BA.

LLB

2 SEMESTER

KHUSHI SHARMA
DIV. A
A024

AGREEMENT IN RESTRAINT OF LEGAL PROCEEDINGS

PROF. SHOVONITA ACHARJEE

KPMSOL. NMIMS. MUMBAI
SR.NO. CONTENTS PAGE NO.

1. ABSTRACT 3-4

2. INTRODUCTION 5-6

3. RESEARCH 7- 27

4. CONCLUSION 29

5. BIBLIOGRAPHY 30
 ABSTRACT

According to English law, "an agreement professing to remove the jurisdiction of the courts is
unconstitutional and invalid on the grounds of public policy." "As a result, any condition in an
agreement stating that neither party shall have the ability to enforce the agreement through
legal action is null and invalid." An agreement, on the other hand, may state that there is no
desire to combine or that it is only a gentleman's agreement. In such a circumstance, no action
is required. within the terms of the agreement.

Section 28 of the Indian Contract Act declares void two types of agreements: (1) an agreement
in which a party is expressly prohibited from enforcing the terms of the agreement; and (2) an
agreement in which a party is expressly prohibited from enforcing the terms of the agreement
his legal rights stemming from a contract, via the normal legal processes in the usual courts (2)
A contract that specifies the time frame for exercising contract rights—may be imposed.

S. 28. Agreements in restraint of legal proceedings are void.—[Every agreement,— [a] by

which any party to that is restricted absolutely from enforcing his rights under or in respect of
any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time
within which he may thus enforce his rights; or (b) which extinguishes the rights of any party
thereto, or discharges any party thereto from any liability, under or in respect of any contract
on the expiry of a specified period to restrict any party from enforcing his rights, is void to that
extent.]

Exception 1.— Saving of contract to refer to an arbitration dispute.—This section shall not
render illegal a contract by which two or more persons agree that any dispute which may arise
between them in respect of any subject or class of subjects shall be referred to Arbitration and
that only the amount awarded in such Arbitration shall be recoverable in respectof the dispute
so referred.

Exception 2.—Saving of contract refers to questions that have already arisen.—Nor shall this
section render illegal any contract in writing, by which two or more persons agree to refer to
Arbitration any question between them which has already arisen, or affect any provision of any
law in force for the time being as to references to Arbitration.

[Exception 3.—Saving of a guarantee agreement of a bank or a financial institution.—This

section shall not render illegal a contract in writing by which any bank or financial institution
stipulates a term in a guarantee or any agreement making a provision for the guarantee for
extinguishment of the rights or discharge of any party to that from any liability under or in
respect of such guarantee or agreement on the expiry of a specified period which is not less
than one year from the date of occurring or non-occurring of a specified event for
 extinguishment or discharge of such party from the said liability.

Keywords: Section 28, contract, agreements, rights, arbitration, institution

 INTRODUCTION

An agreement is unlawful if it completely prohibits a party from asserting his contractual

rights through conventional court processes or if it limits the period within which he may
enforce his rights. It saves three categories of contracts: (a) those with the condition that an
arbitration award must precede a cause of action, (b) a contract to send existing conflicts to
Arbitration, and (c) those establishing a period of guarantee by a banking or financial
institution.
Restraint of Legal Proceedings

By contract, no one may exempt himself from the protection of the courts. The citizen has the
right to have his legal position determined by ordinary tribunals, except (a) when there is an
arbitration clause that is valid and binding under the law; and (b) when the parties to a
contract agree on the Jurisdiction to which any dispute arising from the contract shall be
discharged. The part upholds Common Law. Its clauses "appear to express a basic norm
recognized in the English Courts that bans any agreements seeking to eliminate the Courts'
jurisdiction."

Absolute Restriction

Where the restriction is not absolute, this clause does not apply. Excluding one of two
competent jurisdictions by agreement does not amount to total exclusion abolition of
Jurisdiction, and such a provision does not contravene section 28. There is none. In India,
there is no recourse to a jury trial, hence an agreement requiring arbitration. This is not
violated by providing that parties will not be entitled to a jury trial. Section.

Agreements Restraining Enforcement of Rights

A servant's agreement not to sue for wrongful discharge is unenforceable and a condition that
prevents a transferee from using his transfer rights in any way. Under this clause, a separate
agreement between a barrister-advocate and his client that the latter wouldnot be sued for fees
is null and invalid. An undertaking provided by the landlord to the Bank that he would not
evict the tenant until the tenant returned the total loan acquired from the Bank was found to
be in breach of section 28 since it prevented the landlord from beginning eviction
proceedings. Despite being recognized by SEBI, Stock Exchange bye-laws are solelyin the
domain of a contract. Hence, any limitation in the bye-laws establishing a time limit for
beginning Arbitration would contradict this clause. If the Despite having already accepted a
new job offer, the petitioner wanted a job continuity. appointment on the conditionthat the
writ petition opposing the termination be withdrawn, It was determined that acceptingan
earlier offer of a new post was not a bar. to seek job continuity as the agreement for a new
appointment on condition It was a violation of section 28 to withdraw the writ petition. An
agreement that quantifying liquidated damages would be definitive and unchallengeable was
unlawful and in restraint of proceedings. A club's bylaws allowed its committee to take action
against any members who went to court to protest the election process. In a complaint about
the declaration of nullity of this regulation, the Court ruled (on the surface) that such a
restriction breached section 28 and was contrary to public interest since no one should be
barred from seeking relief for a justiciable reason. A clause providing for an in-house conflict
resolution system that was not analogous to Arbitration cannot be considered to directly or
implicitly restrict the Civil Court's Jurisdiction under Section 9 of the Code of Civil
Procedure Code.
 Agreement not to Appeal

A legal and enforceable agreement exists when the parties to a dispute agree before judgment
is rendered in the Court of the first instance to abide by the decree of that Court and waive
their right of Appeal. An agreement in which the parties agreed to a method to be followed in
a court deciding the issue on merits and consenting to the decision being binding on them was
equivalent to ensuring that no right of Appeal would be exercised. Additionally, an
arrangement in which a judgment debtor agrees not to appeal in exchange for the judgment
creditor granting him time to satisfy the judgment debt is not forbidden by this section. The
appellant ultimately did not limit himself from asserting a claim under or in respect of any
contract by agreeing not to appeal. The indulgence provided by the respondents was
reasonable compensation. He waived his right to challenge the decision of an ordinary
tribunal in an appeal. "In our opinion, neither the wording nor the spirit of the Contract Act
precludes such an arrangement, and an Appellate Court is obligated by the norms of justice,
equity, and good conscience to give effect to it and refuse to allow the party bound by it to
proceed with the appeal."

Rights under or in respect of any Contract

This clause only applies where a party is barred from asserting his rights under or about a
contract. This provision does not apply when the litigation is for a tortious action rather than
to enforce a contractual right. It is not applicable in circumstances of wrongdoing or tort. It
also does not apply to decrees; the term "contract" does not cover decree rights.

