Mrg Auto Private Limited & Ors vs Encore Assets Reconstruction Co. Pvt. … on 10 July, 2026

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    Delhi High Court – Orders

    Mrg Auto Private Limited & Ors vs Encore Assets Reconstruction Co. Pvt. … on 10 July, 2026

    Author: Subramonium Prasad

    Bench: Subramonium Prasad

                              $~69
                              *         IN THE HIGH COURT OF DELHI AT NEW DELHI
                              +         O.M.P. (COMM) 229/2026, I.A. 12618/2026, I.A. 12619/2026, I.A.
                                        12621/2026
                                        MRG AUTO PRIVATE LIMITED & ORS.                                                 .....Petitioner
                                                                      Through:            Mr.Gautam Narayan Sr Adv. Mr
                                                                                          Tarun Rana . Ms Ashmita Singh, Mr
                                                                                          sunny pandey . Mr Shivam Dedha.
                                                                                          Mr Mayur Rexwal, Advs.
    
                                                                      versus
    
                                        ENCORE ASSETS RECONSTRUCTION CO. PVT. LTD.
                                                                           .....Respondents
                                                     Through:
    
                                        CORAM:
                                        HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
                                                                      ORDER
    

    % 10.07.2026

    1. The present petition under Section 34 of the Arbitration &
    Conciliation Act has been filed by the Petitioner challenging the Award
    dated 21.12.2018, passed by the learned Sole Arbitrator, Shri O.P. Gupta.

    SPONSORED

    2. Facts of the present case are not relevant at this juncture.

    3. It is stated that the Petitioners challenged the jurisdiction and
    impartiality of the learned Arbitrator by filing applications under Sections
    16
    and 13(2) of the Arbitration and Conciliation Act, 1996, which came to
    be dismissed. It is stated that during the pendency of the arbitral
    proceedings, the Respondent, Encore Assets Reconstruction Company Pvt.
    Ltd., was substituted in place of the original claimant, India Infoline Finance

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    Limited. Thereafter, separate arbitral proceedings in respect of the loan
    agreement culminated in two arbitral awards, both dated 21.12.2018. By the
    impugned award, which is the subject matter of the present Petition, the
    learned Sole Arbitrator directed the Petitioners to jointly and severally pay a
    sum of Rs.10,28,94,992.44, along with interest at the rate of 13.85% per
    annum from 17.05.2016, besides other consequential directions.

    4. It is stated that aggrieved by the two Awards, the Petitioners instituted
    two separate Petitions under Section 34 of the Arbitration and Conciliation
    Act, 1996. The award arising out of the Loan Agreement containing the
    Ludhiana jurisdiction clause was challenged before the learned District
    Judge, Ludhiana, as Arb. Petition No. 108 of 2019, whereas the award
    arising out of the loan agreement containing the Mumbai jurisdiction clause
    was challenged before the Hon’ble High Court of Judicature at Bombay as
    Commercial Arbitration Petition No. 679 of 2019.

    5. It is stated that during the pendency of Arb. Petition No. 108 of 2019,
    the Respondent objected to the territorial jurisdiction of the Ludhiana Court
    on the ground that the arbitral award had been rendered in Delhi and,
    therefore, the competent Court at Delhi would have the jurisdiction to
    entertain a Petition under Section 34 of the Arbitration Act. It is stated that
    accepting the said objection, the learned District Judge, Ludhiana, by order
    dated 11.04.2025, returned the petition for presentation before the competent
    court at Delhi. It is stated that the petition was thereafter re-presented before
    the learned District Judge (Commercial), New Delhi, where it was registered
    as OMP (COMM.) No. 113 of 2025 is stated to be pending adjudication.

    6. It is stated that in Commercial Arbitration Petition No. 679 of 2019,
    which was pending before the Hon’ble Bombay High Court, the Petitioners

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    sought permission to withdraw the said Petition and file the same before the
    competent Court at Delhi and vide dated 23.09.2025, the Hon’ble Bombay
    High Court granted such liberty, observing that since the arbitration
    proceedings had been conducted in Delhi and the award had been rendered
    in Delhi, the appropriate forum was the Courts at Delhi. The present petition
    has accordingly been filed.

    7. Clause 28.2 of the Loan Agreement dated 20.07.2011, which is the
    jurisdiction clause, is reproduced and the same reads as under:

    “28.2 The parties hereto unconditionally submit to the
    exclusive jurisdiction of the courts in Mumbai alone for
    the determination of any matters arising out of or
    under this Agreement.”

    8. Learned Senior Counsel appearing for the Petitioner places reliance
    on the Judgment dated 13.10.2025, passed by a co-ordinate Bench of this
    Court in ARB.P. 237/2025, titled as M/s Massive Restaurants Private
    Limited v. M/s Pacific Hospitality, wherein this Court has held as under:

    “17. Coming to the objection with respect to lack of
    territorial jurisdiction of this Court, it would be
    pertinent to first refer to Clauses 15 and 16 of the
    Franchise Agreement, which are extracted hereunder
    for ease of reference:-

    “15. GOVERNING LAW AND JURISDICTION:

    15.1 This Agreement shall be governed by, and
    construed in accordance with the laws of India.
    Subject to the dispute resolution Clause 16
    (Dispute Resolution) set out below, the courts at
    New Delhi shall have exclusive jurisdiction in
    relation to all matters arising out of this
    Agreement.

