In a recent judgment, the Karnataka High Court addressed a critical question in employment law: Can an exclusive jurisdiction clause in an employment contract override statutory territorial jurisdiction under Section 20 of the CPC?
The Court held that such clauses are valid and enforceable, provided the chosen forum is otherwise competent under the law. The case involved an employee who filed a suit in Bengaluru, claiming part of the cause of action arose there. However, the employment contract conferred exclusive jurisdiction on courts in another city.
Key principles laid down:
Party Autonomy: Contracting parties may choose one among multiple competent courts for dispute resolution.
Applicability to Employment Contracts: Jurisdiction clauses are not limited to commercial agreements; they extend to employment contracts, especially for managerial roles.
Hardship Not a Ground: Inconvenience or expense does not invalidate a jurisdiction clause unless it results in denial of justice.
Order 7 Rule 10 CPC: Courts must return plaints filed in a forum lacking jurisdiction without examining merits.
This ruling reinforces the importance of clear contractual drafting and affirms that employment agreements can include enforceable jurisdiction clauses.