The CPC expressly provides for the modification of a decree and the postponing of rights
under an order by mutual agreement of the parties to litigation (O. 21, rule 2). However, an
agreement by a joint decree-holder not to intervene in execution under CPC O 21, rule 15, is
null and void. The section does not affect the legality of compromises of questionable rights.
This viewpoint is reinforced by CPC provisions that allow parties to a suit to go before the
Court and obtain a decision in terms of a compromise. This clause also does not exclude
agreements to resort to Arbitration without a court order in ongoing action.

By the usual Legal Proceedings in Ordinary Tribunals

An agreement between the parties to a contract suit that the action shall be settled in line with
the outcome of another litigation between the same parties is unlawful because it prohibits
 the parties from asserting their rights through "normal legal processes."
The phrase "normal legal processes in regular tribunals" refers to Indian proceedings. As a
result, any arrangement in which parties do not have "recourse to Indian Courts" is null and
invalid, and it is no response that an aggrieved party may bring actions in a foreign court under
the agreement. A provision limiting Jurisdiction to courts in Delhi would not nullify the
Jurisdiction of the Permanent Lok Adalat in Hyderabad, because the latter is not a court and its
primary function is conciliation.

Agreements Prescribing Jurisdiction

Parties cannot confer authority on a court that it does not have by private agreement, nor can
they deprive a court of Jurisdiction that it has under ordinary law. A provision is unlawful if
itdenies all courts of Jurisdiction and confers Jurisdiction on a court that does not otherwise
have Jurisdiction. The idea that parties cannot grant or deprive a court of jurisdiction by
consent has been argued to apply to situations of a court's inherent jurisdiction over the
subject matter of the complaint, and the question of geographical Jurisdiction as not being a
question of intrinsic Jurisdiction. Where two courts have Jurisdiction to handle an issue, an
agreement between parties that disputes between them be tried in one Court rather than the
other is not illegal. This section does not apply if the contract is clear, unequivocal, explicit,
and not unclear. However, an agreement cannot bestow Jurisdiction on a court that lacks
jurisdiction to hear the case. And if the Court designated in the contract lacks Jurisdiction. the
Jurisdiction of other courts is not precluded. A clause in a bill of lading providing that
questions arising from the statement be handled by the High Court of Calcutta rather than the
Courtat Mirzapur, which was the competent venue to decide the questions, is void and cannot
be pled in the bar of an action brought in the Mirzapur Court. A contract including the phrase
"Madras jurisdiction" indicates an agreement to have the dispute adjudicated in Madras, and
the clause is legitimate. Similarly, a condition in an insurance policy requiring adjudication
by Bombay courts. or any other contract. With a provision requiring any disputes to be
resolved in "the Bombay High Court or other courts in the town and island of Bombay as
having jurisdiction in the subject."

Limiting Jurisdiction to one or More Competent Courts

This clause nullifies only agreements that "totally" bar a contracting party from exercising
their rights under the contract in regular tribunals. It does not apply if a party agrees not to
limit the enforcement of his rights in ordinary courts, but simply agrees to select one of those
usual tribunals in which a matter would typically be tried. The legitimacy of an agreement in
which the parties prefer one of two courts is dependent on the condition that both courts must
have Jurisdiction in determining the subject. Where two or more courts haveJurisdiction to
try a claim, an agreement between the parties restricting the Jurisdiction to one Court is
neither contrary to public policy nor a violation of section 28 of the Contract Act. A similar
clause, limiting Jurisdiction, applies to actions in courts under arbitration legislation.

Choice Clear and Unambiguous

The option should be unambiguous and explicit. The party invoking the provision must
strictly demonstrate that the limitation relates to the proceedings at hand. The words "subject
to ABC jurisdiction" do not, in and of themselves, exclude or oust the jurisdiction of other
courts, unless words like "only" or "exclusively" or "alone" or the like are used to show an
unambiguous intention to exclude the jurisdiction of other courts; 3343. and in the absence of
such words, exclusion of different courts cannot be inferred. When parties consented to the
jurisdiction of the High Court of Mumbai, they were referring to the Bombay High Court. A
three-judge bench of the Supreme Court ruled that when the parties' purpose to bestow
Jurisdiction on courts in a specific location was obvious, the omission of terms such as
"alone," "only," or "exclusive" in the jurisdiction provision would not make a material
difference. The legal principle of expression unius est exclusion alterius would apply, and the
expression of one would be the exclusion of another. The conclusion that may be taken from
stating the Jurisdiction of the courts at a specific location is that the parties are meant to
exclude all other courts.

Choice of Both the Parties

Both parties must agree to the ouster, and it can even be inferred. Where a transaction was
conducted through brokers and the invoice included the terms "subject to Shimoga
jurisdiction," and the purchaser was unaware of it, the exclusive Jurisdiction of Shimoga Courts
cannot be said to have been agreed to; the past course of transactions was insufficient. It was
decided that when the terms were printed on a bill or a consignment note, the Jurisdiction of
other courts was not barred. A party relying on a clause limiting Jurisdiction from particular
courts and restricting it to specified courts exclusively must demonstrate that it was clearly and
appropriately brought to the other party's attention. It will be difficult for the Court to holdthat
there has been unanimity ad idem with relation to the provision eliminating Jurisdiction ofall
courts other than the Court mentioned therein if a form printed by one party is signed
exclusively by that party and given to the other party without anything else. Suppose a
consignment note contains a clause limiting Jurisdiction to one of the two courts with
Jurisdiction over the subject matter of the dispute and the note is not signed by the consignor
and the consignee. In that case, thatclause is not binding on the consignor or the consignee unless
his attention is specifically drawnto the condition, "say, by writing it in red or by putting up a
red sign," showing the situation.

The choice is Binding on Parties.

As long as the parties to a contract do not oust the jurisdiction of all courts that would otherwise
have jurisdiction to decide the cause of action under the law, it cannot be said that the parties
have, by their contract, ousted the Jurisdiction of the Court, and where the parties to a contract
agreed to submit the disputes arising from it to a particular jurisdiction that would otherwise
also be a proper jurisdiction under the law, their agreement to the extent that When such an
ouster clause arises, it is important to determine if other courts' authority is ousted.
When the provision is explicit, plain, and precise, the contract binds the parties, and the other
courts should avoid exercising Jurisdiction until the lack of ad idem can be demonstrated. Both
parties must agree to the ouster, and it can even be inferred. Where a transaction was conducted
through brokers and the invoice included the terms "subject to Shimoga jurisdiction," and the
purchaser was unaware of it, the exclusive Jurisdiction of Shimoga Courts cannot be said to
have been agreed to; the past course of transactions was insufficient. However, despite a
contract term specifying one of the courts with Jurisdiction where all disputes arising from the
contractwill be litigated, the Court may consider the facts and relevant circumstances of the
case. It may refuse to enforce the stipulation as to the choice of a forum if it is oppressive,
unfair, or inequitable. and thus, an agreement between the parties that the Jurisdiction would
be limited to courts having jurisdiction over a particular territory. If the Court possesses
Jurisdiction in thesubject and, despite the contract's provision to the contrary, a party to the
contract resorts to itsJurisdiction, a feasible response might be to saddle the party with the
expenses of theproceedings regardless of the outcome rather than to not suit it.

