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Gujarat NRE Coke Limited & Another v/s Jindal Steel & Power Limited & Others


Company & Directors' Information:- JINDAL POWER LIMITED [Active] CIN = U04010CT1995PLC008985

Company & Directors' Information:- GUJARAT NRE COKE LTD [Under Liquidation] CIN = L51909WB1986PLC040098

Company & Directors' Information:- JINDAL STEEL AND POWER LIMITED [Active] CIN = L27105HR1979PLC009913

Company & Directors' Information:- STEEL CORPORATION OF GUJARAT LIMITED [Amalgamated] CIN = U27100GJ1975PLC002653

Company & Directors' Information:- JINDAL COKE LIMITED [Active] CIN = U23101HR2014PLC053884

Company & Directors' Information:- INDIA COKE AND POWER PRIVATE LIMITED [Active] CIN = U23200MH2010PTC201017

Company & Directors' Information:- JINDAL (INDIA) LIMITED [Active] CIN = U51109WB1991PLC092393

Company & Directors' Information:- G L COKE PRIVATE LIMITED [Active] CIN = U24117AS1998PTC005621

Company & Directors' Information:- U D COKE PRIVATE LIMITED [Active] CIN = U23101ML2005PTC007807

Company & Directors' Information:- S. G. POWER AND STEEL PRIVATE LIMITED [Active] CIN = U14290DL2012PTC240718

Company & Directors' Information:- R. S. STEEL AND POWER PRIVATE LIMITED [Active] CIN = U70100CT2009PTC021362

Company & Directors' Information:- B R JINDAL (INDIA) PRIVATE LIMITED [Active] CIN = U27100MH1973PTC016358

Company & Directors' Information:- GUJARAT NRE POWER LTD [Active] CIN = U40101WB1995PLC068095

Company & Directors' Information:- G. A. COKE PRIVATE LIMITED [Active] CIN = U74999WB2011PTC166326

Company & Directors' Information:- I C COKE PRIVATE LIMITED [Strike Off] CIN = U23101AS2004PTC007321

Company & Directors' Information:- JINDAL AND JINDAL PRIVATE LIMITED [Strike Off] CIN = U31200UR1975PTC004130

Company & Directors' Information:- JINDAL (INDIA) LIMITED [Strike Off] CIN = U74900DL1968PLC004852

    G.A. No. 3945 of 2014 & C.S. No. 227 of 2014

    Decided On, 03 December 2015

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE SOUMEN SEN

    For the Plaintiff: Jishnu Saha, Sr. Advocate, Arpita Saha, Moti Sagar Tiwari, Advocates. For the Defendant: Sudipto Sarkar, Sr. Advocate, Ratnanko Banerjee, Sr. Advocate, Mousumi Bhattacharya, Nandani Khaitan, Anunoy Basu, Advocates.



Judgment Text

Soumen Sen, J.

1. This is an application at the instance of the defendant No.3 for revocation of leave under Clause 12 of the Letters Patent.

2. The plaintiffs have filed a suit against the defendants in the suit no relief is claimed against the defendant No.3. In Paragraph 49 of the Plaint, the plaintiff says that the plaintiff No.1 is entitled to USD 95,836,701.50 equivalent to Rs.5,77,41,61,265.38 against the defendant Nos.2 and 3 for guarantee commission and quality claim. However, the plaintiff No.1 reserved all its rights in this regard presumably because of the existence of a jurisdictional clause in the agreement entered into between the plaintiffs and the applicant dated 4th November, 2007.

3. The plaintiff and the applicant (formerly known as Gujarat FCGL) have entered into a Purchase Agreement dated 4th November, 2007 by and under which the defendant No.3 agreed to sell and load the product at the loading port for delivery to the plaintiff No.1. The applicant says that the agreement was signed by the defendant No.3 at Australia and the contract was concluded at Australia. The applicant says that the agreement entered into between the plaintiff No.1 and the defendant No.3 specifically provides that the said contract shall be governed by the New South Wales Australia and the Commonwealth of Australia and the plaintiff No. 1 and the defendant No.3 shall submit to the exclusive jurisdiction of the Courts of New South Wales and Australia to settle their disputes.

