Since parties as per Sec.20 of A&C Act agreed to place of arbitration, in such circumstances, territorial jurisdiction would lie as per agreement:P&H HC

Read Order: Aanchal Sharma And Others v. Avanse Financial Services Limited

LE Staff

Chandigarh, September 28, 2021: While considering an Appeal pertaining to a loan agreement, the Punjab and Haryana High Court has observed that the parties as per Section 20 of the Arbitration and Conciliation Act, 1996, have agreed to the place of arbitration, which was to be at Mumbai and so, in such circumstances, territorial jurisdiction as such would lie as per the agreement inter se the parties.

The present petition, which had been filed for appointment of an independent person as a sole Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, in pursuance of the loan agreement which was for the purposes of an Education loan, which was entered inter se the parties, the Bench of Justice G.S.Sandhawalia opined that petition on account of lack of jurisdiction was not maintainable.

Herein, a perusal of the paper-book showed that on account of some outstanding, notices were issued to the applicants demanding Rs.19,22,541 on March 15,2019 .The same was replied to the extent that the instalments were being paid regularly as per the schedule. Similarly, notice was also issued by the respondent-company (Avanse Financial Services Limited) claiming Rs.16,22,515, which was stated to be due on May 27,2021. The notice was again replied by the applicants that 69 instalments out of 120 had been paid and the loan is to be closed in March, 2025.

The Clause 15.1.1 of the Agreement as such further provided that venue for arbitration is at Mumbai and Clause 15.2 further provided that Court of competent jurisdiction at Mumbai would have jurisdiction to challenge the award passed by the sole Arbitrator.

Thus, the Bench concluded that since the parties had agreed to the place of arbitration, which was to be at Mumbai, in such circumstances, territorial jurisdiction as such would lie as per the agreement inter se the parties.