Update on ex parte orders and exclusive jurisdiction

In two recent cases, the Supreme Court of India has rendered important decisions in the areas of exclusive jurisdiction clauses and ex parte orders.

Exclusive jurisdiction

On 3 July, in M/s Swastik Gases P Ltd v Indian Oil Corp Ltd, the court held that when an agreement provides for the jurisdiction of a certain court, even without using ouster words such as “exclusive”, “only” or “alone”, the designated court will have exclusive jurisdiction over the contract.

In this case, an agreement was executed in Kolkata, while the cause of action arose in Jaipur. Clause 17 of the agreement provided for arbitration in accordance with the Arbitration and Conciliation Act, 1996, without specifying any seat. Clause 18 stated: “The Agreement shall be subject to jurisdiction of the Courts at Kolkata.”

The appellant had filed a petition for appointment of a tribunal before Rajasthan High Court, on the basis that the parties were carrying on business in Jaipur, the goods were located in Jaipur, and the agreement was signed in Jaipur. The respondent opposed the petition on the basis of clause 18 of the agreement.

Vivek Vashi is the mainstay of the litigation team at Bharucha & Partners, where Shamika Haldipurkar is an associate.