IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR.
S.B.Civil Arbitration Application No.49/2008 Ms. Swastik Gases Pvt. Ltd. Vs. The Indian Oil Corporation Ltd.
Date of order : 13.10.2011 HON'BLE MR. JUSTICE PREM SHANKER ASOPA Mr. Ashok Kumar Pareek, for the applicant. Mr. Sudhanshu Kasliwal, Senior Counsel with Mr. RN Vijay, for the non-applicant. REPORTABLE Heard learned counsel for the parties.
(2). This is an Arbitration Application filed under Section 11 of the Arbitration & Conciliation Act, 1996 for appointment of Arbitrator in respect of dispute raised between the parties regarding terms and conditions of the contract dated 1.10.2002.
(3). Briefly stated the facts of the case are that the applicant-Company and erstwhile non-applicant Company which has now merged in Indian Oil Corporation Ltd. entered into an agreement for sale of lubricants and specialties and the applicant-Company was made as consignment agent of the non-applicant Company. In the said agreement, Clause-17.0 relates to arbitration. Within a span of few months, the applicant-Company had accumulated a large unsold stock under CA account due to slow and unwilling lifting of lubricant by retail outlets and market. Despite the fact that when the existing stock of lubricant could not be lifted by the applicant-Company, the IBP Company (now IOCL) forced the applicant-Company to add more fresh stock for retail outlets and market every month, which was not possible in any manner because the applicant- Company came in
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financial strain. Finally, in November, 2003, the applicant-Company had requested the IBPL Company (now IOCL) either to liquidate the applicant-Company's stock or to take the entire stock of about 9.23 kls. of lubricant in CA account, transferred back to the company and to make the payment of value of the stock to the applicant-Company. On the aforesaid request, the non-applicant IBP Company (now IOCL) created a dispute and informed the applicant-Company that the total stock in CA account instead of 9.237 Kls. was 6.064 Kls. only. However, when for almost a year, the dispute could not be resolved, a Meeting was held between the representative of the non-applicant Company and Director of the applicant-Company and it was agreed that the IBP Company (now IOCL) shall lift the entire stock and would make the payment of value of the stock by 20.01.2005. But, nothing has been done by the non-applicant Company till date. Various correspondence were made between the parties, but nothing had happened in the matter. On 16.07.2007 (Annexure/5), the legal notice was also sent by the applicant-Company to the non-applicant company either to resolve the dispute immediately or to refer the matter to the Arbitrator for decision as per Clause-17.0 of the Agreement (Annexure-1). But, the non-applicant company did not take care of it. Hence, this application for appointment of Arbitrator has been filed by the applicant-company.
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(4). Counsel for the non-applicant Company in his reply has raised two objections : -
(ii). As per Clause No.18 of Consignment Agency Agreement relating to the jurisdiction, the agreement shall be subject to the jurisdiction of the courts at Kolkata. Therefore, this Court has no territorial jurisdiction.
(5). Counsel for the non-applicant Company submits that when certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. In support of which, counsel for the non-applicant Company has placed reliance on a judgment of the Supreme Court reported in (2009) 3 Supreme Court Cases 107 titled as Rajasthan State Electricity Board Vs. Universal Petrol Chemicals Limited on the issue of Ouster clause and has referred more particularly Para No.23 of the judgment wherein the Supreme Court while dealing with the judgment reported in (1989) 2 SCC Page 163 titled as A.B.C. Laminart (P) Ltd. v. A.P. Agencies, Para 21 has been dealt with.
(6). Before proceeding further para 23 of the judgment passed in Rajasthan State Electricity Board (supra) runs as under :-
23. In A.B.C. Laminart (P) Ltd. v. A.P.Agencies this Court stated thus :(SCC pp.175-76, para 21)
21. From the foregoing decisions it can be reasonably deducted that where such an ouster clause occurs, it
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is pertinent to see whether there is 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 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.
(Emphasis supplied) (7). In the case of Rajasthan State Electricity Board Vs. Universal Petrol Chemicals Limited reported in (2009) 3 Supreme Court Cases 107, Supreme Court has considered Section 28 of Civil Procedure Code, 1908 and further Section 2(c), 20, 31(3), (4) and 41 of Arbitration & Conciliation Act, 1996. After detailed consideration of the said provision of law, in arbitration clause 31 and specified Ouster Clause in the Second purchase order dated 02.12.1987 wherein it has been mentioned that all disputes, differences or questions whatever which may arise between the purchaser and the supplier upon or in relation with or in connection with the contract shall be deemed to have arisen at Jaipur (Rajasthan) and no other Court other than the Court at Jaipur (Rajasthan) shall have jurisdiction to entertain or try the same has held that the Clause in the Second purchase order is Ouster Clause, therefore, only the Court at
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Jaipur alone will have jurisdiction. However, in case of Rajasthan State Electricity Board (supra), the judgment reported in 1989 (2) SCC 163 titled as A.B.C. Laminart (P) Ltd. v. A.P. Agencies was discussed wherein it has been held that 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.
(8). I have gone through the record of the Arbitration Application and further considered the rival submissions of the parties.
(9). Having considered the aforesaid judgment cited supra, Clause No.18 of the agreement, it has been agreed by both the parties that The agreement shall be subject to jurisdiction of the Courts at Kolkata. Therefore, an intention to exclude jurisdiction of all other Courts may in such cases be inferred, therefore, I am of the view that the present case is covered by the judgment of Supreme Court reported in (1989) 2 SCC Page 163 titled as A.B.C. Laminart (P) Ltd. v. A.P. Agencies and I leave another objection of validity of the agreement open for the competent Court.
(10). Accordingly, I am of the view that this Court has no territorial jurisdiction to entertain the application. This application was filed on 2.5.2008, the applicant is at liberty to file the Arbitration Application at Kolkata High Court.
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(11). The arbitration application is dismissed for want of territorial jurisdiction.
(PREM SHANKER ASOPA),J.
N.Gandhi 8 All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.
Naval Kishore Gandhi Jr.PA