In Snehalkumar Sarabhai v Economic Transport Organisation, it was held that the ouster clause
might work as estoppel against the contract's parties. It cannot bind the Court's hands and
deprive it of its ability to execute justice. It is undeniably true that, in most cases, courts would
uphold a party's agreement based on a meeting of the minds and considerations of convenience.
However, courts are not required to do so in every case...a fresh approach to this subject is
required since the ouster clause is designed to function as an engine of oppression and a method
of defeating the goals of justice. The Supreme Court took note of these words of warning in a
 later decision. The jurisdiction clause was overlooked in a case when the products were
committed at another location, where the witnesses also lived, and the sum claimed was
comparably minor. However, it has also been decided that the voluntary consent of the forum's
parties should not be disturbed, and the excluded Court cannot evaluate the balance of
convenience or devise a new technique to relieve the parties of their contract. A contract
between parties excluding a court's Jurisdiction is not enforceable binding on a third party
unless such a third party's attention is properly given to it such a provision is included in the
contract, and he is made aware of its ramifications. Thus, where the suit was filed in the Court
at Hyderabad by the insurance company for recovery of damages for short delivery of goods
delivered at Hyderabad, it was held that in the absence of any evidence that the insurance
company, as a third party, was made aware of the implications of the lorry receipt; and since
no part of the cause of action had arisen in Calcutta, it was not open to say that the suit could
only be filed in the Court in Calcutta as stipulated.

Conflict of Laws and Choice of Jurisdiction

Although the parties can agree that any dispute arising from their contract would be resolved
through Arbitration, to the exclusion of other courts, subject to courts' authority in a specific
region Courts, the parties who choose a tribunal will be obligated by it. In India, such
contracts are not required to be enforced if the option is limited. They were sent to a foreign
court. When a court retrains a party in a lawsuit or action before it It is prohibited from
commencing or prosecuting a matter in another court, even a foreign court. Known as an anti-
suit injunction. It is a well-known fact that Indian courts have the authority to provide an anti-
suit request to a party over whom it has personal jurisdiction in an action suitable situation.
Thus, where the suit was filed in the Court at Hyderabad by the insurance company for
recovery of damages for short delivery of goods delivered at Hyderabad, it was held that in
the absence of any evidence that the insurance company, as a third party, was made aware of
the implications of the lorry receipt; and since no part of the cause of action had arisen in
Calcutta, it was not open to say that the suit could only be filed in the Court in Calcutta as
stipulated. When a court's Jurisdiction is invoked based on a contract's jurisdiction clause, the
recitals therein regarding the exclusive or non-exclusive jurisdiction of the Court of the
parties' choice are not determinative but are relevant factors, and when a question arises as to
the nature of Jurisdiction agreed to between the parties, the Court must decide the same on a
true interpretation of the contract on the facts of the case. A court of natural Jurisdiction will
not typically grant an anti-suit injunction against a defendant who has consented to submit to
the exclusive jurisdiction of a court unless there are special circumstances.
A party to a contract containing a jurisdiction clause cannot normally be prevented from
approaching the Court of the parties' choice because doing so would amount to aiding
breachof the contract because the proceedings in that Court cannot be considered vexatious
or oppressive in and of themselves, nor can the Court be said to be forum non-conveniens.
However, an Indian citizen entering into a contract while in India will not be allowed, and
will not be authorized, to evade the application of Indian law to the contract formed in India
be accomplished in a portion or the entirety of India Each country has its own Private
International Law norm, while there is a considerable deal of similarity and even overlap.
Ordinarily, private international law is triggered when a foreign party is involved in a
transaction between two parties. A foreign element necessitates that the Court considers
problems of Jurisdiction, choice of law, and whether or not a foreign judgment obtained
would be enforceable, and if so, how it would be enforced. The Court's first and greatest
concern in such instances is determining Jurisdiction. This item is not violated by a clause
stating that parties will not be entitled to a jury trial. All disputes will be sent to the
International Chamber of Commerce for Arbitration in Singapore.

Two Indian parties had agreed that Arbitration would handle any disagreements between
them in London in line with the Grain and Food Trade Association Ltd.'s arbitration
procedures. While dismissing the claim that the award was unenforceable, being prohibited
by sections 23 and 28 of the Contract Act, it was determined that just The fact that the
arbitrators are in a foreign nation cannot be used to invalidate the decision. when the parties
have freely entered into the arrangement and that the case was covered by section 28
exemption 1 In terms of the bill of lading, the transaction was regulated by English law, and
the courts in England alone had authority over the shipper. The charterer's argument to the
shipper's invocation of the Court in Cochin's lack of Jurisdiction was denied because the
charterer had either waived or failed to raise its objection. The occurrence was referred to the
Indian Court's Jurisdiction.

In Man Rolan Druckimachinen v Multicolor Offset Ltd, 3373, the appellant before the
Supreme Court was a German-incorporated firm with an agent in Bombay, India. The
printingmachines were provided via an agreement. The purchaser from Germany is the
appellant. Thepurchaser filed a claim with The Monopolies, and the Restrictive Trade
Practices Commission hasfiled an unfair trade practice complaint. The appellant objected
because the agreement between the There was not just a provision for Arbitration by the
International Chamber of Commerce. Commerce, but also a provision granting German
courts authority over the appropriate law, is German law.
The ruling issued by the Monopolies and Restrictive Trade Practices Commission held,
among other things, that the language in the agreement about the choice of Forum violated
sections 23 and 28 of the Contract Act. And was challenged in front of the Supreme Court.
The Supreme Court, in ruling that the Courts will enforce an agreement limiting Jurisdiction
to a specific venue, has been decided. However, such removal would apply only when a court
is called upon to enforce rights. Resulting from a contract The MRTP Commission's
processes were separate from civil court actions, and the abolition of the jurisdiction
provision in the Such methods would be exempt from the agreement. It has been ruled that
geographical Jurisdiction of the Court and application of law are two different things. Even if
an issueis determined in a nation other than the one in which the agreement was executed,
the law that would apply would be the law agreed upon by the parties. The principle of
judicial comity, according to which courts in one State or jurisdiction will give effect to the
laws and judicial decisions of another, not as a matter of obligation, but out of deference and
mutual respect, cannot be used to prevent a party from filing a suit in the appropriate civil
Court of Jurisdiction in India based on a contract clause when there was no law or judicial
decision of another jurisdiction. In a case where the contract was stipulated for adjudication
by an arbitrator in England, the Bombay High Court 3376. halted the action, as did the
Calcutta High Court in identical circumstances, when the foreign trade contract was
controlled by Italian law. The Calcutta High Court heard the Appeal. Eld that if, after
considering the facts, the Court determines that staying the litigation would be unreasonable
or unfair, it will refuse to issue the stay. It further concluded that the relevant contract law
was Italian law, but thatan agreement, whether performed in India or elsewhere, could not
eliminate the Jurisdiction of the Indian Court. However, in that situation, the balance of
convenience was not in favor ofthe Indian trader, and hence the stay was granted. Section 28,
does not apply to an agreement between an Indian and an English corporation that excludes
the Jurisdiction of Indian courts.

