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Exclusive jurisdiction clauses (EJC) are forum selection provisions by which parties agree that disputes arising from their contract are litigated only before the courts of a specified place. In cross-border contracts, EJCs reduce uncertainty and the risk of parallel proceedings in multiple forums. Courts in India generally respect EJCs, but enforce them only as provided by the Code of Civil Procedure, 1908 (CPC) and the Indian Contract Act, 1872.

A valid EJC channels disputes to their chosen forum. Its validity depends whether the parties’ intention to exclude other competent courts is sufficiently clear and whether the chosen court otherwise has jurisdiction under Indian law. Words such as exclusive, alone and only are usually sufficient, but courts in India also infer exclusivity when the clause is read in context.

Exclusive jurisdiction clauses under CPC

In contractual disputes, other than those relating to immovable property, section 20 of the CPC provides for actions to be brought in the place where the defendant resides or carries on business and where the cause of action arises, wholly or in part. In cross-border transactions, identifying where the cause of action arises requires precise analysis of where the contract is entered into, where payment is to be made, where obligations are to be performed and where the breach occurs. Because different parts of the cause of action may occur in several places, a number of courts may be competent.

An EJC is valid if it selects one of several courts that already have jurisdiction. Conversely, a clause that attempts to confer exclusive jurisdiction on a court that is not otherwise competent is void because parties cannot confer jurisdiction by contract.

Section 28 of the Contract Act nullifies agreements restraining enforcement of rights through legal proceedings or unfairly extinguishing remedies. EJCs are generally not affected by section 28 because they do not bar recourse to courts; they only identify the forum in which recourse must be pursued. However, if an EJC attempts to select a court without section 20 of the CPC jurisdiction, the clause will be void.

Supreme court rules on EJCs

Three landmark Supreme Court judgments lay down basic principles affecting EJCs. held that parties cannot confer jurisdiction by agreement, but may choose one of a number of competent courts. is authority for the doctrine that the agreement to exclude other competent courts must be clear and unambiguous. allows exclusion even if words such as only or exclusive are not used, provided that the clause as a whole shows the intent to prefer one forum to the exclusion of others.

More recently, Delhi High Court in , in relying on these three judgments, held that their principles applied to EJCs in cross-border contracts. The Supreme Court also confirmed its application of the three principles to cross-border disputes in .

Enforcing EJCs: Anti-suits, judgments

The real test of the validity of an EJC in cross-border disputes is whether it can prevent parallel foreign proceedings. Courts in India do grant anti-suit injunctions to restrain foreign proceedings brought in breach of an EJC, but only when the foreign action is vexatious or oppressive and contrary to the parties’ bargain. Modi Entertainment is the authority for this.

Forum selection should also take into account enforcement in India. If a foreign decree is to be enforced in India, the procedure depends on whether the country is a reciprocating territory notified by India. Decrees from reciprocating jurisdictions may generally be executed under section 44A of the CPC. For non-reciprocating territories, a separate civil action is necessary. This distinction often influences the choice of an exclusive forum, particularly where the counterparty’s assets are located in India.

EJCs are powerful tools in cross-border disputes, but their enforceability depends on compliance with section 20 of the CPC and section 28 of the Contract Act. Parties should evaluate their enforceability strategies, particularly the reciprocity status of foreign judgments. A precise EJC strengthens the case for anti-suit relief where appropriate.

Jyoti Sinha is a partner at Khaitan & Co