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Arb. P. 662/2019

Decided On: 06.07.2020

Appellants: Aarka Sports Management Pvt. Ltd.
Respondent: Kalsi Buildcon Pvt. Ltd.

Hon'ble Judges/Coram:
J.R. Midha


J.R. Midha, J.

1. The petitioner is seeking appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act.

2. The arbitration agreement between the parties is contained in clause 15 of the operation, maintenance and management agreement dated 16th March, 2018, which is reproduced hereunder:

"15. Governing Law, Jurisdiction & Dispute Resolution

15.1 This Agreement shall be governed by and construed in accordance with the laws of India and subject to clauses 15.2 and 15.3, the jurisdiction of this Agreement shall be exclusively in the courts of New Delhi, India.

15.2 Negotiation: The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, difference or claim raised, arising out of or in connection with this Agreement including the construction, validity, execution, performance, termination or breach hereof (hereinafter referred to as 'Dispute'). In the event that the Parties are unable to reach a resolution within 30 (thirty) days of the start of Dispute the same shall be settled by binding arbitration.

15.3 Arbitration: Any Dispute which is not settled by Mediation, shall be determined by Arbitration under the Arbitration and Conciliation Act, 1996, as amended by the Arbitration and Conciliation (Amendment) Act, 2015. The Arbitration shall be conducted before a sole arbitrator appointed with the mutual consent of both Parties. If the Parties are unable to reach an agreement on the choice of an arbitrator within 30 days of the Notice of Arbitration by either Party, the Parties shall approach the court of proper jurisdiction for appointment of arbitrator."

(Emphasis Supplied)

3. The petitioner invoked the arbitration vide notice dated 26th February, 2019 which was replied by the respondent on 20th March, 2019.

4. The arbitration agreement as well as notice of invocation are not disputed. Learned counsel for the respondent however disputes the jurisdiction of this Court to entertain this petition. According to the respondent, Delhi is neither the seat of arbitration nor any cause of action arose at Delhi. The agreement was drawn at Ranchi; the agreement was signed at Lucknow and the place of performance/execution of the agreement was Patna, Bihar.

5. Learned counsel for the petitioner urged at the time of the hearing that this Court has exclusive jurisdiction to entertain this petition under clause 15.1 which specifically provides that the jurisdiction of the agreement shall be exclusively with the Courts at New Delhi. Reliance was placed on Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited, MANU/SC/0456/2017 : (2017) 7 SCC 678; Brahmani River Pellets Limited v. Kamachi Industries Limited, State of West Bengal v. Associated Contractors, MANU/SC/0793/2014 : (2015) 1 SCC 32; NJ Construction v. Ayursundra Health Care Pvt. Ltd., MANU/DE/0521/2018 : 2018 (168) DRJ 274; Raman Deep Singh Taneja v. Crown Realtech Private Limited; Rohit Bhasin v. Nandini Hotels; Spentex Industries Ltd. v. Louis Dreyfus Commodities India Pvt. Ltd., MANU/DE/0724/2019 : (2019) 258 DLT 138; and Virgo Softech Ltd. v. National Institute of Electronics and Information Technology.

6. Learned counsel for the respondent urged at the time of the hearing that clause 15.1 of the agreement is invalid as Delhi is not the seat of agreement; no cause of act........