NHPC LIMITED Vs. HINDUSTAN CONSTRUCTION COMPANY LTD

JUDGEMENT

(1.) This appeal is directed against the order dated 12.02.2015 passed by a learned single judge of this court in OMP No.536/2014 which was a petition filed by the respondent ('HCCL') under section 9 of the Arbitration and Conciliation Act, 1996 ('said Act). The learned single judge disposed the said OMP by making the ex parte order dated 09.05.2014 absolute during the pendency of OMP No.369/2014 which is a petition filed by HCCL under section 34 of the said Act challenging the award dated 17.01.2014. The effect of this was that in case the appellant ('NHPCL') desired to invoke the bank guarantees mentioned in Schedule I of the petition during the pendency of OMP No. 369/2014, NHPCL would give one week's advance clear written notice to HCCL of its intention to do so.

(2.) Before the learned single judge an objection had been raised by NHPCL in respect of the jurisdiction of this court to entertain OMP No. 536/2014. Two contentions were advanced on behalf NHPCL. The first contention was that NHPCL had filed an application under section 14(2) of the said Act in the Court of the Civil Judge, Faridabad. Though that application was dismissed, since the court in Faridabad was the first court which had been approached, that court alone, in view of section 42 of the said Act, could entertain further applications concerning the arbitration between the parties. It was, therefore, urged that this court did not have jurisdiction to entertain the said OMP No. 536/2014 filed by HCCL under section 9 of the said Act. The second contention was that the agreement dated 10.05.2006 between the parties was signed at Faridabad, Haryana; the project was executed in West Bengal; the registered office of NHPCL is in Faridabad; the registered office of HCCL is in Mumbai; the bank guarantees were issued in Mumbai; and, no part of the cause of action arose in Delhi. It was submitted that, as such, this court did not have jurisdiction to entertain either the section 34 petition [OMP No. 369/2014] or the section 9 application [OMP No. 536/2014]. Though, admittedly, Delhi was the place or seat of arbitration, it was submitted that this alone would not confer jurisdiction on this court to entertain the said petitions. Reliance was placed on the following decisions:-

(3.) With regard to the first contention, the learned counsel for HCCL submitted that the argument based on section 42 of the said Act was not available to NHPCL for the simple reason that the section 14 application which had been filed before the civil judge, Faridabad was in relation to dispute no. 2 which was yet to be decided by the Arbitral tribunal. Moreover, the present petition was not in respect of dispute no. 2 but, in respect of dispute no. 1, which was distinct and in respect of which the arbitration proceedings had already culminated in the Award dated 17.01.2014. As regards the second contention, the learned counsel for HCCL submitted that it is the settled position in law that the seat of arbitration confers jurisdiction upon courts of that place. Reliance was placed on the constitution bench decision of the Supreme Court in the case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., 2012 9 SCC 552. Reliance was also placed on a division bench decision of this court in Ion Exchange (India) Ltd v. Panasonic Electric Works Co., 2014 208 DLT 597. It was also contended that Clause 67.3 (v) of the Conditions of Particular Application (COPA) specifically provided for "New Delhi/Faridabad" to be the seat of arbitration. And, since the entire arbitration had in fact been conducted in New Delhi, the court in New Delhi was also the forum of choice as agreed between the parties. Clause 67.3 (v) of COPA reads as under:-