4. The applicant further says that the plaintiff alleged that the Jindal group, mainly Jindal Steel & Power (Mauritius) Ltd. and Jindal Steel & Power (Australia) Pty Ltd. acquired the major stake in defendant No.3/applicant, which are separate legal entities and are not arrayed as parties. Thereafter, it is alleged that they took over the management and control of defendant No.3/applicant and started interfering in the management of defendant No.3/applicant, which was earlier a subsidiary of plaintiff No.1. It also alleged that after taking over the management of defendant No.3/applicant, the defendant No.3/applicant stopped payment of the freight charges to the shipping company and thus, prevented the supply of coal to the plaintiff No.1 under the Purchase Agreement and hence, the present suit. This dispute cannot be decided by this forum as this Hon'ble Court by reason of Clause 21 of the Agreement does not have the territorial jurisdiction to try and determine the suit.

5. The plaintiffs made the following averments for invoking the jurisdictional clause of this Court under Clause 12 of the Letters Patent:-

"50. The plaintiff's cause of action in the suit against the defendants arose for the first time on 16th October, 2013 when the management and control of defendant No.4 was taken over by Jindal Group and the defendant Nos.2 and 3 at the instance of the defendant No.1 stopped supply of NRE Australian hard coking coal to the plaintiff No.1 in breach of their obligations under the purchase agreements dated 11th May, 2007 and 4th November, 2007 respectively. As such no part or portion of the plaintiffs' claims in the same is barred by limitation.

51. As has been stated herein above, both the purchase agreements and the coal purchase agreement were entered into at the registered office of the plaintiff no.1 within the jurisdiction of this Hon'ble Court. The breach of the purchase agreements was, however, procured by the defendant no.1 and/or its subsidiaries at Australia as also at various places in India including at the registered office of the plaintiff no.1 both outside and within the aforesaid jurisdiction. Similarly, the defendant no.1 prevented the performance of the coal purchase agreement by the plaintiff no.1 at the registered office of the said plaintiff within the aforesaid jurisdiction as also at the plants of the plaintiff no.1 outside the aforesaid jurisdiction. The correspondence exchanged in this regard were all addressed by the plaintiff no.1 from its registered office within the aforesaid jurisdiction to the defendant no.1 outside the aforesaid jurisdiction and were in turn addressed by the defendant no.1 from outside the aforesaid jurisdiction to the plaintiff no.1 within the aforesaid jurisdiction. A part of the plaintiffs' cause of action as stated in paragraphs 1 to 37, 8, 28, 30, 44, 51 herein above have as such arisen within and a part thereof as stated in paragraphs 4, 37, 41, 44, 51 herein above have arisen outside the aforesaid jurisdiction. The plaintiffs are accordingly entitled to and pray for leave under Clause 12 of the Letters Patent to institute the instant suit in this Hon'ble Court.

52. The plaintiffs' right to relief against the defendants arise out of the same series of acts or transactions and if separate suits are brought against them, common questions of law or fact would arise."

6. I have considered the Purchase Agreement. Clause 21 of the Purchase Agreement lays down the governing law and is the jurisdiction clause. The said clause reads:-

"21. GOVERNING LAW

21.1. Governing Law

This Agreement shall be governed by the laws current in the State of New South Wales Australia and the Commonwealth of Australia and the parties submit to the exclusive jurisdiction of the Courts of New South Wales and Australia and only Courts that hear appears therefrom.

21.2. Convention on the International Sale of Goods Subject to clause 16, questions concerning the formation of this Agreement and the rights and obligations of Gujarat FCGL and GNCL that are not settled by the terms stated in this Agreement shall be settled in conformity with those provisions of the United Nations Convention on Contracts for the International Sale of Goods that do not conflict with the terms stated in this Agreement."

