• Arbitration Act

A stamped franchisee agreement was entered by our proprietorship firm with a Bombay based company with a clause that all disputes will be subject to Mumbai jurisdiction despite the fact that agreement was executed, notorised and witnessed in Jaipur. Based on this fact, High Court, Jaipur appointed a retired High Court judge as a sole Arbitrator in August' 17. The Arbitrator held four meetings but the Bombay based principle did not appear before the arbitrator. On the other hand, opposite party filed a review petition challenging the decision based on DATAWIND case decided by Hon'ble Supreme Court.
The High Court allowed the review petition and recalled the order for appointment of Arbitrator. 
Please advise what should be our next step ???
Asked 4 years ago in Civil Law

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18 Answers

Disputes between parties have to be referred to arbitration at Mumbai only as per arbitration clause in the contract

2) HC in Jaipur had no jurisdiction to appoint arbitrator

Ajay Sethi
Advocate, Mumbai
87932 Answers
6207 Consultations

5.0 on 5.0

The arbitration agreement is always followed for place of arbitration and the seat of arbitration and appointment of Arbitrator.

Since both the parties at time of agreement choose the place I.e venue of arbitration at bombay than you should abide by same.

Also I would advise it will be futile if the review is further challanged in Supreme Court as the party agreed on place and there are plenty of judgements for same you should choose bombay as place of arbitration appoint an Arbitrator according the clause if any if not than request court according to section 11 arbitration act and start proceeding as the time you loose you shall suffer the loss.

The dantiwaada decision clarifies that there should be no forum shopping, if once it agreed by parties to a jurisdiction.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Also the similar view was take by the supreme court In Swastik gases case where the contract specifies the jurisdiction and the court there is competent to deal with matter than an inference can always be drawn that parties intent to exclude all other courts.

Also when two or more courts have jurisdiction and parties has agreed on one, than only court choose by parties will have jurisdiction.

Since defendant/other party are bombay based than bombay and jaipur (cause of action)both have jurisdiction bit you have agreed to bombay than that shall prevail.

So in your case bombay is agreed and competent jurisdiction.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1) it does not make sense in filing appeal in SC

2) your appeal would be dismissed

Ajay Sethi
Advocate, Mumbai
87932 Answers
6207 Consultations

5.0 on 5.0

Sir it is particularly held by Supreme court in land mark judgements according to me it shall be futile exercise to waste time money in Supreme court as you are aggrieved party herein you had suffered losses.

Also if the arbitration proceedings are quashed on lack of jurisdiction than the appointment of Arbitrator cannot be reinstead because the Arbitrator appointment shall be by appropriate jurisdiction court or by the consent of parties or as agreed in the agreement.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Sir please note that if the contract specifically states that jurisdiction shall be mumbai then better abide by same. If you people had agreed for two places for settlement of disputes then it could be held at any one of case. In your case approaching supreme court will just result in expenses and the result may not be much favourable though it varies from case to case.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

It may apply section 19 of

Arbitration and Conciliation Act, 1996

19. Determination of rules of procedure.

1. The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908). or the Indian Evidence Act, 1872 (1 of 1872).

2. Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

3. Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

4. The power of the arbitral tribunal under sub- section (3) includes the power to determine the admissibility, relevance, materiality and weight of' any evidence.

Here further section 19 (3) and (4) will be applicable and ask to to read agreement clause again that all disputes will be subject to Mumbai jurisdiction and in this base dispute should have run the Mumbai court.

If you check again the definition

The relevant provisions of the Arbitration and Conciliation Act, 1996 are set out hereinbelow:

“2. Definitions. - (1) In this Part, unless the context otherwise requires,

-

(e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having, jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject- matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

In this definition check the word "subject matter of the arbitration If the same had been the subject matter of a suit".

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

In your case the Jurisdiction of all your dispute is agreed to be subject to Mumbai. Therefore you can not travel beyond the agreed terms of agreement and thus no arbitration proceedings can take place at Jaipur. In my opinion going to SC would be a futile attempt. You should send notice to your opponent for appointment of arbitration at Mumbai or file petition for appointment of arbitrator at Mumbai.

Ujwal Rajan Phasate
Advocate, Nagpur
37 Answers
4 Consultations

5.0 on 5.0

Unless And until any serious flaw as regard his neutrality or competence of the arbitrator is challenged on which his appointment is cancelled, such order is amenable for challenge.

I would Surely suggest you to file SLP if the appointment was revoked for no just cause or consideration as it appears from your post.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

Yes you can insist on Mumbai based jurisdiction point which his mentioned in the agreement.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

Dear Client,

Order of High Court was in misguide and error in law.

Supreme Court already held, where the parties agree to venue of arbitration, Under ‘Exclusive Jurisdiction Clause’ In Arbitration Agreement, Only Fixed Seat Of Arbitration Can Have Jurisdiction:...

Appeal is Supreme Court will attract further litigation cost without any relief.

Appeal could have possible if High Court order for appointed Arbitrator would have pronounced before 19th April 17. Now no use.

And the present arbitration proceeding is ab initio null.

What Hon`ble High Court observed in review order about going arbitration proceeding. Any interim order/s passed by Arbitrator in Jaipur. ?

Can contact for Legal Assistance.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Dear Sir,

Yes, it is one of the delaying tactics. You may go to Supreme Court challenging the orders of High Court. But the matter may be delayed and the Supreme Court may not have time to give its findings except to reject such SLP’s on threshold. Decide yourself the future course of action which is more economical to you.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

Prima Facie, the SC won't interfere with the decision. Send the review order so that an assessment may be made as to whether it makes sense to challenge the review order before SC.

V Ranjan
Advocate, Delhi
62 Answers

5.0 on 5.0

It is clear from the conditions that disputes are subject to jurisdiction at Mumbai hence there's no surprise that high court recalled the order appointing the arbitrator at an outside jurisdiction, in an order in a review petition.

You may discuss deeply at length with your advocate on further issues based on the prevailing circumstances.

T Kalaiselvan
Advocate, Vellore
78089 Answers
1543 Consultations

5.0 on 5.0

There are no merits in your case even if proposed appeal is preferred.

It will further prolong the case without any result for long time.

T Kalaiselvan
Advocate, Vellore
78089 Answers
1543 Consultations

5.0 on 5.0

Now only SLP in Supreme court to challenge the said order is maintainable.

Prashant Nayak
Advocate, Mumbai
27261 Answers
88 Consultations

4.4 on 5.0

The later order passed by the HC is in tune with the law of the land, if the palce of jurisdiction has been finalized in the arbitration clause then the same has to take place in the said place only

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

I would advise you to file an appeal in the SC with a limited prayer that the same arbitrator only continues to hear your case, but in my little experience this will be a matter of chance and will be a discretion of the court.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

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