ARB.P./1056/2021 of ARJUN SETHI Vs ALL ABOUT OUTDOOR PVT. LTD.

*IN THE HIGH COURT OF DELHI AT NEW DELHIDate of Decision: 13[th]December, 2021

+ARB.P. 1056/2021 & I.A. 15726/2021

ARJUN SETHI

..... Petitioner

Through:Mr. Anvit Seemansh, Advocate.

versus

ALL ABOUT OUTDOOR PVT. LTD.

..... Respondent

Through:Mr. Sumeir Ahuja and Mr. YajurBhalla, Advocates.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

[VIA HYBRID MODE]SANJEEV NARULA, J. (Oral):

1.The present petition under Section 11 (6) of the Arbitration andConciliation Act, 1996 [hereinafter, “the Act”] seeks appointment of SoleArbitrator for adjudication of disputes arising from/ in relation to a‘Consultancy Agreement’ dated 9[th]April, 2018 [hereinafter, “Agreement”].The said Agreement contains an arbitration clause, which is peculiarly wordedand reads as follows:

“2. This Agreement and any dispute or claim arising out of or in connectionwith it or its subject matter or formation (including non - contractual disputedisputes or claims) shall be governed by and construed in accordance withthe Arbitration and Conciliation Act, 1996 and shall be referred to arbitrationby sole arbitrator and the venue of Arbitration will be at Gurugram inaccordance therewith. In case the parties fail to mutually agree upon theappointment of sole arbitrator within 30 (thirty) days from initiation of

recommendation,the sole arbitrator shall be appointed by the High Courtof Delhi upon application by either party. The language of arbitration willbe English and the Arbitral award will be final and binding on the parties.”

[Emphasis supplied]

2.Mr. Sumeir Ahuja, counsel for the Respondent, does not dispute theexistenceofthearbitrationagreement,however,opposestothemaintainability of the present petition – by contending that jurisdiction doesnot lie with the High Court of Delhi. He submits that since the arbitrationclause specifically provides for the venue of arbitration at Gurugram, Haryana– it is akin to conferring exclusive jurisdiction to the Courts at Gurugram, andtherefore, the jurisdiction of this Court is ousted.

3.He further argues that the Petitioner had filed petition under Section9 of the Act before the Gurugram District Court,[1]and in view of Section 42of the Act, jurisdiction of this Court to entertain the present petition is barred.

4.Mr. Ahuja further submits that Clause 2 of the Agreement designatesHigh Court of Delhi as the appointing court – in its administrative and notjudicial capacity. Since the appointment of an Arbitrator under Section 11 isa judicial function, the territorial jurisdiction of this Court has to be governedby the seat of arbitration only, or in absence of such designated seat, theexclusive jurisdiction clause.

5.He also stresses that not only is the seat of arbitration designated asGurugram, but also Clause 3 of the Agreement stipulates that the Courts in

1 Being Arb. P. 96/2021 dated 27th July, 2021.

Gurugram shall have exclusive jurisdiction in all matters or disputes arisingout of the said Agreement. The said clause reads as under:

“3. This Agreement shall be governed by and construed in accordance withthe Indian laws. The competent courts in Gurugram shall have exclusivejurisdiction in all matters or disputes arising out of this Agreement.”

Thus, he submits that in view of the exclusive jurisdiction clause under theAgreement and the fact that seat of arbitration has been agreed as Gurugram,the jurisdiction for appointment of Arbitrator would only lie before the HighCourt of Punjab and Haryana. In support of his submissions, reliance is placedupon the judgments in BGS SGS Soma JV v. NHPC Ltd.,[2]Kiran Singh andOrs. v. Chaman Paswan and Ors.[3]and AAA Landmark Pvt. Ltd. v. M/sAKME Projects Pvt. Ltd.[4]

6.Per contra, Mr. Anvit Seemansh, counsel for the Petitioner, submitsthat jurisdiction would lie before this Court in view of the doctrine of partyautonomy – which is evident from the Clause itself. He submits that theproposition advanced by the Respondent that the parties have agreed toexclusive jurisdiction by agreeing upon the venue of arbitration is notdisputed. The arbitration proceedings indeed have to anchored at the Court ofcompetent jurisdiction in terms of the Agreement between the parties i.e. atGurugram. However, for appointment of the Arbitrator, since the parties havecategorically and exclusively agreed that jurisdiction would lie only beforethe High Court of Delhi, this Court alone would be competent to entertain thepresent petition.

2 2019 SCC Online SC 1585.

3 AIR 1954 SC 340.

4 2018 SCC OnLine Del 7586.

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7.He further contends that for the appointment of an Arbitrator underSection 11 of the Act, Section 42 of the Act would have no applicability.Therefore, the concern of the Respondent that any further proceedings arisingout of arbitration would also then lie before this Court, is without merit. Insupport of this contention, reliance is placed upon the judgements of thisCourt in Cars24 Services Pvt Ltd. v. Cyber Approach Workspace LLP[5]andOrix Leasing & Financial Services v. One97 Communications Limited.[6]

8.The Court has heard the counsel for the parties. Indeed, the arbitrationclause in the Agreement is unusual. The parties have agreed upon the venueof arbitration to be Gurugram, however, at the same time, they havespecifically conferred jurisdiction for appointment of Sole Arbitrator to theHigh Court of Delhi. Such incongruity in an identical clause, was noticed bythis Court in Cars24 Services (supra) – wherein after examining several caselaws, it was held that in view of an express agreement, the court which hasbeen specifically agreed to be the appointing court would possess theterritorial jurisdiction to entertain the present petition under section 11 of theAct. Thus, the court upheld party autonomy.

9.In the afore-noted case, there is no mention of filing of petition underSection 9 of the Act, which perhaps could be distinguishing – as hereinindeed, the Petitioner had filed petition under Section 9 of the Act seekinginterim measure(s). However, this distinctive factor was considered in Orix

5 2020 SCC OnLine Del 1720.

6 Arb. P. 637/2019 dated 23rd November, 2021.

Leasing (supra), but not found to be of any bearing on jurisdiction of theCourt in light of specified venue in the clause.

10.The Petitioner here, does not dispute that Section 42 of the Act wouldnot apply to the present proceedings, and states that all arbitration proceedingsarising out of the arbitration clause, would be amenable to the exclusivejurisdiction of the Courts in Gurugram. In these circumstances, witharbitration agreement being admitted, and no dispute between the partiesregarding the venue, the Court does not find any justifiable reason to rejectthe petition, in light of the Agreement between the parties.

11.In view of the above, the present petition is allowed. Accordingly, Mr.Zoheb Hussain, Advocate [Contact No.: [REDACTED]] is appointed as theSole Arbitrator to adjudicate the disputes that are stated to have arisen betweenthe parties out of ‘Consultancy Agreement’ dated 9[th]April, 2018..The parties are directed to appear before the Sole Arbitrator as andwhen notified. This is subject to the Arbitrator making necessary disclosuresunder Section 12(1) of the Act and not being ineligible under Section 12(5)of the Act.

13.The Arbitrator will be entitled to charge his fee in terms of theprovisions of the Fourth Schedule appended to the Act.

14.It is clarified that the Court has not examined any of the claims of theparties and all rights and contentions on merits are left open. Both the parties

Signature Not Verified

shall be free to raise their claims/ counter-claims before the Arbitrator inaccordance with law.

15.Accordingly, the present petition is allowed and the pendingapplication is also disposed of.

SANJEEV NARULA, J

DECEMBER 13, 2021nk