LAWS(DLH)-2002-3-69

USHAMIL PRIVATE LIMITED Vs. GIMPLEX LIMITED

Decided On March 15, 2002
USHAMIL PRIVATE LIMITED Appellant
V/S
SIMPLEX LIMITED Respondents

JUDGEMENT

(1.) This is a petition under Section 20 of the Arbitration Act, 1940 seeking directions to the respondent to file arbitration agreement dated 20.8.1994 and refer the disputes to the arbitrator. Short question that calls for determination is as to which court namely Delhi Court or Madras Court has jurisdiction. Petitioner has placed reliance upon letter dated 4.11.1993 wherein clause 12 relating to jurisdiction is as under:-

(2.) It is in this letter of acceptance that the arbitration clause 15 was included. It is settled law that the communications exchanged between the parties at the stage of negotiation become irrelevant once the parties enter into final written agreement which becomes binding and concluding agreement. As is apparent from the clauses of the letters dated 4.11.1993 and 20.8.1994, no exclusivity has been attached to the jurisdiction of the courts. It is the final agreement which is binding upon the parties. The petitioner is invoking clause 15 of the final agreement. In the letter of offer, there was no clause of arbitration. Similarly letter dated 9.11.1993 was silent for arbitration. On the one hand, petitioner is invoking clause 15 of the agreement dated 20.8.1994 whereas on the other hand he has placed reliance upon clause 12 of the letter sent by him. Such a course is not open to the petitioner. Either he has to rely entirely upon letter of offer sent on 4.11.1993 and the letter dated 9.11.1993 received by him which according to the petitioner is the letter of acceptance or he has to rely upon final agreement concluded between the parties. In the letter of offer, there was no arbitration clause. It is the final agreement between the parties which contained arbitration clause and therefore clause 16 of the final agreement has to be given effect to as far as question of jurisdiction is concerned. Now arises the question whether clause 16 has element of exclusivity or not. Wherever there is ouster clause, it has to be clear, unambiguous and specific as various causes of action arise in matter of contracts. For instance cause of action may arise where contract is made or where it should have been performed or where its breach occurred. The nature of contract may provide jurisdiction to more than one courts but if the parties agree to vest jurisdiction in one of the courts, such an agreement between the parties is neither against public policy nor against the provisions of procedural code governing the jurisdiction of courts vis-a-vis causes of action.

(3.) According to Mr.Sanjeev Puri, learned counsel for the petitioner clause 16 of the agreement does not have element or ingredient of exclusiveness as the word 'alone' is missing where courts of Madras have been vested with the jurisdiction. Mr.Puri has placed reliance upon A.B.C.Laminart Pvt. Ltd. and another Vs.A.P.Agencies. Salem AIR 1989 SC 1239 wherein a view was taken that where the clause under which it is claimed that there is ouster of jurisdiction of courts only stated that any dispute arising out of sale would be subject to jurisdiction of Court within whose jurisdiction order was placed but there were no words like 'exclusive', 'alone' and the like, other Jurisdictions having connecting factors were not clearly, unambiguously and explicitly excluded. The above ratio was handed down in view of clause 11 of the agreement which was as under:- "Any dispute arising out of this sale shall be subject to Kaira Jurisdiction." It was observed that when the Court has to decide the question of Jurisdiction pursuant to an ouster clause it is necessary to construe the ousting expression or clause properly. Often the stipulation is that the contract shall be deemed to have been made at a particular place. This would provide the connecting factor for jurisdiction to the Courts of that place in the master of any dispute on or arising out of that. contract and therefore it would ipso facto take away jurisdiction of other courts. where an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. The difficulty arises where the words 'alone', 'only', 'exclusive' and the like are not used. It was observed that even without such words in appropriate cases the maxim 'expressio unius est exlusio alterius' i.e. expression of one is the exclusion of another is applicable.