7. There is no dispute that the applicant is a company incorporated under the appropriate laws of Australia, having its registered office at Jersey Farm Road, Wongawilli Road, West Dapto, NSW 2530, Australia and the applicant is carrying on its business from the registered office. The execution of the office is also not in dispute. The said agreement provides for exclusive jurisdiction of the Australian Court. When the parties with their eyes wide open have entered into an agreement by which the parties have agreed to settle their dispute in a manner indicated in the agreement, the concept of natural forum pales into insignificance and is substituted by the "Court of choice of parties" and the forum mentioned in the agreement becomes the natural forum.

8. It is further submitted that even otherwise, the Purchase Agreement was signed and executed by/on behalf defendant No.3/ applicant in Australia and also the defendant No.3/applicant is having registered office in Australia. The ROM Coal was to be supplied from the mines in Australia and the payments for supply of ROM Coal were made by the plaintiff No.1 to the defendant No.3 in Australia.

9. This, of course, however, does not mean that by agreement between the parties, a Court cannot be conferred with the jurisdiction if it otherwise inherently lacks the jurisdiction. In the instant case, it cannot be said that the Court at Australia would have the jurisdiction since one of the parties is having its office at Australia and the part-performance of the contract has happened at Australia. It is well-settled that for a breach of contract a suit can be filed either at the place where the contract was concluded or performed or breach had taken place. In the instant case, although the plaintiff claims that the contract was concluded at Calcutta even then having regard to the jurisdictional clause and the contract involves supply of coal from Australia to the plaintiff, the breach as alleged has had occurred outside.

10. The law with regard to the ouster of jurisdiction is well-settled. In ABC Laminart (P) Ltd. v. A.P. Agencies reported at 1989 (2) SCC 163 the Hon'ble Supreme Court held that where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as being against public policy. If on the other hand the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared void being against public policy. It was further held that even when words like 'alone', 'only', 'exclusive' and the like have been used in the contract if the Court is of the view that the parties intended to have their dispute resolved by a particular court or forum, the Court shall refer the dispute to have particular court and may refuse to exercise its jurisdiction to decide the dispute. This view has been recently followed and clarified in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. reported at 2013 (9) SCC 32. The parties with their eyes wide open had agreed to submit their dispute to a Court which otherwise would have jurisdiction to decide the lis between the parties.

11. In Swastik Gases (supra), the Hon'ble Supreme Court has considered both A.B.C. Laminart (supra) and Inter Globe Aviation (supra) in Paragraphs 13, 14. The said Paragraphs are reproduced below:-

"13. In A.B.C. Laminart, this Court was concerned with Clause 11 in the agreement which read, "any dispute arising out of this sale shall be subject to Kaira jurisdiction". The disputes having arisen out of the contract between the parties, the respondents therein filed a suit for recovery of amount against the appellants therein and also claimed damages in the Court of the Subordinate Judge at Salem. The appellants, inter alia, raised the preliminary objection that the Subordinate Judge at Salem had no jurisdiction to entertain the suit as parties by express contract had agreed to confer exclusive jurisdiction in regard to all disputes arising out of the contract on the Civil Court at Kaira. When the matter reached this Court, one of the questions for consideration was whether the Court at Salem had jurisdiction to entertain or the jurisdiction of the court in the matter of contract would depend on the situs of the contract and the cause of action arising through connecting factors. The Court referred to Sections 23 and 28 of the Contract Act, 1872 (for short "the Contract Act") and Section 20(c) of the Civil Procedure Code (for short "the Code") and also referred to Hakam Singh and in para 21 of the Report held as under:

"21. …..When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like 'alone', 'only', 'exclusive' and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim expressio unius est exclusio alterius – expression of one is the exclusion of another – may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed."

