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Cites 10 docs - [View All]
Hakam Singh vs M/S. Gammon (India) Ltd on 8 January, 1971
Section 28 in The Indian Contract Act, 1872
A.B.C. Laminart Pvt. Ltd. & Anr vs A.P. Agencies, Salem on 13 March, 1989
Modi Entertainment Network & Anr vs W.S.G.Cricket Pte. Ltd on 21 January, 2003
Rajendra Sethia vs Punjab National Bank on 28 January, 1991
Citedby 1 docs
M/S.Polyblends (India) Pvt Ltd vs M/S.Videocon International ... on 25 May, 2009

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Delhi High Court
U. Can Migrate Consultants Pvt. ... vs Canadian Connections Groups Ltd. on 9 October, 2007
Author: J Malik
Bench: J Malik


Page 2826

1. The controversy in the case in hand pivots around a very interesting question, "Whether parties to a contract may agree to have their disputes resolved by a foreign court of their choice as a neutral forum according to law applicable to that court?" I have heard the counsel for the petitioner but it is unfortunate that the counsel for the respondent did not appear to assist the court. This case was fixed for 3rd October, 2007. Counsel for the respondent did not turn up despite second call till 2.30 p.m. The respondent company was served vide notice dated 12.03.2007 on 15.03.2007 in this case. The order sheet dated, 17.05.2007, before the Registrar, Page 2827 shows that Mr. Amrendra Singh appeared for the respondent. Again on 06.08.2007 Mr. J.K. Chawdhary appeared on behalf of the respondent. On 06.09.2007 Mr. Amrendra Singh proxy counsel appeared on behalf of the respondent. Today none has appeared on behalf of the respondent. Record reveals that no vakalatnama was filed on behalf of the respondent. Since, the respondent was served and represented by an advocate, therefore, the order is being passed in respondent's absentia.

2. The respondent filed a suit under Order xxxvII of the CPC for recovery of Rs. 4,90,000/- along with pendente lite and future interest before the trial court on 17.02.2003. The petitioner moved an application for leave to defend. In para 4 (B) of the application they have taken a specific plea that the jurisdiction to try and entertain the present suit vests with Ontario courts, as per provincial law of Ontario, Canada and it was agreed between the parties that in case of dispute the parties shall be governed by the above said court. However, the trial court presided over by Mr. D.C. Anand, ADJ, did not find favor with this plea vide its order dated 14.02.2006. It, however, granted leave to defend in favor of the petitioner subject to its depositing Rs. 1,45,000/-. Aggrieved by that order the instant petition was filed in this Court.

3. I have perused the copy of contract filed before me. Its relevant portions are reproduced as hereunder:

1. CONTRACT Canadian Connections Group Ltd. having its office located at 245 Galloway Road toronto Ontario M1E 1X5 Canada. Hereinafter called the party of the first part and referred to as the "CONSULTANT".

And Ucan Migration Consultants P. Ltd., having their US office at 1240, I 85 south and Freedom Drive Charlotte, NC 28208 USA and Registered Office in India. Hereinafter referred to as the party of the second part and referred to as the "CLIENT".

Whereas The Client hereby retains the services of the Consultant for the purposes of receiving follow up report from Canadian Authorities with respect to prospective Twenty Eight (28) as per Annexure-A permanent immigration cases/Client's client already filed by the client. The follow up on Application, on behalf of the client and their applicants / accompanying family members, the Consultant hereby accept such mandate, subject to the following terms and conditions.

2. DUTIES OF THE CONSULTANT The Consultant shall:

1. Assess the Client's referred applicant's files for CANADIAN permanent resident immigration.

2. Request the Client for the required information from the applicants;

3. Submit the required information, application and supporting documentation to the processing visa office;

Page 2828

4. Advice the Client for the selection interview with the processing Visa office;

5. Effect all additional written and / or verbal representations to the processing Visa office and related authorities processing the application for permanent resident status of the applicant i.e. immigration office/Embassy/ High Commission as is deemed necessary by the Consultant, advice the client of the ongoing requirement by the Visa office with respects the Client's applications;

6. Never direct contact with the Applicants referred by the Client.

3. x x x x NON REFUNDABLE FEE BY THE CONSULTANT The consultant will not refund any fee to the clients for the reasons given below:

1. If the client fail to make any of the payments as prescribed in the agreement, then the firm will no longer act as my immigration services company and will cease the follow up immediately.

