Dispute over arbitration jurisdiction

The Delhi High Court has dismissed the arbitration appeal of NHPC Ltd in its dispute with Hindustan Construction Company over encashment of a bank guarantee. One of the arguments was that the agreement between them was signed at Faridabad, Haryana; the project was executed in West Bengal; the registered office of NHPCL is in Faridabad; the registered office of HCCL is in Mumbai; the bank guarantees were issued in Mumbai; and no part of the cause of action arose in Delhi. It was contended that, as such, the Delhi High Court did not have jurisdiction to entertain any appeal under the Arbitration and Conciliation Act. However, the high court observed that in the agreement, the venue for arbitration was mentioned as New Delhi/Faridabad. Though one part of the dispute was pending in a Haryana civil court, that factor alone would not take away the jurisdiction of the Delhi High Court, the judgment said.