arbitration in an agreement is akin to an exclusive jurisdiction clause

Kerala High Court: The Division Bench of V. Chitambaresh and R. Narayana Pisharadi, JJ. dismissed an appeal filed against the order of District Judge refusing to entertain a petition challenging arbitral award.

Appellant was a guarantor to the loan availed of by a company named Anugraha Wood Products Limited from the respondent company. Upon non-payment of the loan by ‘Anugraha’, arbitration clause of the loan agreement was invoked and arbitrator passed an award regarding recovery of the loan amount from the appellant. The said award was challenged by the appellant in a District Court at Thiruvananthapuram under Section 34 of the Arbitration and Conciliation Act, 1996. Learned District Judge dismissed this petition on the ground of maintainability. Aggrieved thereby, the instant appeal was filed.

The contention of the appellant was that since he permanently resides at Thiruvananthapuram, therefore, the District Court at Thiruvananthapuram had territorial jurisdiction to entertain his petition.

The Court noted that the arbitration clause in the loan agreement was worded as: “The Arbitrator shall hold the enquiry at Udupi only. However, the Arbitrator may change the place of enquiry if he desires so.” Thus, it was evident that the seat of arbitration was at Udupi. Even the entire arbitration proceedings were conducted at Udupi.

Appellant’s contention was dismissed holding that once the seat of arbitration is designated, it is akin to an exclusive jurisdiction clause. Reliance in this regard was placed on the Apex Court’s decision in Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678. It was concluded that the Court concerned at Udupi alone had territorial jurisdiction to entertain the application filed by the appellant under Section 34 of the Act. [S. Balu v. ICDS Ltd., 2019 SCC OnLine Ker 502, Order dated 08-02-2019]

Join the discussion

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.