14. Then, in para 22 of the Report, this Court held as under:

"22……We have already seen that making of contract was a part of the cause of action and a suit on a contract therefore could be filed at the place where it was made. Thus, Kaira Court would even otherwise have had jurisdiction. The bobbins of metallic yarn were delivered at the address of the respondent at Salem which, therefore, would provide the connecting factor for Court at Salem to have jurisdiction. If out of the two jurisdictions one was excluded by Clause 11 it would not absolutely oust the jurisdiction of the court and, therefore, would not be void against public policy and would not violate Sections 23 and 28 of the Contract Act. The question then is whether it can be construed to have excluded the jurisdiction of the Court at Salem. In the clause 'any dispute arising out of this sale shall be subject to Kaira jurisdiction' ex facie we do not find exclusionary words like 'exclusive', 'alone', 'only' and the like. Can the maxim expressio unius est exclusio alterius be applied under the facts and circumstances of the case? The order of confirmation is of no assistance. The other general terms and conditions are also not indicative of exclusion of other jurisdictions. Under the facts and circumstances of the case we hold that while connecting factor with Kaira jurisdiction was ensured by fixing the situs of the contract within Kaira, other jurisdictions having connecting factors were not clearly, unambiguously and explicitly excluded. That being the position it could not be said that the jurisdiction of the Court at Salem which court otherwise had jurisdiction under law through connecting factor of delivery of goods thereat was expressly excluded."

12. When there is an express jurisdictional clause between the parties it is all the more necessary to find out the reason and motive behind impleading the defendant No.3 in the frame of the suit. It is necessary to find out if the said defendant No.3 was made in order to wriggle out of the jurisdictional clause in the agreement. Mr. Jishnu Saha, the learned Senior Counsel has referred to Paragraphs 44 to 49 of the Plaint and submitted that the primary object of the suit is to seek a relief against the defendant No.1 since, according to the plaintiffs, the defendant No.1 has procured a breach of the contract entered into between the plaintiffs and the defendant No.3 with regard to supply of coal by the defendant No.3 under the agreement dated 4th November, 2007. Although in the plaint it is alleged that the defendant No.3 had refused to supply the coal at the instance of the defendant No.1 but the fact remains that the defendant No.3 alleged to have failed to supply the coal under the agreement. The reason for alleged failure to supply the coal by the defendant No.3 to the plaintiffs may be for various reasons. Whatever way one may look at the plaint there cannot be any doubt that the claim against the defendant No.3 is arising out of alleged breach on the part of the defendant No.3 to supply the coal to the plaintiffs under the agreement dated November 4, 2007. The obligation to supply the coal by the defendant No.3 to the plaintiff is arising out of an agreement dated 4th November, 2007 which contains a jurisdictional clause. The Court, under such circumstance, is required to find out the primary and dominant object in juxtaposition to any other incidental or ancillary facts not forming integral part of the cause of action. This enquiry is essential in order to find out if a party has been impleaded in the suit in order to avoid the jurisdictional clause. There cannot be any cavil of doubt that the defendant No.3 is impleaded in order to avoid the jurisdictional clause. The same suit could have been filed in the

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Australian Court seeking the self-same relief since the defendant No.1 has not argued that the defendant No.1 would be inconveniences if the trial takes place at Australia. Irrespective of the fact what the defendant No.1 might feel having regard to the nature of the agreement which contains an exclusive jurisdictional clause, in my view, this suit cannot proceed against the defendant No.3 in this forum. 13. Although it is alleged that the plaintiff No.1 has procured a breach of contract between the plaintiffs and the defendant No.3 but no relief is claimed against the defendant No.3. However, it appears from Paragraph 48 of the Plaint that the plaintiffs have stated that by not making payment of freight charges to the shipping company and in failing to make any further shipments, the defendants have disturbed operation of the plaintiff No.1 and, accordingly, the plaintiff No.1 is entitled to claim damages against the defendants quantified at Rs.97,00,00,00/-. In Prayer (h), of the Plaint, however, the said claim is restricted to the defendant No.2. The plaintiffs precisely knew that in the event any such claim is made against the defendant No.3, the plaintiffs would be required to approach the appropriate Court at Australia. On similar pleadings, however, the plaintiffs have claimed a relief against the defendant No.2. 14. Under such circumstances, G.A. No.3945 of 2014 is allowed. 15. The suit filed against the defendant No.3 stands dismissed as this Court lacks territorial jurisdiction. 16. However, there shall be no order as to costs. 17. Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.
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