Arbitration & Compensation Claim of Employer – Resignation before stipulated period

Arbitration in Employment Agreement

The Appellant No.1 was appointed as Senior Engineer in the company of Respondent no.1 situated at Tiruvanantapuram, Kerala.   The agreement provided that the appellant no.1 shall work for a minimum period of 18 months and if he leaves the job before the said period, then compensatory cost is payable to the Company as stipulated in the said clause.   The appellant no.1 worked only for three months.  Moreover, the venue of arbitration was provided in Bengaluru to the exclusion of all other Courts.

 In the arbitral proceedings initiated by the respondent no.1, Award was passed directing the appellant no.1 to pay compensatory cost of Rs.3,00,000/- to the Company.

 Section 34 petition of the appellant no.1 was dismissed.

 In section 37 appeal, it was HELD that when the appellants on their own will have chosen the venue of the arbitration at Bengaluru then they could not resile from the said clause.  As per sections 2(1)(e) and 20 of the Arbitration Act, 1996, the parties are at liberty to agree on the place of arbitration.  When the appellant no.1 has willfully agreed, then it cannot be said that there was fraud, coercion, duress or undue influence while executing the agreement.

 Judgment dated 17.3.2025 of the High Court of Karnataka at Bengaluru in Misc. First Appeal No.4313 of 2016 (AA) of Vivek R Nair and another  Vs.   Tata ELXSI Limited and another