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.
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 ofThis is a digitally signed order.
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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
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