Case Title: Reliance Infrastructure Limited v. Madhyanchal Vidhyut Vitran Nigam Limited, OMP (MISC) (COMM) 161 of 2020. Date: 14.08.2023


Facts:
👉The respondent invited bids for Rural Electrification works in Pilibhit and Hardoi Districts, Uttar Pradesh under Government of India Scheme known as Rajiv Gandhi Gramin Vidyutikaran Yojana. The petitioner submitted its proposals/bids .

👉Clause 8 of the General Conditions of Contract (GCC) conferred exclusive jurisdiction on the Courts at newdelhi . Further, Clause 48 of GCC provided that New Delhi shall be the Venue of arbitration. However, the Letter of Award (LOA) dated 01.08.2005 issued in favour of the petitioner provided that the Courts at Lucknow shall have the exclusive jurisdiction in all matters arising out of the contract. Pertinently, the same Clause made LOA subject to GCC.

👉A dispute arose between the parties which led the petitioner to invoke the arbitration clause. Accordingly, a three-member tribunal was formed, however, its mandate stood terminated by mutual consent of the parties. Thereafter, the parties mutually appointed a sole arbitrator on 13.08.2018.

👉The 18 months period provided under Section 29A of the A&C Act expired before the arbitrator could deliver the award, consequently, the petitioner filed an application under Section 29A seeking extension of time to allow the arbitrator to complete the arbitral proceedings and deliver the award. However, the respondent raised preliminary objection to the maintainability of the petition on the ground of lack of territorial jurisdiction.

👉The respondent stated that Clause 21.2 of the LOA designates “local court of Lucknow” with exclusive jurisdiction. LOA supersedes GCC’s “Courts of Delhi” clause, establishing “local Courts at Lucknow.”

👉Whereas the petitioner stated ‘The Court possesses territorial jurisdiction due to the arbitration’s seat being in Delhi.

👉Clause 21.3 of the LOA is “subjected to” the GCC; Clause 8 of GCC, conferring “Courts of Delhi” with exclusive jurisdiction, prevails over Clause 21.2.

Court’s Sequitur:

It held that for an exclusive jurisdiction to override a venue clause, it must specifically provide that the Courts at a particular place have exclusive jurisdiction over the arbitral proceedings and a generic exclusive jurisdiction clause which does not refer to arbitration proceedings as such does not override the venue clause.

The Court reiterated that designation of seat of arbitration is a hallmark of party autonomy enshrined under the A&C Act, thus, it could also be a neutral place and need to be a place where the cause of action arose.

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