Jurisdiction of Agreement in India

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Section 28 of the Indian Contracts Act cancels agreements restricting court proceedings. Article provides as follows: Under article 9 of the Code of Civil Procedure of 1908, all courts have jurisdiction over all civil actions, unless jurisdiction is expressly or implicitly excluded. Article 20 of the Code of Civil Procedure also provides that an action may be brought either at the place where the defendant has his habitual residence or carries on a commercial activity, or if part of the plea arises. Article 20 specifies that several courts may have jurisdiction to hear an action (e.g. B if part of the plea arises in a place other than the place where the defendant has or is engaged in his habitual residence). There may also be situations where the plea arises in several places for which different courts have jurisdiction. In the case of Shridhar Vyapar v. Gammon India GA 44 of 2018, the Calcutta High Court dealt with a lawsuit for the realization of the costs related to the invoices collected. The invoices contained a provision that disputes would be decided by the courts of Raipur and Nagpur respectively. The Supreme Court of Calcutta ruled that “the parties may be bound by an agreement containing a clause conferring exclusive jurisdiction on certain courts if, after such selection, their conduct can prove that the parties intended to perform the contract. The exception is that, despite such a clause and a consensus to act on it, the plea has been raised completely and massively in another jurisdiction and, second, it would be oppressive to drag the parties into the forum they have chosen, taking into account other factors.

“On the basis of these observations, the Supreme Court of Calcutta concluded that the party challenging the exclusive jurisdiction clause did not explain how the contractually chosen jurisdiction would be inconvenient or oppressive. The court applied the exclusive jurisdiction clause. The Supreme Court held that it was not expressly mentioned in the contractual clause on exclusive jurisdiction. The court held that in the absence of words – “only”, “alone” and “exclusive” – the maxim “Expressio unius est exclusio alterius” must be used, which means that the express mention of one is the exclusion of another. The court noted: “If the clause indicates one of the two competent courts without expressly excluding the jurisdiction of the other court, which is based on facts, both courts had jurisdiction. [12] The exclusive jurisdiction clauses set out the decision of the parties to limit the place of bringing an action to a single case. Section 23 of the Indian Contract Act, 1872 provides, inter alia, that no contract shall be prohibited by or without prejudice to any provision of the Act. Article 28 nullifies any absolute limitation on any remedy or on the ability to assert rights under a contract. However, a common interpretation of Article 20 of the Code of Civil Procedure and Articles 23 and 28 of the contractual decision leaves room for a partial restriction by limiting the parties` recourse to a forum. Exclusive jurisdiction clauses occupy this space between absolute restraint and convenience-based forum shopping. In this case, there was an agreement on the shipment of the material, the plaintiff purchased the case in connection with the damage caused by the non-delivery of the items.

If the settlement of disputes is to be carried out by a dispute before the civil courts, the contracting parties may limit their legal proceedings to a specific court. This is done by including an “exclusive jurisdiction clause” in the contract. A typical “exclusive jurisdiction” clause in a contract reads as follows: Indian Potash Limited (“IPL”) argued that since the law applicable to the arbitration agreement was Singaporean law, the SIAC Registrar should have appointed an arbitrator under the Singapore International Arbitration Act (IAA) because that was the applicable law when SIAC`s jurisdiction was ambiguous. The court disagreed and held that as soon as the Registrar had rightly declared himself competent under the SIAC rules, he was right to act as an appointing authority under the SIAC rules. For a contract referred to in Article 20 of the Code of Civil Procedure of 1908, there are mainly three courts, namely the place of conclusion of the contract, the place of performance of the contract and, finally, the registered office and domicile of the defendant. If, in the case of an agreement between the parties, only one of the aforementioned courts is considered to have jurisdiction under the Code of Civil Procedure, this does not violate the provisions of § 28. It should also be taken into account that it must be available at a reasonable cost and not inaccessible. [9] It should be noted that in ABC Laminart, the court focused on the use of words such as “only”, “alone” and “exclusively”, which must be considered to fall within the exclusive jurisdiction of a court, and that the court of Karia and Salem have jurisdiction in this matter. On the contrary, in Swastik, the court ruled out that, even in the absence of such words, it was implied to have the exclusive jurisdiction of a court of a given place.

The court ruled that the clause of the agreement clearly establishes the exclusive jurisdiction of the Bombay courts and that the Mumbai courts have exclusive jurisdiction to hear the case. It was found that the contract had been performed in Mumbai and that the exclusive jurisdiction clause had been signed by the parties, that the delhi civil courts had no control over the case and that they were subject exclusively to the control of the mumbai civil courts. By including such a clause in the contract, the parties clearly and unambiguously express their intention that only one particular court should have sole jurisdiction. If, through a contract, the parties have established some jurisdiction in a given place and those courts have jurisdiction to initiate the proceedings, it can be assumed that the parties really intended to exclude the other courts. Therefore, such a clause is not contrary to section 28 of the Indian Contracts Act and is not prohibited by law or public order. The maxim “expressio unius est exclusio alterius” – the expression of one is the exclusion of another – must be applied in relation to “exclusive jurisdiction” clauses. In this case, a purchase agreement was signed by the parties and clause 12.7 of the contract clearly stated that “it is agreed between the parties that the civil courts of BOMBAY shall have exclusive jurisdiction over any matter, claim or dispute arising out of or in any way connected with this Agreement”. It should be noted that the exclusive jurisdiction clause must be clear and unambiguous and must be known to the contracting parties. The mere printing of the clause in the consignment note is not binding on the parties. `(i) any agreement which restricts a party by the exercise of its rights under or in respect of a contract, by the usual legal proceedings before the ordinary courts, or which limits the period within which it may assert its rights; Or the applicant claims that a certain amount of payment is made in Bhubaneswar, the courts of Bhubaneswar are competent to hear the case. In the above case, the parties conclude a purchase contract concluded in Madras.

A clause in the agreement stipulated that in the event of a dispute on this matter, it had to be submitted to the Bombay arbitration. The parties clarified that the place of arbitration is Bombay. In der Rechtssache A.B.C. Laminart Pvt. Ltd. & Anr vs A.P. Agencies, Salem [1989 SCR (2) 1], the contract between the parties provided that the courts of Kaira had jurisdiction to hear disputes arising from the contract. The plaintiff filed an action for recovery of money in the Court of Salem. The Madras Supreme Court upheld the concurrent jurisdiction of the Salem Court, as the contract was partially performed in Salem. The Supreme Court Chamber held in the Special Leave to Appeal case that, with respect to the interpretation of the termination clause, where words such as “alone”, “only”, “exclusively” and similar were used, there should be no difficulty in interpreting the dismissal, unless it is established that there is no consensus ad idem. However, an implied exclusion from other jurisdictions in the absence of such clauses should be inferred from the facts and circumstances of the case and would not be automatic. The Court further held that courts other than Kaira relating to the contract were not excluded by the use of specific terms and that the general terms and conditions of the contract did not provide for the exclusion of other courts.

Although it concluded that the clause was valid and enforceable, the court broke through the clause and concluded that the Salem court had jurisdiction. .