Seat of arbitration being overseas not a bar for a jurisdictional objection

Judge of the Commercial High Court of Colombo C. Morais, recently dismissed an action filed by Peter Nell, an agent recruiting Players for the SLPL Cricket Tournament against Somerset Entertainment Ventures (Singapore) Ltd., the organisers of SLPL, in view of the submissions made by Faiszer Musthapha P.C.

Peter Nell obtained at the first instance a sequestration order restricting commercial rights of Somerset which was also set aside.

President’s Counsel Faiszer Musthapha with Attorneys at Law Isuru Balapatabendi and Nayantha Wijesundara appeared for the defendants, Somerset Entertainment whilst President’s Counsel Ikram Mohammed and Attorney-at-Law Mangala Niyarepola appeared for the Plaintiff, Peter Nell.

Raising a preliminary objection to the plaint according to section five of the Arbitration Act of 1995, Musthapha submitted to court that in the present case the parties have agreed to refer all disputes to arbitration in Singapore, and hence the High Court of Colombo does not have any jurisdiction to adjudicate on the disputes arising out of the agreement between parties when the defendants object.

Musthapha told court that section 16(1) of the Arbitration Act gives parties to contract the freedom to select the seat of the arbitration and that it is on this basis that the plaintiff and defendants have selected Singapore as the place of arbitration. Therefore, once the place of arbitration has been agreed to by the parties, Sri Lankan courts have no jurisdiction to look into disputes arising out of the agreement when an objection is raised under section five.

Musthapha also submitted that the Sri Lankan Arbitration Act was based on the New York Convention on Arbitration and the Act was enacted mainly to allow for enforcement of foreign arbitration awards.