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    16. DISPUTE RESOLUTION

    16.1 Any dispute arising out of or in connection
    with this Agreement which is not resolved within
    30 (thirty) days after the service of a notice by a
    Party on the other, including any question
    regarding its existence, validity or termination,
    shall be referred to and finally resolved through
    arbitration under the “fast track procedure” of
    arbitration prescribed by Section 29B(3) of the
    Arbitration and Conciliation Act, 1996, read with
    Section 29A and other applicable provisions
    thereof. The venue of arbitration shall be New
    Delhi and the language of arbitration shall be
    English. The arbitral award shall be final and
    binding on the Parties. The Parties agree that the
    present arbitration agreement has been
    constituted, and the Parties hereby intend to be
    bound by the arbitration agreement so
    constituted, in compliance with Section 29B(1) of
    the Arbitration and Conciliation Act, 1996, and
    undertake to enter into such further agreements as
    may be required to give effect to the provisions
    hereof.”

    18. Clause 16.1 is the arbitration clause wherein
    parties have agreed to designate Delhi as the venue of
    arbitration. There is no contrary indicia in the entire
    agreement and in fact even the general jurisdiction
    clause 15.1 fortifies the intent of the parties to confer
    exclusive jurisdiction on Courts at Delhi in relation to
    all matters arising out of the agreement. In BGS SGS
    Soma JV v. NHPC Limited
    , (2020) 4 SCC 234, the
    Supreme Court held that whenever there is designation
    of place of arbitration in an arbitration clause as being
    the venue of arbitration proceedings, the expression
    „arbitration proceedings‟ would make it clear that

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    venue is really the seat of arbitral proceedings there
    being no contrary indicia. Relevant paragraphs are as
    follows:-

    “81. Most recently, in Brahmani River Pellets,
    this Court in a domestic arbitration considered
    Clause 18 — which was the arbitration agreement
    between the parties — and which stated that
    arbitration shall be under Indian Arbitration and
    Conciliation Act, 1996
    , and the venue of
    arbitration shall be Bhubaneswar. After citing
    several judgments of this Court and then referring
    to Indus Mobile Distribution, the Court held :

    (Brahmani River Pellets case, SCC pp. 472-73,
    paras 18-19)

    “18. Where the contract specifies the
    jurisdiction of the court at a particular place,
    only such court will have the jurisdiction to
    deal with the matter and parties intended to
    exclude all other courts. In the present case, the
    parties have agreed that the “venue” of
    arbitration shall be at Bhubaneswar.

    Considering the agreement of the parties
    having Bhubaneswar as the venue of
    arbitration, the intention of the parties is to
    exclude all other courts. As held in Swastik,
    non-use of words like “exclusive jurisdiction”,
    “only”, “exclusive”, “alone” is not decisive
    and does not make any material difference. 19.

    When the parties have agreed to the have the
    “venue” of arbitration at Bhubaneshwar, the
    Madras High Court erred in assuming the
    jurisdiction under Section 11(6) of the Act.

    Since only the Orissa High Court will have the
    jurisdiction to entertain the petition filed under
    Section 11(6) of the Act, the impugned order is
    liable to be set aside.”

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    82. On a conspectus of the aforesaid judgments, it
    may be concluded that whenever there is the
    designation of a place of arbitration in an
    arbitration clause as being the “venue” of the
    arbitration proceedings, the expression
    “arbitration proceedings” would make it clear
    that the “venue” is really the “seat” of the
    arbitral proceedings, as the aforesaid expression
    does not include just one or more individual or
    particular hearing, but the arbitration
    proceedings as a whole, including the making of
    an award at that place. This language has to be
    contrasted with language such as “tribunals are
    to meet or have witnesses, experts or the parties”

    where only hearings are to take place in the
    “venue”, which may lead to the conclusion, other
    things being equal, that the venue so stated is not
    the “seat” of arbitral proceedings, but only a
    convenient place of meeting. Further, the fact that
    the arbitral proceedings “shall be held” at a
    particular venue would also indicate that the
    parties intended to anchor arbitral proceedings to
    a particular place, signifying thereby, that that
    place is the seat of the arbitral proceedings. This,
    coupled with there being no other significant
    contrary indicia that the stated venue is merely a
    “venue” and not the “seat” of the arbitral
    proceedings, would then conclusively show that
    such a clause designates a “seat” of the arbitral
    proceedings. In an international context, if a
    supranational body of rules is to govern the
    arbitration, this would further be an indicia that
    “the venue”, so stated, would be the seat of the
    arbitral proceedings. In a national context, this
    would be replaced by the Arbitration Act, 1996 as
    applying to the “stated venue”, which then
    becomes the “seat” for the purposes of

    This is a digitally signed order.

    The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
    The Order is downloaded from the DHC Server on 14/07/2026 at 21:07:51
    arbitration.””

    9. He states that the jurisdiction clause contained in the present case is a
    generic dispute resolution clause. He states that since the Arbitration took
    place in Delhi, this Court has the jurisdiction to entertain the present
    Petition. It is stated by the learned Senior Counsel appearing for the
    Petitioner that the Petitioner is being shunted from Court to Court.

    10. Issue Notice.

    11. On Petitioner’s taking steps, let notice be issued to the Respondents
    through all permissible modes, including Dasti.

    12. The question as to whether this Court has the territorial jurisdiction to
    entertain the present Petition or not is kept open.

    13. List on 14.08.2026.

    SUBRAMONIUM PRASAD, J
    JULY 10, 2026
    Rahul

    This is a digitally signed order.

    The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
    The Order is downloaded from the DHC Server on 14/07/2026 at 21:07:51



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