A bill of lading about a contract of affreightment of commodities to be carried to Calcutta

agreed upon in Sweden between two Swedish parties allowed for resolving any disputes
arising out of the transaction under Swedish law in Sweden. The provision was found to be
legal and not contrary to public policy. A clause in a bill of lading limiting Jurisdiction in
respect of disputes to Italian courts was affirmed because the Italian Court designated had the
authority to try the matter under ordinary law. It is also not an objection toan arbitration
agreement if it specifies that any arbitration proceedings under the agreement must take place
in a certain nation or city. The Calcutta High Court stayed an action and instructed that the
issue be resolved in Bulgaria, based on the balance of convenience and thelegislation
applicable to the facts of the case. The factors included the applicable contract lawin the case,
 the nature of the dispute, the availability of evidence, and the parties' relative convenience.
Was made is not allowed to sue for maintenance that has been in arrears for more than one
year is null and invalid. A regulation under Statute 35 of the Post Office Act that limits
responsibility regarding sums specified by remittance unless a claim is filed within one year of
the date of posting of the article is unlawful because it goes beyond the powers provided by
the section. Even if it is considered a contract, it is null and invalid under Section28 of the
Contract Act. The imposition of a six-month time restriction for beginning Arbitration under
the bye-laws of a Stock Exchange authorized by SEBI violates this clause. A stipulation
requiring a shorter period to file an action than that allowed for in section 10 of the Carriers
Act circumvented the provisions of that section and violated this section. A clause that
restricts the time frame in which the parties can seek Arbitration is likewise null and invalid.
Section 28 targets a clause that limits the amount of time a claimant has to file a claim.
Similarly, a condition requiring notice to be delivered within 10 daysof an event would be
unlawful under section 28. The arbitrator's rejection of a claim for failing to be lodged within
90 days as required by the General Conditions of Contract was deemed to violate this clause.

Limitation of Time for Enforcing Rights under a Contract

An agreement that requires an action to be filed for breach of any of the agreement's
provisions within a time restriction shorter than the period of limitation established by law is
invalid to that extent. The impact of such an agreement is that the parties are barred from
exercising their rights after the end of the specified term, even if it is within the period of
limitation. An agreement stating that a person in whose favor a provision for maintenance
Agreement relating to Release or Forfeiture of Rights

Before the 1997 amendment to this section (see below), agreements reducing the period of
limitation were distinguished from those that did not limit the time within which a party could
enforce his rights but provided for a release or forfeiture of rights if no suit was brought within
the period stipulated in the agreement. The latter class of agreements, outside the scope of the
current section, were binding between the parties. Limiting the period for asserting rights was
unlawful under section 28. However, a contract provision stating that rights accruing to aparty
under the contract would be forfeited or waived if the party did not suit within the period
specified in the contract would not come inside section 28. The right accruing to the party
ceased to exist under the contract itself when the time limit specified in the contract expired.
There was a simultaneous relinquishment of the rights accruing under the contract and the
remedy to enforce it.

Before the 1997 amendment, the section's ingredients were as follows:

(1) A party should be prohibited from enforcing its rights under or in respect of any contract;

(2) Such absolute prohibition should be to approach, by way of a usual legal proceeding,
theordinary tribunals set up by the State; and

(3) Such absolute prohibition may also relate to limiting the time within which the party may
thus enforce its rights.

It is one thing to assert one's rights; it is quite another to enforce those rights in a courtof law.
The Fidelity Insurance Guarantee Bond required the Corporation if it desired to utilizeits bond
rights, to notify the insurance company of the claim for loss within six months after contract
termination. The contract provision did not limit or restrict the filing of the suit; instead, it
prescribed a specific time frame within which the party had to claim the right and put the
opposing side on notice. Section 28 did not prohibit such a condition antecedent to bringing
the claim.

Section 28 of the Contract Act did not apply to a contract that did not restrict the time during
which the insured might defend his rights, but merely limited the duration during which the
contract would stay in effect. 3396. Common provisions in insurance policies state that the
insurer should not be liable for loss or damage beyond a period of 12 months from the
occurrence of the loss or damage unless a claim was subject to a pending action or Arbitration
that did not breach section 28. Neither did a condition requiring the forfeiture of all benefits
unless action was brought within a certain time from the rejection of a claim or a condition
requiring that risk be limited to three days after the arrival of a train at the destination, with no
liability for loss attaching unless notice was given within ten days of the said risk or a clause
in a bill of lading excluding liability for loss or damage unless the plaintiff brought a suit within
one year

In summary, an agreement providing for the relinquishment of rights and remedies was
legitimate, but an agreement providing for the relinquishment of remedies alone fell within the
mischief of section 28. Thus, a clause in a fire insurance policy stating that "if the claim is made
and rejected, and any action or suit is not commenced within three months after such rejection,
all benefits under this policy shall be forfeited," was valid, because such a clause operated as a
release of forfeiture of the assured's rights if the condition was not met, and a suitcould not be
maintained on such a policy after the expiration of three months from the date of the claim.
Similarly, a bill of lading condition that said "in any event, the carrier, and the ship will be
released from all liability in respect of loss or damage unless a claim is brought within one year
following the delivery of the goods" was upheld. When one of the conditions of a marine
insurance policy stated that no suit by the assured could be sustained in any court unless the
suit was commenced within six months next after the loss and that if any suit was commenced
after the expiration of six months, the lapse of time should be taken as conclusiveevidence
against the validity of the claim, it was held that the assured could not sue on the policy after
the six-month period had expired. A clause in an insurance policy that stated that the insured
would have no rights under the insurance policy after six months from the date of contract
termination allowed the insured to claim its loss up to six months from the date of contract
termination, but not beyond; it did not require a suit or legal proceedings to be filed within that
period. The Supreme Court also ruled that a language in a policy stating that the insurer would
not be responsible for any loss if the claim was lodged more than 12 months after the loss
occurred was not covered by section 28 and was legitimate.

The 1997 Amendment

The 1997 Amendment to the section now includes forbids provisions that aim to extinguish
any party's rights or discharge any party's liabilities under or in respect of any contract on the
expiration of a set time to prevent any party from asserting his rights. The amendment gives
effect to the Law Commission of India's 97th Report. The Statement of Objects and Reasons
for the Amendment demonstrates that the section's anomalous condition was intended to be
resolved by declaring void a clause limiting a remedy while holding valid a clause terminating
the rights, inflicting considerable hardship. The terms affected by the change have served a
function, particularly in insurance contracts. They guarantee that claims under the policy are
filed and examined as soon as possible, reducing the risk of losing critical evidence.

If claims are not filed promptly, insurers may be unable to fulfill a false claim. In situations of
fire insurance or accident insurance, responsibility should be estimated while the circumstances
are fresh and can be quantified with a certain level of precision; loss of time makes it impossible
to determine, and men's recollections can become rather foggy. The commission seemed
unconcerned about such arguments. Before the amendment, agreements reducing the period of
limitation were distinguished from those that did not limit the time within which a party could
enforce his rights but provided for a release or forfeiture of rights if no suit was brought within
the period stipulated in the agreement; and Arb. P. No.246/2005 Page No.5 of 12 it was held
that the latter class of agreements was binding between the parties. The amendment's history
is unusual, as detailed by the Supreme Court. The amendment aims to do away with the
difference created in case law between agreements that limit the period in which remedies can
be sought and agreements. This, by restricting the duration, effectively eliminatesthe right. Its
goal is to bring about a significant shift in the law by saying, for the first time, thatAn agreement
terminates the rights or discharges the liabilities of any party to an agreement. The agreement,
such that such party is barred from asserting his rights at the expiration of an If the stated term
is not met, the agreement is null and invalid. Agreements that restrict the rightto prefer a claim
by providing a period within which claims may be preferred, as well as agreements that
extinguish a party's right to prefer a claim or discharge any party from any liability under a
contract on the expiry of a specified period, are void after the Amendment of 1997. The
modification was proposed to avoid not only a misunderstanding of the pre-amendment clause,
which might result in severe hardship for the economically disadvantaged but also exploitation
of the pre-amended provision. The modifiedclause restricts its application to parties at par in
commercial transactions, neither directly nor implicitly. The change to Section 28 is neither
declarative nor clarifying; it is a corrective measure that cannot be retroactive. The 1997
Amendment is prospective and will not apply to insurance contracts entered into before its
implementation. Rights that had previously accrued and/or wereextinguished under existing
contracts before the section's alteration did not strip the modification. The new section28 would
apply only to agreements entered into after the amendment went into effect, i.e., on January 8,
1997, and not to contracts negotiated previousto that date. The Repealing and Amending Act
of 2001 does not affect it (Act 30 of 2001) A clause stating that if demand for Arbitration
relating to a claim is not made within 90 days, the claim will be extinguished, is a violation of
the section after the 1997 Amendment and will have to be read down by the Court by treating
the operation of such clauses as a directory in nature to the extent they restrict the right to
arbitrate. The revision to section28 affects a provision that expires the right to submit a claim
after a specific number of days. It has been found that section 28 does not apply to a clause in
the Articles of the Company demanding theinvestor's approval before initiating or ceasing any
litigation significant to the company's operations since the consent requirement is just a
condition antecedent.

The 2012 Amendment

The 2012 Amendment, which inserts Exception 3 with effect from 18-1-2013, protects terms
in guarantees granted by banks and other institutions of the categories specified in the
amendment.
Agreement extending the period of Limitation

The section makes no provision for agreements that extend the term of limitation for asserting
claims arising under it. Their Lordships stated their judgment in a matter before the Privy
Council, that in an agreement in contemplation of an inquiry into the merits of a disputed
claim, no advantage should be taken of the statute of limitations in respect of the time utilized
in the inquiry. It was not a bar to the limitation plea, but action might be taken for breach of
such an agreement. There is little dispute that an agreement that provides for a longer term of
limitation than the law permits falls beyond the purview of this clause. Such an arrangement
most clearly does not come within the first branch of the provision. There is no restriction on
the right to sue; on the contrary, it tries to preserve the right to suit even after the term of
limitation has expired. This is also not an agreement that limits the time available to assert
legal claims. It would, however, be void under section 23, since it would tend to circumvent
the requirements of the Limitation Act, 1908, section 3 of which states that any suit
commenced beyond the term of limitation stipulated (by the Act) must be dismissed, even if
the limitation is not imposed.

Void "To That Extent"

If an agreement contains an invalid provision under this section, just that stipulation is
unenforceable, not the whole agreement. According to Garth CJ, this clause applies to
agreements that entirely or partially preclude the parties from seeking redress in a court oflaw.
For example, if a contract contains a stipulation that no action should be brought against it, that
stipulation would be void under the first part of s.28 because it would prevent both parties from
enforcing their rights under the contract in ordinary legal tribunals; similarly, if a contract
contains a double stipulation that Arbitration should settle any dispute between the parties and
that neither party should enforce his rights under it in a court of law, that stipulates that all
disagreements between the parties be submitted to Arbitration since it wouldnot have the effect
of removing the Court's Jurisdiction. Courts, but the later branch, of the requirement, would be
null and invalid since The Court's jurisdiction would have to be ruled out.

Shin Satellite Public Co Ltd v Jain Studios Ltd, an arbitration clause containing a provision
that the arbitrator's determination shall be final and binding between the parties, and the parties
waived all rights of Appeal or objection in any jurisdiction, was held void (as conceded by the
parties). It was held that this part of the clause could be severed and would not affect the parties'
right to recourse to Arbitration.
Construction

A provision limiting Jurisdiction to one of the courts must be vigorously enforced. When a
condition required that actions emanating from a "contract" be brought in court M, it did not
apply to a claim when the offer had not matured into a full contract. When construing a
condition in an agreement requiring a claim to be brought within a period smaller than the
time authorized by the Limitation Act, the Court must read down the operation of such
clauses to the degree they restrict the right to arbitrate as only advisory in character.

