Singapore jurisdiction clause upheld

In Max India Limited v General Binding Corporation, Delhi High Court ruled that an agreement between parties to confer jurisdiction on a foreign court would amount to the exclusion of Indian courts and the exclusion of the application of Part I of the Arbitration & Conciliation Act, 1996.

Max India (MIL) filed an application for interim relief under section 9 of the Arbitration Act, in an attempt to restrain General Binding Corporation (GBC) from implementing the terms and conditions of a contract entered into directly, or through its holding company. The contract was agreed to be governed and construed by the laws in Singapore. GBC filed a reply before Delhi High Court, objecting that the high court had no jurisdiction to entertain and try such an application under section 9 of the act.

The governing law and dispute resolution clause (clause 19) in the agreement between the parties was questioned. Citing various precedents, MIL argued that notwithstanding the contents of clause 19, where it was agreed between the parties that a Singapore court would have jurisdiction to settle disputes in connection with the contract, MIL had a right to invoke section 9 of the act and file an application before Delhi High Court.

The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.