LARSEN AND TOUBRO LTD Vs. K S BAIDWAN

JUDGEMENT

(1.) Petitioner has filed objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act') for setting aside the arbitral award dated 11.12.2003 passed by the first respondent. The second respondent has raised a preliminary objection as to the territorial jurisdiction of this Court, pleading that objections are wholly incompetent/ thus, not maintainable. Petitioner has filed a reply submitting that the objection as to the forum selection under clause 12 of the agreement between the parties has been waived by the second respondent, by invoking jurisdiction of the Delhi courts in other matters. Question which requires consideration is whether the courts at Delhi have the territorial jurisdiction, to entertain objections under the Act, in relation to the contract concluded, performed and allegedly breached, giving rise the disputes, forming subject matter of the arbitration, at Ghaziabad (UP)?

(2.) Brief facts, for appreciating the above question, are as fellows. On 27.2.1999, petitioner entered into an agreement for construction of the college building, by the second respondent, at Ghaziabad {hereafter, 'the Agreement'}. Clauses 11 and 12 of the Agreement provide that all payments by the employer under the contract shall be made only at Ghaziabad; that all disputes arising out of or in any way connected with this agreement, shall be deemed to have arisen at Ghaziabad, and only Courts at Ghaziabad shall have the jurisdiction to determine the same. Clause 33 of the agreement provides that all disputes or difference any kind whatsoever, which may at any time arise between the parties touching or concerning the said work, execution or maintenance of the contract, foreclosure or breach thereof, shall be adjudicated by the sole arbitrator to be appointed by the appointing authority. It also provides procedure for appointment of the appointing authority for appointing sole arbitrator to adjudicate the disputes between the parties and filling up of the vacancy, if any. The dispute between the parties arose while construction was in progress, giving rise to claims and counter claims.

(3.) On 24.8.2001, second respondent filed a civil suit (No.288/2001) for injunction against the petitioner, restraining them from entering or taking forcible possession of any portion of the college building at Ghaziabad, pleading therein, that the Agreement for construction was signed at Delhi that defendant is having its office at Delhi and that the threats were also extended in Delhi, hence court at Delhi has territorial jurisdiction to entertain the suit; ex-parte injunction was obtained. Petitioner's case is that on 14.9.2001, second respondent withdrew this suit expecting jurisdictional objection by them.