Calcutta High Court
Fairfest Media Limited vs Ite Group Plc & Ors on 23 February, 2017
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
GA No.754 of 2015
With
CS No.329 of 2014
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
FAIRFEST MEDIA LIMITED
Versus
ITE GROUP PLC & ORS.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 23rd February, 2017.
Appearance:
Mr. Debnath Ghosh, Adv.
Mr. Kumarjit Banerjee, Adv.
Mr. Sachin Shukla, Adv.
Ms. Shreya Singh, Adv.
Ms. Namrata De, Adv.
Mr. Ratnanko Banerji, Adv.
Mr. Aditya Kanodia, Adv.
Ms. Urmila Chakraborty, Adv.
Mr. Arindam Das, Adv.
This is an application for revocation of leave under Clause 12 of the Letters Patent. The petitioner is the defendant no.1 in the suit. The application is filed after filing of the written statement. The grounds for revocation of leave under Clause 12 of the Letters Patent are existence of a non-exclusive jurisdictional clause and the balance of convenience.
Prior to this application, the plaintiff filed an interlocutory application praying, inter alia, for injunction 2 restraining the defendants from parting with confidential information gathered during the mutual non-disclosure agreement period. The interlocutory application was heard at length. At that stage, the issue of jurisdiction came for consideration. The applicant at that time submitted that the jurisdictional issue may be tried at the time of trial. The trial of the suit has not yet commenced.
In the meantime this application has been filed. Mr. S.N. Mukherjee, the learned senior counsel appearing on behalf of the petitioner submits that in view of the non-exclusive jurisdictional clause in the Mutual Non-Disclosure Agreement (hereinafter referred to as NDA), this Court has no jurisdiction. It is submitted that no part of the cause of action has arisen within the jurisdiction of this Court inasmuch as it would appear ex facie from the NDA that the agreement was executed by the plaintiff at Belvedere Road, Alipore, outside the jurisdiction of this Court and the applicant is in London, outside the jurisdiction of this Court. The alleged confidential information was also supplied outside the jurisdiction.
The other grounds taken for revocation is the forum inconvenience or in other words that the balance of convenience is against this Court entertaining the suit. The grounds for revocation are summarised in support thereof in paragraph 20 of the petition.
3The grounds are:
a) All relevant witnesses and in particular those pertaining to use of confidential information for organizing of trade fair are outside the jurisdiction of this Hon'ble Court in Mumbai, United Kingdom and Singapore.
b) Expenses of bringing such witnesses for any trial of the suit in Kolkata would be exorbitant.
c) Documentary evidence pertaining to the subject matter of the suit is also outside the jurisdiction of this Hon'ble Court.
d) No part of the cause of action has arisen within the territorial limits of this Hon'ble Court and this Hon'ble Court is not the natural forum for institution or adjudication of the instant suit.
e) The non-disclosure agreement also has a non-exclusive jurisdiction clause providing for the Court of England & Wales to have jurisdiction in respect of any claim, dispute or matter arising under or in connection with such agreement.
f) The agreement dated 15th March, 2013 of which enforcement is sought for has been executed by and between the parties, outside the jurisdiction of this Hon'bel Court. 4
g) The records in relation to the instant case are lying at United Kingdom and Belvedere Road, Alipore, outside the jurisdiction of this Hon'ble Court.
h) The travel trade shows (which are the subject matter of the present suit) are to be held at Mumbai and Bandra, outside the jurisdiction of this Hob'ble Court.
i) The advertisement of the said travel shows have been published in the Magazine Wanderlust published from Mumbai.
j) The media partner of the applicant is also operation from Mumbai.
k) In such scenario it will be unnecessarily burdensome for the applicant in the event it is compelled to contest the present suit before this Hon'ble Suit.
In support of his submission that such a non-exclusive jurisdictional clause would not confer jurisdiction to this Court to receive, try and determine the suit, the learned senior counsel has referred to the following decisions:-
i) Modi Entertainment Network and Anr. vs. W.S.G. Cricket PTE. Ltd. [(2003)4 Supreme Court Cases 341];
ii) Pantaloon Retail (India) Ltd. vs. Amer Sports Malaysia SDN BHD [2012 SCC Online Del 2677];5
iii) Bush Foods Overseas Pvt. Ltd. vs. Sentinel Capital PTE Ltd and Anr. [2012 (131) DRJ 55];
iv) Piramal Health care Limited (Formerly Known as Nicholas Piramal India Ltd.) vs. Diasorin S.P.A [2010 SCC Online Del 2897];
v) Deutsche Bank AG and Anr. vs. Highland Crusader Offshore Partners LP and Ors. [(2009) EWCA Civ 725];
vi) BP Plc -and- National Union Fire Insurance Co. and Ors.
[2004] EWHC 1132 (Comm) It is submitted that the ratio of the aforesaid decisions would lead to an irresistible conclusion that if a contract contains a non-exclusive jurisdictional clause, the parties would be taken to have mutually agreed that the country in which jurisdiction may be exercised pursuant to the clause is a convenient forum and on that score the Court would insist the parties to approach the Court at England or Wales which would otherwise be the convenient forum in view of the reasons mentioned in paragraph 20 of the petition.