Exception I

This exemption provides a rule stating that it is not unlawful to enter into a contract in which
two or more people agree that any disagreement that has arisen or may develop between them
over any subject or class of subjects will be resolved through Arbitration. The exemption
protects contracts in which the ability to petition the Court for appropriate redress is limited
but the parties have agreed to settle their disagreement through Arbitration. The condition that
no action shall be taken until the arbitrators issue an award determining the amount to be paid
in damages must be followed. The fact that the arbitrators are in a foreign nation cannot, by
itself, negate the arbitration agreement, especially where the parties started and participated in
the arbitration procedures and the arbitrators issued an award. A member of a club bound by
its bye-laws may not be heard to claim that the bye-laws requiring Arbitration violate Section
28. Thus, the provisions in Scott v. Avery and Atlantic Shipping are protected by this
exemption. The former clause refers to a contract term that states that if a disagreement
arises, it shall be referred to arbitrators, whose verdict shall be a condition antecedent to any
right of action in respect of the agreed-upon things being referred being legitimate. This is
true not only when the arbitration provision exclusively refers to the number of damages
owed by one party to the other, but also when it is provided that additional factors, such as
Arbitrators, for example, will assess guilt in the first instance. It is a provision that requires
the arbitrator to have made an award as a condition antecedent to the accrual of any cause of
action. The last paragraph states that no claim shall emerge unless it is made in writing and
an arbitrator is appointed within a specified time frame. To comply with this exemption, the
courts' Jurisdiction must be excluded in all respects save in matters arising from the
arbitrator's award. The clause does not exclude referring to a claim for damages for breach of
such an arbitration agreement. If there is merely a clause requiring the parties to send the
subject to Arbitration, an action would still be valid; nevertheless, under the Arbitration Act,
1940 3435. the other party had the remedy of applying for a stay of the suit under section 34,
and the Court had the discretion to grant the stay. Section 8 of the Arbitration and
Conciliation Act of 1996, on the other hand, states that On an application by one of the
parties, the Court has no discretion in directing the issue to Arbitration. Based on an
arbitration agreement, a party is not barred from commencing a claim in the proper civil
Courtof Jurisdiction. If the opposing party submits a motion to compel Arbitration, the
subject matter of the complaint must be assigned to Arbitration an application under Section
8 or Section 45 of the Arbitration and Conciliation Act of 1996. If an award's making
constitutes a condition antecedent to a right of action, such suit will not lie; if such suit is
instituted, it will be dismissed as premature; and the issue of stay of such litigation will not
arise. A legitimate agreement to refer a case to Arbitration can be established as a condition
precedent before proceeding to Court, and it does not contradict section 28. No cause of
action arises until the arbitrator issues the award. However, if a party brings an action about
one of the "excepted subjects" covered by such provisions, it is assumed to have ceded,
renounced, or abandoned its rights under such a clause. This exception applies only to a
subset of contracts in which the parties have agreed (as in the cases of Scott v Avery and
Tredwen v Holman cited by Phear J) that no action shall be brought until some question of
amount has first been decided by references, such as the amount of damage sustained by the
assured in marine or fire policy. Such an agreement does not preclude the courts' Jurisdiction;
it only holds the plaintiff's hand until a certain sum of money has been determined by
reference.

Exception 2

This exemption applies to any written contract in which two or more people agree to send any
existing dispute between them to Arbitration, even if such a contract does not exist. The
legislation governing Arbitration would now apply to contracts as well. The exclusion also
specifically states that the requirements of this section will have no effect. Any current
legislation about referrals to arbitration Arbitration is a recognized technique of dispute
resolution that is not contrary to public policy. Arbitration is presently controlled by the
Arbitration and Conciliation Act, 1996, under which parties may agree, in writing, to submit
to arbitration all or certain disputes that have arisen or may arise between them in connection
to a specified legal relationship, whether contractual or not. If a suit is filed in the same
subject matter as the arbitration agreement, the party desiring arbitration may apply to the
Court for reference, which the party must do before submitting the first statement of
substanceon the dispute in Court. If the litigation is about the same thing as the arbitration
agreement, the Court will send the parties to the Arbitration. Unlike Section 34 of the
Arbitration Act of 1940, the Act of 1996 gives the court discretion in submitting the subject.
The Arbitration and Conciliation Act of 1996 specifies the membership of the arbitral
 tribunal, its Jurisdiction, the conduct of arbitral processes, the making of arbitral awards, and
the conclusion of proceedings, as well as the right of appeal against the verdict.
The Act also allows for a conciliation procedure, which begins with an invitation from oneparty and is
accepted in writing by the rather. Section 77 of the Act states that the parties must not start any
arbitral or judicial procedures about a dispute that is the subject of the Conciliation proceedings during
the conciliation processes unless such proceedings arerequired to maintain their rights.

A clause that requires a party to first approach an officer of the opposite party in the event of
a disagreement and that his judgment is final is legitimate and binding. As a result, if the
contractor seeking payment for extra work done did not follow the method outlined in the
contract, which required a determination of the problem by the Engineer or an appeal
authority, he could not bring the claim to Arbitration. Such terms will only apply to the
topicsreferred to in the ruling. It is not required to exclude the Court's Jurisdiction that the
contract state that the award of the designated tribunal is a condition antecedent to legal
proceedings. This exception applies to an agreement between a tramway company and a
conductor that themanager of the company shall be the sole judge as to the company's right
to retain the whole or any part of the deposit made by the conductor as security for the
discharge of his duties, and that his certificate in respect of the amount to be retained shall be
conclusive evidence between the parties in courts of justice. Such an agreement does not
abdicate the courts' authority. Its impact is basically to make the manager the sole arbitrator
between the company and the conductor over whether the firm is allowed to keep the entire
or any portionof the deposit in the case of the conductor's wrongdoing. The point is quite
similar to those agreements in which an engineer or architect is appointed as an arbitrator
between a contractor and the person who hires him to determine what should be permitted in
the event of a disagreement over extras or fines. Such a person has quasi-judicial powers, and
his decisions can be challenged in Court. The certificate of an architect mentioned in the
agreement and settling the case is binding on the parties, regardless of how incorrect it may
be, and the final certificate may be disputed only based on fraud, collusion, or misconduct on
the part of the architect. A clause that requires a party to first approach an officer of the
opposite party in the event of a disagreement and that his judgment is final is legitimate and
binding.

As a result, if the contractor seeking payment for extra work done did not follow the method
outlined in the contract, which required a determination of the problem by the Engineer or an
appeal authority, he could not bring the claim to Arbitration. Such terms will only apply to
thetopics referred to in the ruling. It is not required to exclude the Court's Jurisdiction that the
contract state that the award of the designated tribunal is a condition antecedent to legal
proceedings. brokers, and that their judgment should be final, does not fall under the
Jurisdiction of this section nor does a contract that stipulates that Arbitration will resolve all
disputes resulting from the contract. The conflict between the parties should be brought to the
Bengal Chamber of Commerce for Arbitration. Commerce, whose judgment should be
considered as final and binding on both parties to the agreement. Even less is it inappropriate
for the parties to ongoing litigation to give the Court if they agree, complete power to rule the
whole case without further Appeal? A clause in an agreement stating that, except as
otherwise provided in the contract, the decision of the superintending engineer shallbe final,
conclusive, and binding on certain matters therein mentioned does not make him an
arbitrator, and the clause does not violate Section 28 of the Contract Act or Section 21 of the
Specific Relief Act, 1963. A stipulation that parties to a reference shall not object to the
validity of the award on any ground whatsoever before any court of law, does prohibit a party
from enforcing his rights in ordinary to set aside an award on the ground of misconduct on
the part of the arbitrator, where the agreement to submit to Arbitration contained a restrictive
stipulation of the above character, 3454. and the two exceptions to this section have no effect.
a gathering to An arbitration agreement now includes the ability to have an award set aside
due to the arbitrator's misconduct and a stipulation by which he ties himself to accepting the

Award as final in all situations has the effect of limiting him barred from asserting his right
and, as a result, is null and void under the requirements of this section.
The Repealed Clause of Exception 1

The Specific Relief Act of 1877 abolished the second clause of exemption I.

