GUARANTCO LTD. Vs. CALCOM CEMENT INDIA LTD.

JUDGEMENT

(1.) The petitioner, a Mauritius-based company, furnished guarantees on behalf of the respondent to bankers from whom the respondent had obtained funds for setting up a cement plant in Assam. The parties entered into an agreement on May 18, 2009, which is called the "Recourse Agreement." The petitioner seeks to assert its rights under such agreement and the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 has been made on the strength of an undisputed arbitration clause contained in the Recourse Agreement.

(2.) At the outset, a point of jurisdiction has been taken by the respondent. The respondent demonstrates from the cause title that it does not carry on business within the original jurisdiction of this Court. The respondent says that the only ground pleaded in the petition for invoking the jurisdiction of this Court is the payment of money by the petitioner to Axis Bank at its Shakespeare Sarani Branch within jurisdiction. The respondent contends that the payment of the claim made by Axis Bank on the petitioner was not an obligation under the Recourse Agreement though it may have been a triggering point for the petitioner's rights under the Recourse Agreement being sought to be implemented. The respondent also suggests that it may be inconvenient for the respondent to contest the present proceedings in this Court.

(3.) The petitioner refers to Clause 9.3 of the Recourse Agreement that recognizes the rights and obligations of the parties to the Recourse Agreement upon a demand being made by any bank from which the respondent had availed of credit facilities. Clause 9.3 obliges the petitioner to make payment upon a bank's demand, notwithstanding any dispute that the respondent may have with the bank. The petitioner submits that the payment by the petitioner upon a demand received from the respondent's bankers would be part of the petitioner's cause of action to invoke the petitioner's remedies under the Recourse Agreement. The petitioner says that since the demand was made by Axis Bank from its Shakespeare Sarani Branch and the payment by the petitioner was required to be made at the same branch, in course of the petitioner asserting and attempting to prove the factum of payment to such bank, the situs of the payment becomes relevant and is included within the bundle of facts that need to be asserted and established for the petitioner to be entitled to progress to the reliefs claimed in the action, if this action were by way of a regular suit.