India: Supreme Court Provides Clarity On Exclusive Jurisdiction Clause In Arbitration Agreement

Last Updated: 28 June 2017
Article by Vikrant Rana and Akshay Gupta

On April 19, 2017, a two-judge bench of the Supreme Court bench passed their judgment in Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and Ors.1 holding that in cases where the parties include an exclusive jurisdiction clause in an arbitration agreement designating a particular place as the seat of the arbitration, the Court in whose jurisdiction the seat of the arbitration falls would have sole jurisdiction to entertain petitions in respective of non-arbitrable issues arising out of the agreement, to the exclusion of any other Courts.

Use of Exclusive Jurisdiction Clauses in Agreements

Exclusive Jurisdiction Clauses are widely used by parties to an agreement as often it may not be convenient for the parties to sue at the place at which the cause of action for the dispute may have arisen. In such cases the exclusive jurisdiction clause offers a party the opportunity to establish a convenient pre-determined place where disputes arising in regard to the contract would be referred to, if and when they arise.

Factual Background

  • Datawind Innovations Private Limited (hereinafter referred to as Respondent No.1) having its registered office at Amritsar in Punjab was engaged in the manufacture, marketing and distribution of mobile phones, tablets and other accessories.
  • Indus Mobile Distribution Private Limited (hereinafter referred to as the Appellant) wished to conduct business with Respondent No.1, acting as their Retail Chain Partner.
  • In furtherance of the above, an agreement dated October 25, 2014 was entered into between the Parties with Respondent No.1 supplying goods to the Appellant at Chennai from New Delhi.
  • The Dispute Resolution Mechanism was provided under Clauses 18 and 19 of the agreement dated October 25, 2014. Clause 18 provided that in case of disputes between the parties, if the dispute could not be resolved by discussion between senior officials of the parties, then the matter would finally be settled through arbitration, presided by a sole arbitrator, conducted under the provisions of the Arbitration and Conciliation Act, 1996 with the seat of the Arbitration being Mumbai.
  • Further, Clause 19 provided that all disputes arising out of, or in connection with the Agreement would be subject to the exclusive jurisdiction of the Courts of Mumbai alone.
  • Disputes arose between the parties and Respondent No.1 sent a notice dated September 25, 2015 to the Appellant. Further, the arbitration clause provided under Clause 18 of the Agreement was invoked. The Appellant denied the contents of the notice and asked Respondent No.1 to withdraw the same.
  • In the meantime, Respondent No. 1 filed a petition before the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") seeking various interim reliefs.
  • In October 2015 Respondent No.1 filed a second petition before the Delhi High Court under Section 11 of the Act to appoint the sole Arbitrator.

The Impugned Decision of the Delhi High Court

  • The Delhi High Court while disposing off the two petitions held that as no part of the cause of action arose in Mumbai, the Courts of Mumbai would have no jurisdiction over the matter with only the Courts of Amritsar, Chennai and Delhi having jurisdiction.
  • Since, the Delhi High Court had been approached first, it would continue to have jurisdiction in the matter. Further, the Court restrained the Appellant from transferring, alienating or creating any third-party interests in the Appellant's property in Chennai and also appointed the sole Arbitrator.

Issue before the Supreme Court

In case no cause of action arises at the place where the seat of arbitration is situated, whether the Court within whose jurisdiction the seat of arbitration is located would have exclusive jurisdiction in all proceedings.

Decision of the Supreme Court

  • The Supreme Court referring to its earlier judgments in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc2, Enercon (India) Ltd. v. Enercon Gmbh3, and Reliance Industries Ltd. v. Union of India4, the Court observed that in its previous judgments, it has time and again been reiterated that once the seat of arbitration has been fixed, it would be in the nature of an exclusive jurisdiction clause as to the courts which exercise supervisory powers over the arbitration.
  • Further, in Union of India v. Reliance Industries Limited and Others5, the Court referred had held that the supervisory jurisdiction of courts over the arbitration goes along with seat.
  • Under the law of Arbitration, a reference to seat is a concept that has been developed to facilitate parties to choose a neutral venue for Arbitration. It is not necessary for any cause of action to have arisen at the neutral venue as the provisions of Section 16 to 21 of the Code of Civil Procedure, 1908 would not be attracted.
  • Therefore, while setting aside the impugned order of the Delhi High Court with regard to its jurisdictional power, the Supreme Court held that since the parties had established the seat of the arbitration at Mumbai, exclusive jurisdiction would vest in Mumbai, the Courts of Mumbai would have exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties.


This decision of the Supreme Court is a welcome clarity on the issue that often arises with the parties to a contract approaching Courts whose jurisdiction has been ousted by the terms of the exclusive jurisdiction clause in the agreement. Parties should ensure that the seat of arbitration is selected by them after due consideration as this judgment prevents forum shopping, once the seat of arbitration is agreed to by the parties.


 1 Civil Appeal Nos. 5370-5371 Of 2017

2 (2012) 9 SCC 552

3 (2014) 5 SCC 1

4 (2014) 7 SCC 603

5 (2015) 10 SCC 213

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Vikrant Rana
Similar Articles
Relevancy Powered by MondaqAI
Vaish Associates Advocates
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Vaish Associates Advocates
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions