The Calcutta High Court in arbitration petition no. 199 of 2020 Bowlopedia Restaurants India Limited v Devyani International Limited decided on 21 January 2021 has laid down the law pertaining to the selection of forum by a party with regard to the seat of arbitration agreed upon in the contract in the case of a domestic arbitration.
A petition was filed before the Calcutta High Court for interim measures pending arbitration under section 9 of the Arbitration and Conciliation Act, 1996. The petition was opposed by the respondent Devyani International on the ground of jurisdiction on the basis that as per the contract, it was agreed that the seat of arbitration was to be New Delhi.
However, in the peculiar facts and circumstances of the case, the Calcutta High Court did have the jurisdiction to entertain the dispute in accordance with the principles of section 20 of the Code of Civil Procedure, 1908. Accordingly, the court formulated the following issue in paragraph 27 of the judgment: “When there is a forum selection clause conferring exclusive jurisdiction to a court which is different to the court having jurisdiction over the seat of arbitration, in a domestic arbitration, which court will have jurisdiction over the arbitration proceedings?”
In paragraph 39 of the judgment, the court ruled that:
“In the case of a domestic arbitration:
(1) Where the agreement has not prescribed the seat of arbitration and the parties have not selected any court to try the disputes, then, the court having jurisdiction over the subject matter of the arbitration will exercise jurisdiction;
(2) Where the parties to the arbitration agreement have prescribed a seat of arbitration and such agreement does not have a forum selection clause, then, the court having jurisdiction over the seat of arbitration, will have jurisdiction to try the arbitration petition;
(3) Where the parties have prescribed the seat of arbitration as well as selected a forum, and there is no conflict between the two, then the court having jurisdiction on the seat of arbitration, will exercise jurisdiction as there is no conflict;
(4) Where the parties have selected a seat of arbitration, which is in conflict with the jurisdiction of the court selected under the forum selection clause, then, the court selected under the forum selection clause will have jurisdiction provided such court otherwise has jurisdiction akin to section 20 of the Code of Civil Procedure, 1908. The issue framed in paragraph 27 is answered accordingly.”
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