An Exclusive jurisdiction clause is a term in a contract which confers the
power to adjudicate the case to the exclusion of the other courts. There has
been an increase in the usage of such clauses in contracts. There have also been
plenty of court cases regarding this matter and one such case is the Swastik
The case of Swastik Gases (P) Ltd. v. Indian Oil Corporation Ltd
. is a case
regarding the validity of ouster clauses. It was a judgement given by a 3 judge
bench of the Supreme Court. In the present case the Indian Oil Corporation
Limited (Herein referred to as the Respondent) was engaged in the business of
manufacturing, storing, marketing and distributing petroleum products. Swastik
Gases Private Limited (Herein referred to as the Appellant) was duly appointed
to be the agent for the Respondent for marketing the products in Jaipur.
Appellant was unsuccessful in selling the stock of products and so disputes
arose between the two parties. Several attempts were made by the parties to
amicably resolve the matter however all of them failed. Eventually the
Respondent filed a case against the Appellant at the Rajasthan High Court;
however, Clause 18 of the agreement stated that The Agreement shall be subject
to jurisdiction of the courts at Kolkata.
The Rajasthan High Court dismissed
the application of the Appellants while telling them to approach the Calcutta
High Court, which was the Court that had exclusive jurisdiction on this case.
When the parties approached the Supreme Court it dismissed the appeal and held
that only the Calcutta High Court had the jurisdiction to entertain the disputes
between the parties.
The majority reasoning in the judgement was based on the maxim Expressio unius
est exclusion alterius
which means that when there is an express mention of a
thing then the others from the same class are excluded. In a concurring judgement Justice Lokur classified the exclusive jurisdiction clauses into two
- the intention of the parties can be understood by the use of terms such
as only, exclusive and alone; and
- where there is no use of words such as only, exclusive or alone. Justice Lokur stated that the present
case fell into the second category and that the very existence of the clause
should clarify the intention of the parties.
While this 2013 judgement gives us more precedent in the issue of the validity
of exclusive jurisdiction clauses, there have been previous judgements which
have given different interpretations to the same issue.
A look at Previous Judgements
In the case of A.B.C. Laminart (P) Ltd. and Another v. A.P. Agencies,
, the exclusive jurisdiction clause giving Kaira the jurisdiction was
rejected as it was not clear, unambiguous and did not explicitly exclude. Hence
the Court of Salem had the jurisdiction to hear the case.
Pursuant to the A.B.C. Laminart case there have been varied judgements in this
issue. Cases such as:
- Balaji Coke Industry Pvt. Ltd. v. M/S. MAA Bhagwati Coke
Gujarat Pvt. Ltd.,
- Shriram City Union Finance Corporation Ltd. v. Rama
- Angile Insulations v. Davy Ashmore India Ltd. and Another
held the exclusive jurisdiction clauses to be valid even without the use of
terms such as only, exclusive or alone.
Surprisingly all of these cases
have cited the A.B.C. Laminart case but no actual analysis of the reasoning has
been provided. In the Balaji Coke Industry case the exclusive jurisdiction
clause giving the place of arbitration as Calcutta was held to be valid as the
parties had knowingly and voluntarily agreed to subject all disputes to the
jurisdiction of Calcutta.
In the Angile Insulations case the exclusive
jurisdiction clause giving the Karnataka High Court exclusive jurisdiction was
considered valid as it was not void under Section 23 and Section 28 of the
Indian Contract Act, 1872.
However, in the case of R.S.D.V. Finance Co. Pvt. Ltd v. Vallabh Glass Works
. the exclusive jurisdiction clause did not contain words such as only, exclusive or alone. The Supreme Court rendered the use of the maxim expression unius est exclusion alterius in such circumstances inapplicable.
This case followed the A.B.C. Laminart judgement and held the clause not to be
Also, in the case of M/S Hanil Era Textiles Ltd. v. M/S Puromatic Filters (P)
. the exclusive jurisdiction clause giving the Bombay High Court exclusive
jurisdiction was held to be valid. This decision was arrived at using Section
20(c) of the Code of Civil Procedure, 1908 (Herein referred to as the Code).
Section 20(c) of the Code states that all the courts where the cause of action
wholly or partly arise have jurisdiction to try the case. As in this case a
major part of the deal occurred in Bombay and there was a clear intention to
exclude the others and confine the jurisdiction of the case to the courts in
In the case of New Moga Transport Co. v. United India Insurance Co. Ltd. and
, the Supreme Court held that terms such as only, exclusive or alone is required to be present with reference to a particular court to gather
the unambiguous, explicit and specific meaning of the parties. Hence, with
respect to the New Moga Transport case, the present case is in contradiction to
the principle laid down by the Supreme Court in the former case.
However in the case of Patel Roadways Limited, Bombay v. Prasasd Trading
, the Supreme Court held that a case can be filed at the place where
the principal office is located or at the place where the business carried on
gave rise to the cause of action as long as a subordination of the corporation
is situated in that place. The present case has given a ruling which is opposite
to this case.
