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O.M.P. No. 310/2015

1st July, 2015


..... Petitioner
Through: Mr. Amit Sibal, Senior Advocate with
Mr. Sandeep S. Ladha, Advocate, Mr.
Yashvardhan, Advocate, Mr.
Davender Singh, Advocate and Mr.
Piyush Singh, Advocate.

..... Respondents

To be referred to the Reporter or not?

This is a petition under Section 9 of the Arbitration &

Conciliation Act, 1996. Relief prayed in this petition is for stay against
invocation of the letter of credit in the sum of Rs.2.10 crores.

Between the parties there exists an agreement dated 30.12.2008

for supply of natural gas by the respondent no.1 to the petitioner. It is with
respect to this agreement that disputes have arisen and which agreement
contains an arbitration clause.
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In the petition, territorial jurisdiction of this Court is invoked in

terms of the averments in para 36, and which para 36 reads as under:36. That this Honble Court has the jurisdiction to entertain and
adjudicate the present petition in terms of Article 15.6 and 20.2 of
the GSA dated 30.12.2008. It is submitted that Article 15.6
(Alternative 2)(a)(iii) provides that the venue of arbitration shall be
New Delhi. Further, Article 20.2 categorically provides that the
Courts at Delhi shall have exclusive jurisdiction over the
enforcement of an award pursuant to Arbitration under Article 15.6
and in relation to any petition for interim relief, which reads as
20.2 The Courts at Delhi shall have exclusive jurisdiction over
the enforcement of an award pursuant to Arbitration under Article
15.6 and in relation to any petition for interim relief.
Further, the registered office of the GAIL is based at Delhi.

It is settled law that parties by consent cannot confer

jurisdiction on a court which does not have any. It is only if the courts at
New Delhi otherwise had jurisdiction then the clause of the courts at New
Delhi to have exclusive jurisdiction, would be of any effect.

So far as a contractual matter is concerned, three aspects give

courts jurisdiction vide A.B.C. Laminart Pvt. Ltd. & Anr.

Vs. A.P.

Agencies, Salem, AIR 1989 SC 1239. The three aspects are (i) where the
contract is executed, (ii) where the contract is to be performed and (iii)
where the payment under the contract has to be made.

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The fourth ground for invocation of territorial jurisdiction can

be on the ground that if the respondent is a company and cause of action has
accrued qua the branch office of company in Delhi. Merely because a
company has its head office or registered office at New Delhi will not confer
jurisdiction unless cause of action also has accrued at the place where the
corporate office is or any branch office is situated or the company has no
branch office. This is the ratio of the judgment of the Supreme Court in the
case reported as M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad
Trading Company (1991) 4 SCC 270. It is noted that in the present case the
respondent no.1/Company has various branch offices including at Bharuch
where the cause of action has arisen.

As per para 36 of the petition which has been reproduced

above, it is not stated that the agreement dated 30.12.2008 was executed at
Delhi. A perusal of this agreement dated 30.12.2008 nowhere shows that it
is written therein that the same is executed at Delhi. Therefore so far as
execution of contract is concerned, the same is not at Delhi and consequently
qua the first aspect of contractual matters, this Court would have no
territorial jurisdiction. Qua the second aspect of performance it is seen that
the respondent no.1 has to contractually supply the gas, i.e perform the
contract, at the plant of the petitioner situated at Bharuch, Gujarat i.e not at
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Delhi. Thus even on the second aspect with respect to a contractual matter
this Court would not have territorial jurisdiction. So far as the third aspect
of payment is concerned, para 36 of the petition reproduced above does not
make any averment that the petitioner used to make the payment to the
respondent no.1 at Delhi. On a query to the counsel for the petitioner, it is
conceded that payment is being made by the petitioner to the respondent
no.1 at Bharuch in Gujarat. Therefore, even qua the third ingredient with
respect to contractual matter of payment, this Court would not have
territorial jurisdiction. As already stated above, merely because respondent
no.1s corporate office/registered office/head office is situated at Delhi will
not give territorial jurisdiction unless part of cause of action had arisen
within the territorial jurisdiction of the courts at Delhi.

In view of the above, it is clear that this Court does not have the

territorial jurisdiction to decide the matter. Petition is accordingly dismissed

on account of lack of territorial jurisdiction with liberty to the petitioner to
approach the court having territorial jurisdiction.

JULY 01, 2015

OMP No.310/2015


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