Kalpataru Power Transmission Limited v. Bharat Petroleum Corporation Limited

At a glance

Parties

Kalpataru Power Transmission Limited (petitioner) v. Bharat Petroleum Corporation Limited (respondent)

Case no.

ARB.P. 622/2019

Court

High Court of Delhi at New Delhi (Jyoti Singh, J.)

Forum and rules

Petition under Section 11 of the Arbitration and Conciliation Act, 1996

Treaty

Arbitration clause (Clause 19) of the Agreement dated 14 March 2014

Outcome

Petition allowed (22 January 2020). The Court upheld its territorial jurisdiction and appointed Mr. Justice Swatanter Kumar as sole arbitrator.

Amount

No order as to costs. The arbitrator's fee is to be fixed under the Fourth Schedule of the Act.

The dispute

Kalpataru Power Transmission Limited and Bharat Petroleum Corporation Limited signed an Agreement on 14 March 2014. Its arbitration clause refers disputes to the sole arbitration of BPCL's Director (Marketing) or an officer he nominates. Kalpataru asked the High Court of Delhi under Section 11 of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator. It relied on Clause 19(h), which says that the courts of the named city "alone" have jurisdiction over applications and over awards. The Hindi version of the Agreement names Delhi in this clause; the English version leaves it blank. BPCL's only objection was territorial jurisdiction. It relied on Clause 21, under which the Agreement is deemed made in Noida and the contractor's performance is due in Noida (named in the Hindi version only). BPCL also pointed out that the Agreement was executed and stamped in Uttar Pradesh, that neither party carries on business in Delhi, and that the work was done outside Delhi.

Key holdings

1. Clause 21 makes the Agreement deemed to have been made in Noida. It gives the Noida courts exclusive jurisdiction over disputes about the contractor's performance, that is, over the subject matter of a suit. ¶ 12
2. Clause 19(h) is part of the arbitration clause. By using the words 'alone' and 'only', and by referring to awards made by the sole arbitrator, the parties gave the Delhi courts exclusive jurisdiction over arbitration proceedings. The two clauses are therefore separate covenants: one covers the subject matter of a suit, the other the subject matter of the arbitration. ¶ 12
3. Following BALCO (Bharat Aluminium Co. v. Kaiser Aluminium Technical Services), 'subject matter of the arbitration' in Section 2(1)(e) is distinct from 'subject matter of the suit'. It points to the court of the seat, which exercises supervisory control. An agreement on the seat is analogous to an exclusive jurisdiction clause. ¶¶ 13–14
4. Applying the Delhi High Court's earlier decisions in Global Credit Capital and Ramandeep Singh Taneja, the specific arbitration clause decides which court has jurisdiction over arbitration matters. Clause 19(h) therefore governs, and the High Court of Delhi has jurisdiction over the Section 11 petition. ¶¶ 15–17
5. Mr. Justice Swatanter Kumar, a former Judge of the Supreme Court of India, is appointed sole arbitrator. He must make a disclosure under Section 12 before entering on the reference. His fee is set by the Fourth Schedule. There is no order as to costs. ¶¶ 18–22

Procedural history

1. 14 March 2014The parties sign the Agreement, which contains the arbitration clause (Clause 19).
2. 17 December 2019The High Court of Delhi reserves judgment on the Section 11 petition.
3. 22 January 2020Judgment: the Court upholds its territorial jurisdiction and appoints Mr. Justice Swatanter Kumar as sole arbitrator.

Tribunal, counsel and experts

Decided by

• Jyoti Singh Judge, High Court of Delhi

For the claimant

Shashank Garg · Tariq Khan · Aastha Jain · Sunil Mittal · Digit Saikia

For the respondent

Rakesh Kumar · Anubha Singh

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Keywords

• Section 11 Arbitration and Conciliation Act 1996
• appointment of arbitrator
• territorial jurisdiction
• exclusive jurisdiction clause
• seat of arbitration
• subject matter of the arbitration
• Section 2(1)(e)
• BALCO
• Bharat Aluminium v Kaiser Aluminium
• Hindi and English versions
• Delhi
• Noida
• Bharat Petroleum
• India
• unilateral appointment clause

Summary generated with AI from the published documents — refer to the award for the authoritative text.