Section 21 of that Act, now section 14(2) of the Specific Relief Act of 1963, states that:
"Except as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or
future differences to Arbitration shall be specifically enforced; but if any person who had
made such a contract (other than an arbitration agreement to which the provisions of the said
Act apply) and has refused to perform it, sues in respect of any subject to which he has
contracted to If an action is launched on any such issue, the defendant must demonstrate that
the agreement is still in effect and that the plaintiff has refused to perform it before he may
rely on the provision as a bar to the litigation. The mere filing of the objection does not
constitutesuch a rejection. A party to a reference has two options for resolving a violation of
the agreement. As specified in section 14(2) of the Specific Relief Act, 1963, he may sue for
damages for the breach, or he may plead the agreement in the bar of any litigation filed
against him in violation of the agreement's provisions. However, the provisions of that Act
are null and void wherever the Arbitration Act of 1940 applies. By far, the majority of
arbitrations are conducted through the more expedient machinery of the latter. The
Arbitration and Conciliation Act of 1996 now governs all arbitrations.

Exception 3

The Banking Laws (Amendment) Act of 2012 adds this exemption to the clause. The 2012
Amendment preserves terms in guarantees granted by banks and financial institutions of the
categories specified in the amendment. The Supreme Court stated that, by including
Exception No. 1, Parliament has, to a significant measure, redressed any grievance that may
emerge relating to bank guarantees in particular.
 CASES

1. Hakam Singh v Gammon(India) Ltd.

In this case, the parties reached an agreement for some construction work, with Bombay serving
as the central location for the business. In clause 13 of the tender, it was clearly stated that in the
event of a dispute, only the Bombay High Court would have jurisdiction to hear the case. When
a disagreement arose, the appellate filed a petition in Varanasi's court.

According to the Supreme Court, "it is not open to the parties by agreement to confer jurisdiction
on a court that it does not have under the civil procedure code." However, where two or more
courts have jurisdiction to try a suit under the civil procedure code, an agreement between the
parties that the dispute between them be tried in one of such courts is not contrary to public policy.
This type of agreement does not violate Section 28 of the Contract Act."

According to Section 20 of the Code of Civil Procedure, 1908, there are three jurisdictions to a
contract: the place of making the contract, the place of performance of the contract, and finally
the defendant's place of business and residence. If the parties agree that only one of the above-
mentioned jurisdictions competent under the civil procedure code will be considered, the
provisions of Section 28 will not be violated. It should also be available at a reasonable cost and
should not be inaccessible.

2. ABC Laminart v A.P Agencies

In this case, the parties had a contract for the supply of Ruoplon Metallic yarn. The Appellant was
based in Kaira, Gujarat, and the Respondent operated his business in Salem, Tamil Nadu. The
contract's jurisdiction clause states, "Any dispute arising out of this sale shall be subject to Kaira
jurisdiction." On the occurrence of a dispute, the respondent filed a suit in the court of Salem,
Tamil Nadu. The appellant, in this case, filed a case challenging the Salem court's jurisdiction,
and the dispute was appealed to the Supreme Court.

The Supreme Court noted that there is no explicit mention of exclusive jurisdiction in the contract
clause. The court ruled that in the absence of the words "only," "alone," and "exclusive," the
maxim "Expressio unis est exclusion alterius" should be used, which means that the explicit
mention of one is the exclusion of another. The court stated that "where the clause specifies one
of the two courts having jurisdiction without expressly excluding the jurisdiction of the other
court, held on facts, both courts had jurisdiction."

3. Swastik gases private limited v Indian Oil Corporation Limited

 The appellant worked as a consignment agent in Jaipur, Rajasthan, and the Respondent
sells lubricants, oil, and other petroleum products. The parties reached an agreement in
which the appellant was appointed as a lubricant marketing agent in Jaipur, Rajasthan.
Meanwhile, a disagreement between the parties arose regarding the location of the
agreement's signing. The respondent claims the agreement was signed in Kolkata, while
the appellant claims it was signed in Jaipur. The appellant sent a notice regarding
arbitrator nomination and requested that the respondent nominate an arbitrator within 30
days. Because the respondent failed to appoint an arbitrator, the appellant invoked
Section 11 of the Arbitration and Conciliation Act of 1996.

The Supreme Court ruled that the clause in the agreement stating that disputes would be
subject to the jurisdiction of Kolkata implies that the Kolkata court has exclusive
jurisdiction over the matter. The court determined that the use of words such as "only,"
"alone," "exclusive," or "exclusive jurisdiction" is not required to exclude the court's
jurisdiction; rather, the intention of the parties to the agreement is required. When the
agreement specifies that it is subject to the jurisdiction of a specific location, it is
implied that it has excluded the jurisdiction of all other courts.

It should be noted that in the ABC Laminart case, the court emphasized the use of words
like "only," "alone," and "exclusive" to be considered as a court's exclusive jurisdiction
and held that both the courts of Karia and Salem had jurisdiction over the matter. In the
Swastik case, on the other hand, the court ruled that even without the use of such words,
it is implied to have exclusive jurisdiction of a court in a specific location.

4. Delhi bottling co. ltd. v times guaranty financials ltd.

The parties signed a purchase agreement in this case, and clause 12.7 stated that "it is
agreed by and between the parties that the civil courts in BOMBAY shall have exclusive
jurisdiction in respect of any matter, claim, or dispute arising out of or in any way
related to this agreement."

There was a disagreement between the parties about the court's jurisdiction; the question
was whether the courts of Delhi had jurisdiction over this matter.

The court ruled that the agreement's clause clearly stated the courts of Bombay's
exclusive jurisdiction and that the courts of Bombay have exclusive jurisdiction to try
the case.
 The court also contends that when two or more courts have jurisdiction to try a case, an
exclusive jurisdiction clause signed by the parties would oust the jurisdiction of the
other courts, leaving only one court with jurisdiction to try the case and that doing so
would not be contrary to Section 28 of the Indian Contract Act.

It was held that because the contract was executed in Bombay and the parties signed an
exclusive jurisdiction clause, the civil courts of Delhi had no control over the matter,
which was exclusively vested in the civil courts of Bombay.