2. If the applicant and their spouse fails medical, security or criminal requirements and if it is determined that the applicant, and my spouse have misrepresented or were untruthful about any material fact to the firm, or visa officer, or immigration officer, or change the disposition regarding immigration to Canada or abandon the application.

3. Where the application is rejected / revoked by the Embassy due to false representation, submission of wrong documents by the client, failing in personal technical /communication interview.

4. This Agreement will supercede all oral, written statements that may have been given / communicated to the Clients by any and all employees of the Consultant on signing this agreement by both the parties.

5. This Consultant shall be governed, interpreted and enforced in accordance with the Provincial Laws of Ontario Canada. All disputes will be subject to Ontario courts Jurisdiction and as per the Provincial Laws of Ontario, Canada.

6. x x x x

4. Counsel for the petitioner has drawn my attention towards three authorities. First is reported in Shriram City Union Finance Corporation Ltd. v. Rama Mishra , wherein it was held:

In case parties under their own agreement expressly agree that their dispute shall be tried by only one of them then the parties can only file the suit in that court alone to which they have so agreed. In the present case, as we have said, through clause 34 of the agreement, the parties have bound themselves that in any matter arising between them under the said contract, it is the courts in Calcutta alone which will have jurisdiction. Once parties bound themselves as such it is not open for them to choose a different jurisdiction as in the present case by filing Page 2829 the suit at Bhubaneshwar. Such a suit would be in violation of the said agreement.

5. He has cited another authority of the Apex Court reported in Hakam Singh v. Gammon (India) Ltd. , which goes to buttress his case.

6. He has also cited another authority reported in New Moga Transport Co. v. United India Insurance Co. Ltd. (2004) 4 SCC 677, it was held that:

By a long series of decisions it has been held that where two courts or more have jurisdiction under CPC to try a suit or proceeding, an agreement between the parties that the dispute between them shall be tried in any one of such courts is not contrary to public policy and in no way contravenes Section 28 of the Indian Contract Act, 1872. Therefore, if on the facts of a given case more than one court has jurisdiction, parties by their consent may limit the jurisdiction to one of the two courts. But by an agreement parties cannot confer jurisdiction on a court which otherwise does not have jurisdiction to deal with a matter.

7. I am also able to locate few authorities reported in Modi Entertainment Network and Anr. v. W.S.G. Cricket PTE. Ltd. , it was held:

In regard to jurisdiction of courts under the Code of Civil Procedure(CPC) over a subject-matter one or more courts may have jurisdiction to deal with it having regard to the location of immovable property, place of residence or work of a defendant or place where cause of action has arisen. Where only one court has jurisdiction it is said to have exclusive jurisdiction; where more courts than one have jurisdiction over a subject-matter, they are called courts of available or natural jurisdiction. The growing global commercial activities gave rise to the practice of the parties to a contract agreeing beforehand to approach for resolution of their disputes there under, to either any of the available courts of natural jurisdiction and thereby create an exclusive or non-exclusive jurisdiction in one of the available forums or to have the disputes resolved by a foreign court of their choice as a neutral forum according to the law applicable to that court. It is a well-settled principle that by agreement the parties cannot confer jurisdiction, where none exists, on a court to which CPC applies, but this principle does not apply when the parties agree to submit to the exclusive or non-exclusive jurisdiction of a foreign court; indeed in such cases the English courts do permit invoking their jurisdiction. Page 2830 Thus, it is clear that the parties to a contract may agree to have their disputes resolved by a foreign court termed as a "neutral court" or "court of choice" creating exclusive or non-exclusive jurisdiction in it.

It was further held:

It is a question of interpretation, governed by the proper law of the contract, whether a jurisdiction clause is exclusive or non-exclusive, or whether the claim which is the subject-matter of the action falls within its terms. If there is no express choice of the proper law of the contract, the law of the country of the chosen court will usually, but not invariably, be the proper law.

