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Reshma (Legal Consultant)     08 July 2011

Dispute Jurisdiction in contracts

A company is registered in India and governed by Indian laws and has its branch offices in different countires as well. In a contract which was entered b/w the said company and an agent who is based in Hong Kong, the agent comes back and asks the Indian company to change the jurisdiction for arbitration as Hong Kong. Can this jurisdiction be changed from India to Hong Kong? The indian company do not have any branch office in Hong Kong. Pl assist.


 2 Replies

Anup Gupta (Advocate & Corporate Consultant)     09 July 2011

Dear Reshma,

A Company incorporated in Indian under the provision of the Companies Act, 1956 having its registered office in India can be entered into any agreement with the Foreign Company or body corporate or individuals other than Indian in Indian.  

The parties to the Contract can agreed or decide the place/jurisdiction of arbitration clause either in Indian or other than Indian (Hong Kong). In case of other than Indian it should be also added that arbitration proceeding shall be governed by law of Hong Kong.

In your case, the agreement has executed and place of Arbitration is also agreed/decided by the parties. If agent who belong to Hong Kong desire to change place of arbitration from India to Hong Kong and if the both the parties is agreed than they have to enter into supplementary agreement for the same and this supplementary agreement is read as a part and parcel of the main agreement.

In case of any further query, please reply.


Raghav Aggarwal (Managing Director and Lead - Desk of International Business Practice)     14 July 2011

Hi Reshma

Having imbibed legal education internationally concentrated in the field of international business predominantly international business arbitration, I think I can help effectively. Any corporation be in indian or otherwise, when enters into a business transaction (contract) with a foreign company can sure select arbitration as selective mode of its contractual dispute resolution. In your case, the foreign company is a Hongkong company. In an international business contract, if the parties choose to arbitrate their disputes, then they can select any forum around the world to arbitrate their issues whether institutional or adhoc. Supreme Courts around the world have mandated an arbitral tribunal or institution to entertain a dispute before it. After all, they get money. Now, thanks to the New York convention, an arbitral award that a third country makes, can be enforced in the defendant's country.

In your case, the parties can sure, by mutual consent, choose Hongkong as their arbitration venue with a suitable forum entertaining the arbitraiton. However, it is not essential at all that the substantive law that shall apply to such arbitration shall be HK law. It can be law of any third country. If it is a contract for international sale of goods, then an international law can apply, i.e. CISG. However, in practice, you should never choose a forum of the other party. If the other party is so adament then you can choose a third neutral country as your venue and forum of arbitration where the procedural law governing the arbitration will be of that respective country and substantive law applicable to such arbitration shall be as the parties might agree to.

Should you have any more questions, kindly let me know.

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