5. Dilip Kumar Ray v. Tata Finance Ltd.

In the preceding case, the parties entered into a sale-purchase agreement, which was
executed in Madras. In a clause of the agreement, it was stated that any dispute over the
same would be referred to arbitration in Bombay. The parties agreed that the arbitration
would take place in Bombay. The petitioner claims that some payment is made in
Bhubaneswar and that the courts in Bhubaneswar have jurisdiction to hear the case. The
court ruled that because the arbitration clause in the agreement states that disputes must
be resolved in Bombay, Bombay has jurisdiction over the matter. The court also argued
that the location of payment does not confer jurisdiction on that location, and thus the
courts of Bhubaneswar lack jurisdiction to hear the case. Provision for international
jurisdiction: Clause of Unilateral Option The unilateral option clause addresses the use
of alternative dispute resolution methods such as arbitration or litigation, among others.
Regardless, this clause is only available to one party and is not mutual.

6. Emmons International Ltd v Metal Distributors (UK)

M/s Metal Distributors (UK) filed a case against the plaintiff to recover some money. It is
stated in their agreement that the contract will be governed by the law of a specific country
and that only the courts of that country will have jurisdiction to hear the case. The clause
states that the resolution of the dispute through arbitration will be governed by English
law. The plaintiff claims that clause 13 of the agreement, "Governing Law and Forum for
Dispute Resolution," is out of context, and that jurisdiction cannot be conferred or vested
upon/in a court of law solely by an agreement between the parties where the Court
inherently lacks jurisdiction in the matter.
The court determined that clause 13 is a unilateral covenant that contradicts public policy
and requires the plaintiff to initiate proceedings through ordinary tribunals or other dispute
resolution mechanisms. It was ruled that it violated Section 28 of the Indian Contract Act
of 1872 and was thus null and void.
7. Black sea state Steamship Line v The Minerals and Metals Trading Corporation of
India Ltd.
In this case, there was an agreement regarding the shipment of some material, and the
plaintiff purchased the case for damages incurred as a result of the late delivery of items.
"The shipper, receiver of goods, and holder of the bill of lading, as well as any other person
interested, hereby expressly accept and agree to all printed written or stamped provisions,
terms, and reserves of this bill of lading, including those on the back hereof," the bill of
lading stated.
The document also stated that "all claims and disputes arising under and in connection
with this bill of lading shall be judged in the USSR, and all questions and disputes not
mentioned in this bill of lading shall be resolved by the Merchant Shipping Code of the
USSR."
The court determined that it is a matter of recovering minor damages and that it would be
inappropriate to remand the case to Russian courts.
In the exclusive jurisdiction clause, there is ad idem consensus.
It should be noted that the exclusive jurisdiction clause must be clear and unambiguous,
and the contracting parties must be aware of it. The parties are not bound by simply
printing the clause in the consignment document.

8. Road Transport Organisation of India v Barunai Powerloom Weavers’ Coop

Society Ltd,

In the case of Road Transport Organisation of India v Barunai Powerloom Weavers' Coop
Society Ltd, it was determined that the clause relating to exclusive jurisdiction must be of
mutual consent and must be known to the person to whom the agreement is made. It is
critical to ensure that the consignor has been adequately informed about the exclusive
jurisdiction clause; otherwise, the question of whether the original party is bound by the
clause arises. The court stated in the case of V. Raja Rao v A.P.T. Co that the person to
whom the agreement is made to acquire delivery at the destination would also be bound
by the condition. It was determined that if the original party is not bound by the clause,
neither the party obtaining the right is bound.
The clause excluding one court's jurisdiction does not apply to the High Court, and the
clause excluding any court's territory only applies to a civil court. Before deciding on the
issue of exclusive jurisdiction, the court must consider all facts and circumstances, and
the use of words such as "alone," "only," or "exclusive" is not the only factor to be
considered.
9. United India Ins. Co. Ltd. V Associated Transport Corpn. Ltd.

The question of knowledge of the exclusive jurisdiction was raised in this case. In this
case, the clause in the consignment note mentioned in printed words "subject to Bombay
jurisdiction alone," which implies removing the jurisdiction of all other civil courts and
giving Bombay courts exclusive jurisdiction to try that case. The clause was signed by an
employee of the carrier, not by the consignor. Simply printing the clause does not bind the
parties to reject the jurisdiction; the most important factor to consider is the parties'
understanding of the clause and agreement.
The court held in this case that the printing of words does not ipso facto impose an
obligation on the parties regarding the ousting clause unless it came to the knowledge of
the parties and there was a subsequent meeting of minds regarding the same.

10. C. Satyanarayan v K.L. Narasimham

In the aforementioned case, the defendant wrote a letter that included the phrase "Subject
to Madras jurisdiction." The court ruled that such words do not remove the court's
jurisdiction until and unless they are mutually agreed upon.
The exclusive jurisdiction clause cannot be proposed by one party and must not be treated
as a unilateral agreement; rather, it must be agreed upon by both parties. The court ruled
that the recital was "merely a recital at the top of the bill and did not form part of the
contract."
 CONCLUSION

When there are two courts with jurisdiction to hear a case, an exclusive jurisdiction clause that

removes a court's jurisdiction does not violate the provisions of Section 28 of the Contract Act.

Many cases have evolved the nature of the Exclusive jurisdiction clause, in which the ambiguity

of this clause has been discussed. The court ruled in the famous case of ABC Laminart that the

use of words like "only," "alone," and "exclusive" must be treated as a whole perspective to

consider the validity of the Exclusive jurisdiction clause, but after The Swastik Gas case, it was

a relief for lower courts to understand the uncertainty of this clause. It was also useful for

people who use standard contract forms for dispute resolution and removing jurisdiction

clauses. The ambiguity in this clause is still being worked out, and it is preferable to draught the

clause and eliminate all ambiguous terms. It should also be noted that simply putting an

Exclusive jurisdiction clause in a contract does not bind the parties unless done with mutual

consent.
 BIBLIOGRAPHY

Books

1. Pollock & Mulla The Indian Contract Act,1872, 15th ed / The Indian Contract Act, 1872
2. Avtar Singh, Law of Contract (a Study of the Contract Act, 1872) and Specific Relief (Eastern
Book Company, Lucknow, 2019)

Website

1. https://lawcommissionofindia.nic.in/51-100/Report97.pdf

2. https://indiankanoon.org/doc/1224074/

3. http://docs.manupatra.in/newsline/articles/Upload/968A00BF-EA62-
4871-AF51-AE0DB6F096F1.pdf

4. https://www.latestlaws.com/articles/jurisdiction-clause-in-section-28-of-
indian-contract-act-1872-a-brief-overview-with-judicial-interpretation-
by-sourav-
pandiya/#:~:text=Section%2028%20of%20the%20Indian%20Contract%2
0Act%2C%201872,enforcing%20his%20rights%2C%20is%20void%20t
o%20the%20extent%E2%80%9D