8. In Man Roland Druckimachinen AG v. Multicolour Offset Ltd. and Anr. , it was held:

9. Undoubtedly, when the parties have agreed on a particular forum, the courts will enforce such agreement. This is not because of a lack or ouster of its own jurisdiction by reason of consensual conferment of jurisdiction on another court, but because the court will not be party to a breach of an agreement. Such an agreement is not contrary to public policy nor does it contravene Section 28 or Section 23 of the Contract Act. This has been held in Hakam Singh v. Gammon (India) Ltd. , A.B.C. Laminart (P) Ltd. v. A.P. Agencies and Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd. . The decision of the Delhi High Court in Rajendra Sethia v. Punjab National Bank relied on by the Commission which holds to the contrary is, therefore, clearly erroneous.

9. In a recent authority reported in Harshad Chiman Lal Modi v. DLF Universal and Anr. while quoting Halsbury's Laws of England, (4th edition), Reissue, Vol. 10; para 317; it was held:

317. Consent and waiver. Where, by reason of any limitation imposed by statute, charter or commission, a court is without jurisdiction to entertain any particular claim or matter, neither the acquiescence nor the express consent of the parties can confer jurisdiction upon the court, nor can consent give a court jurisdiction if a condition which goes to the jurisdiction has not been performed or fulfillled. Where the court has jurisdiction over the particular subject matter of the claim or the particular parties and the only objection is whether, in Page 2831 the circumstances of the case, the court ought to exercise jurisdiction, the parties may agree to give jurisdiction in their particular case; or a defendant by entering an appearance without protest, or by taking steps in the proceedings, may waive his right to object to the court taking cognizance of the proceedings. No appearance or answer, however, can give jurisdiction to a limited court, nor can a private individual impose on a judge the jurisdiction or duty to adjudicate on a matter. A statute limiting the jurisdiction of a court may contain provisions enabling the parties to extend the jurisdiction by consent.

It was further held:

It is, no doubt true, as submitted by Ms. Malhotra that where two or more courts have jurisdiction to entertain a suit, parties may be agreement submit to the jurisdiction of one court to the exclusion of the other court or courts. Such agreement is not hit by Section 28 of the Contract Act, 1872, nor such a contract can be said to be against public policy. It is legal, valid and enforceable.

Before more than thirty years, such question came up for consideration before this Court in Hakam Singh v. Gammon (India) Ltd. . It was the first leading decision of this Court on the point. There, a contract was entered into by the parties for construction of work. An agreement provided that notwithstanding where the work was to be executed, the contract 'shall be deemed to have been entered into at Bombay' and Bombay Court 'alone shall have jurisdiction to adjudicate' the dispute between the parties. The question before this Court was whether the court at Bombay alone had jurisdiction to resolve such dispute.

10. In National Thermal Power Corporation v. Singer Company and Ors. , it was held:

13. Dicey & Morris in The Conflict of Laws, 11th edn., Vol. II ('Dicey') refer to the 'proper law of a contract' thus:

Rule 180 - The term 'proper law of a contract' means the system of law by which the parties intended the contract to be governed, or, where their intention is neither expressed nor to be inferred from the circumstances, the system of law with which the transaction has its closest and most real connection.

The expression 'proper law of a contract' refers to the legal system by which the parties to the contract intended their contract to be governed. If their intention is expressly stated or if it can be clearly inferred from the contract itself or its surrounding circumstances, such intention determines the proper law of the contract. In the words of Lord Herschell, L.C.:

Page 2832 ...In this case, as in all such cases, the whole of the contract must be looked at, and the contract must be regulated by the intention of the parties as appearing from the contract. It is perfectly competent to those who, under such circumstances as I have indicated, are entering into a contract, to indicate by the terms which they employ which system of law they intend to be applied to the construction of the contract, and to the determination of the rights arising out of the contract.

11. In A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem , it was held:

21. From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like 'alone', 'only', 'exclusive' and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim 'expressio unius est exclusio alterius' - expression of one is the exclusion of another - may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed.

12. In the light of the discussion, I hold that above said court in Canada has the jurisdiction as per clause 5 of the above said Contract. Delhi courts have no jurisdiction. I set aside the order passed by the trial court. The plaint be returned to the respondent for filing it before the proper court. Revision petition stands accepted and the case stands disposed of.