Delhi High Court Metal Forgings Pvt. Ltd., New Delhi vs Centrala Handlu Zaranizznego, Poland on 11 January, 1979 Equivalent citations: AIR1979DELHI167, AIR 1979 DELHI 167, 1979 RAJLR 278 JUDGMENT 1. This petition, under S. 20 of the Arbitration Act. was filed by Messrs Metal Forgings Private Limited, New Delhi, against Messrs Centralia Handlu Zaranizznego, Poland. It was alleged by the petitioner that the parties entered into five contracts for supply of forgings to the respondent, worth Rs. 9,94,750; Rs. 25,75,000; Rs. 27,60,009; Rs. 5,72,800 and Rs. 13,27,910 respectively. It was provided by the five separate agreements that the respondent would furnish to the petitioner drawings of the components and the petitioner would thereon submit samples for the approval of the other party and on obtaining the said approval the goods in question would be fabricated. Ten per cent of the price of the goods, amounting to Rs. 8,23,044, was paid to the petitioner in advance and letters of credit were opened in its favor in respect of four contracts. According to the petitioner there was delay on the part of the respondent in sending the drawings, approving the samples, etc. and in consequence the contracts could not be performed within the contemplated time. Prices of the necessary materials, like steel, furnace oil, went up considerably in the meantime, and that resulted in a loss of about Rs. 25 lacs to the petitioner. Because the respondent rescinded the contracts unreasonably, the petitioner was also deprived of profits to the tune of Rs. 28 lacs. According to the petitioner goods worth Rs. 6,77,753.40 had already been supplied to the respondent and after calculations sum of Rs. 48 lacs was claimed to be to it. 2. The agreements provided that any disputes arising between the parties in relation to the aforesaid contracts would be got settled through arbitration. The present petition was, therefore, made with a prayer that the agreements containing the arbitration clause in question in possession of the respondent be got filed and the disputes between the parties referred to arbitration. 3. As per the averments in the petition, the cause of action for filing the petition arose at Delhi where the contracts were accepted, wherefrom the goods were to be dispatched where the remittances were to be made where the respondent committed breach of the contract and put pressure on the petitioner through the Punjab National Bank to force litigation. 4. The respondent opposed the application and raised, inter alia, a preliminary objection as to the jurisdiction of this Court. It was contended that according to the arbitration clause, in case the Polish party is sued the arbitration shall take place in Poland at the Arbitration Court of the Polish Chamber of Foreign Trade in Warszawa or, in application of the rules of the said Arbitration Court, in another town in Poland always in accordance with the rules of the said Court, the competence of ordinary Courts of the countries of both the parties, being excluded. 5. In view of the pleadings of the parties, the following issues have been framed: "1. Whether this Court has jurisdiction to entertain this petition? 2. Relief. " 6. The parties are agreed that the decision of the crucial issue framed in the case would depend upon the agreement between them. It is provided by the said agreement as follows: "In case the Polish party is sued the arbitration shall take place in Poland at the Arbitration Court of the Polish Chamber of Foreign Trade in Warszawa or in application of the Rules of the said Arbitration Court in another town in Poland always in accordance with the said Court. In case the Indian party to the contract is sued, the arbitration shall take place at the Tribunal of Arbitration of the Federation of Indian Chambers of Commerce & Industry in New Delhi or upon application by both the parties in Bombay. Calcutta or Madras in India in accordance with the Rules of the Tribunal of Arbitration of the Federation of Indian Chambers of Commerce & Industry". 7. Now the alleged grievance being on the side of Messrs. Metal Forgings Private Limited, the Indian party, it could but for the peculiar arbitration clause in the present case file a suit at Delhi because a part of the cause of action did admittedly arise here and the suit could also be instituted in Poland because of the defendant carrying on business in that country. It is well established that where a suit can be instituted in either of two courts due to cause of action arising partly at the two places or cause of action arising at one place and the, defendant residing or carrying on business at the other, the parties can agree between themselves that the disputes arising between them would be tried at one of the said courts only. That was what the parties did in the present case. It was agreed that it the suit was to be instituted against the Polish party the p