contract act jurisdiction of court

A.V.M. Sales Corporation Vs. Anuradha Chemicals Pvt. Ltd. (Decided on 17.01.2012) MANU/SC/0033/2012

Agreement to exclude jurisdiction of one Court in preference to other - Validity thereof - Whether the parties to an agreement mutually agree to exclude the jurisdiction of one Court in preference to the other, if two Courts have jurisdiction to try a suit and as to whether the same would amount to violation of the provisions of Sections 23 and 28 of the Indian Contract Act?

Held, it is now a settled principle that where there may be two or more competent Courts which can entertain a suit consequent upon a part of the cause of action having arisen there within, if the parties to the contract agreed to vest jurisdiction in one such Court to try the dispute which might arise as between themselves, the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague, it is not hit by Sections 23 and 28 of the Contract Act and cannot also be understood as parties contracting against the statute.

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