On behalf of the plaintiff, Mr. Ratnanko Banerjee, the leaned senior counsel has referred to a Division Bench judgment of the Delhi High Court in Pantaloon Retail India Pvt. Ltd. vs. Amer Sports Malaysia SDN BHD [2012 SCC OnLine Del 3183] and submits that the sheet anchor of Mr. Mukherjee's argument based on the leaned Single Judge's judgment in Pantaloon Retail India Pvt. Ltd. 6 (Supra) has since been overruled by the Hon'hle Division Bench. It is submitted that the judgment which are relied upon in this proceeding were duly considered by the Division Bench of the Delhi High Court. The Division Bench has also taken note of the severalty clause which is also present in the instant agreement being clause no.10 and in view of the said Division Bench judgment reversing the order of the Trial Court, the said judgment of the learned Single Judge lost all its efficacy.
At the stage of deciding an application under clause 12 of the Letters Patent, the Court is required to confine its scrutiny as to the averments made in the plaint. The balance of convenience is also taken into consideration. A bare reading of the plaint would show that the plaint discloses cause of action against the defendant no.1. The defendant no.1 is also not alleging that the plaint does not disclose any cause of action against the defendant no.1. The plaintiff in order to invoke the jurisdiction of this Court under Clause 12 of the Letters Patent has relied upon paragraphs 6, 7, 9, 11, 12, 15, 16, 17, 18, 20, 21, 22, 23 and 25. The averments made in the said paragraphs if taken to be true and correct without any doubt give the cause of action to the plaintiff. Moreover the issues raised at paragraph 20 of the petition can only be decided upon evidence at the trial. Accordingly, the contention that the plaint does not disclose any cause of action or no part of cause of action as against the 7 applicant has arisen within the jurisdiction of this Court on the basis of the averments made in the plaint cannot be held to be correct. This observation is, however, subject to the issues that may be raised at the trial of the suit. Similarly the question of balance of convenience is a matter to be tried as the defendant no.1 is also carrying on business in India and it cannot be said at this stage that trial at Kolkata is likely to cause an inconvenience to the defendant. Moreover the plaintiff being the dominis litis has the right to choose its own forum. The decisions cited by Mr. Mukherjee at best could be a defence to an action if launched by the plaintiff restraining the said defendant from initiating any proceeding in England or Wales.
The Division Bench of the Delhi High Court in Pantaloons had the occasion to consider similar non-exclusive jurisdiction clauses as would appear from paragraphs 2, 3, 4, 5 and 6 of the judgment which are reproduced below :
"2. Clause 22 of the Agreement in question reads as under :-
"22. GOVERNING LAW.
This Agreement shall be governed by the laws of Malaysia and the parties hereby submit to the non-exclusive jurisdiction of the Courts of Malaysia residing at Kuala Lumpur."
3. Noting the decisions reported at (2004) 4 SCC 341 Modi Entertainment Network v. W.S.G. Cricket Pte Ltd., 172 (2010) DLT 131 Parimal Healthcare Ltd. v. Diasorin S.P.A and relying upon 8 them and distinguishing the decisions reported as (2008) 1 SCC 618 Laxman Prasad v. Prodigy Electronics Ltd., 2006 Can LJ 37880 Gary Sugar v. Megawheel Technologies Inc., (2012) SGC AA 16 Orchand Capital I Ltd. v. Ravindra Kumar Jhunjhunwala, (1992) 3 SCC 551 NTPC v. Singer Com. and 2009 (3) Arb. Lr. 162 (Delhi) Max India Ltd. v. General Binding Corporation, the learned Single Judge has taken the view that where by consent, even with respect to a non- exclusive jurisdiction clause, parties by consent vest jurisdiction in a foreign court, the principles of private international law would require parties to litigate only at the forum of their choice.
4. Suffice would it be for us to note that the two decisions relied upon by the learned Single Judge do hold that even a non- exclusive jurisdiction clause would require the dispute to be resolved at the forum of the choice, but we find in the instant case, that the learned Single Judge has not noted a prior clause in the contract, being Clause No. 18 which reads as under:-
"18. SEVERABILITY Should any section, sentence, provision, paragraph or part of this Agreement, for any reason whatsoever, be adjudged by any court of competent jurisdiction, or be held by any other competent authority in the Territory having jurisdiction in the premises, to be invalid, unenforceable or illegal, such judgment or holding shall not affect, impair or invalidate the remainder of this 9 Agreement but shall be confined in its operation to the section, sentence, provision, paragraph or part of this Agreement directly involved in the matter, controversy or proceeding in which such judgment, holding, finding or ruling shall have been rendered, and the remainder of this Agreement shall remain in full force in effect."
5. A bare perusal of Clause 18 would reveal that the parties have envisaged a situation where either party has got adjudged from any Court of competent jurisdiction a provision of the Agreement to be invalid, unenforceable or illegal, requiring the same not to affect the remaining agreement.
6. Ex-facie, the parties have retained jurisdiction in the courts of competent jurisdiction to try issue pertaining to any provision of the contract between the parties on the subject of it being invalid, unenforceable or illegal."
Under such circumstances, this application for revocation of Leave under Clause 12 of the Letters Patent is dismissed.
However, it is made clear that this shall not prevent the defendant no.1 to raise these issues at the trial.
(SOUMEN SEN, J.) B.Pal/S.Kumar