Can parties to an agreement agree to exclude the jurisdiction of one court in preference to another, if two courts are equally competent to try a suit?
Allowing an appeal in AVM Sales Corporation v M/s Anuradha Chemicals Pvt Ltd, a two-judge bench of the Supreme Court recently held that “if the parties agree in clear and unambiguous terms” to exclude the jurisdiction of a court, their decision would be valid and not contrary to the Indian Contract Act, 1872.
The dispute in AVM Sales Corporation involved an agreement drawn up in August 1989, which contained an exclusion clause indicating that disputes arising out of the agreement would be subject to “Calcutta jurisdiction only”.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