It is important to notice that none of the agreements made in any of the cases
had terms such as only, exclusive and alone
; however, the Supreme Court
has given differing opinions in these cases. The A.B.C. Laminart case started
the use of the maxim expression unius est exclusion alterius
but no guideline
for its usage was given.
The Hanila Era case
used the aforesaid maxim as well as
Section 20(c) of the Code. Section 20(c) reads as:
Subject to the limitations aforesaid, every suit shall be instituted in a Court
within the local limits of whose jurisdiction - (c) the cause of action, whole
or in part arises.
provision does not specify any preference depending upon the proportionality of
the cause of action. This provision has been used by several Courts to decide
the jurisdiction of issues.
In the present case the Chief Justice or any qualified Judge of the Rajasthan
High Court would have had the jurisdiction to hear this case under Section 20(c)
of the Code. However, the parties could have agreed to give exclusive
jurisdiction to the courts in Calcutta by virtue of Clause 18 of the agreement.
Paragraph number 12 of the present case shows that the Respondent did not deny
the fact that all the steps, apart from the execution of the agreement which
took place at Calcutta, had taken place at Jaipur. Using the principle given in
the Hanil Era case the Rajasthan High Court would have had jurisdiction to hear
the present case.
The present case has mentioned the A.B.C. Laminart case
, the Hanil Era
case and the New Moga Transport case; however, no reasoning has been given as to
why the principle laid down in these cases should not be applied. Furthermore,
the principle laid down in the Patel Roadways case has not even been mentioned.
As of now various Courts have been using the Swastik Gases case
adjudging on the issue related to exclusive jurisdiction clauses. However
there have been cases that have used past judgements given in the Patel Roadways
case or the Hanil Era case.
 Various judgements have also been using
Section 20(c) of the Civil Procedure Code.
Just like all of the previous cases the present case does not lay down a certain
set of guidelines to apply the maxim expression unius est exclusion alterius
Since the principle laid down in the A.B.C. Laminart case
good, terms such as only
required to be used in jurisdiction clauses. This would also help to avoid any
confusion in the further cases. However it is up to a larger bench of the
Supreme Court to take a final decision and hopefully come up with one answer
rather than letting the Courts apply any of the principles that have been laid
down in the numerous cases.
Written By: Harsh Mahaseth
- Swastik Gases (P) Ltd. v. Indian Oil Corporation Ltd., 2013 (SCC) Online
- A.B.C. Laminart (P) Ltd. and Another v. A.P. Agencies, Salem, AIR 1989
- Balaji Coke Industry Pvt. Ltd. v. M/S. MAA Bhagwati Coke Gujarat Pvt.
Ltd., (2009) 9 SCC 403.
- Shriram City Union Finance Corporation Ltd. v. Rama Mishra, (2002) 9 SCC
- Angile Insulations v. Davy Ashmore India Ltd. and Another, 1995 (3) SCR
- R.S.D.V. Finance Co. Pvt. Ltd v. Vallabh Glass Works Ltd., 1993 SCR (1)
- M/S Hanil Era Textiles Ltd. v. M/S Puromatic Filters (P) Ltd., (2001) 1
- New Moga Transport Co. v. United India Insurance Co. Ltd. and Others,
(2004) 4 SCC 677.
- Patel Roadways Limited, Bombay v. Prasasd Trading Company, 1991 SCR (3)
- Laxman Prasad v. Prodigy Electronics Ltd. and Another, (2008) 1 SCC
618; Gujarat Insecticides Limited v. Jainsons Minerals & Another, 2008 SCC
Online Del 1079; Srodeep Polymers Ltd. v. SCJ Master Batches, 2011 SCC
Online Del 1843.
- B.E Simoese Von Staraburg Niedenthal and Another v. Chhattisgarh
Investment Ltd., (2015) 12 SCC 225; Excel Dealcomm (P) Ltd. v. Asset
Reconstruction Co. (India) and Others, (2015) 8 SCC 219; Bhandari Udyog
Limited v. Industrial Facilitation Council and Another, (2015) 14 SCC 515; Mukesh
Aghi v. Steria Ltd. & Ors., 2016 SCC Online Del 1482; Futecht Project
(India) Pvt. Ltd. v. Abott Healthcare Pvt. Ltd. & Anr., 2016 SCC Online Del
- Videocon Industries Ltd. Chitegaon v. Rajesh Kumar Kedia, 2013 SCC
Online Bom 271; Indian Performing Rights Society Limited v. Sanjay Dalia and
Another, (2015) 10 SCC 161.
- Supra 10.
is an Assistant Lecturer at Jindal Global Law School, and a Research Analyst at the Center for Southeast Asian Studies, Jindal School of International Affairs, O.P. Jindal Global University.