Governing Law and Jurisdiction Clause: Meaning, Sample & Drafting Tips (India)
A governing law and jurisdiction clause states which country's law interprets the contract and which courts will hear disputes. In India, parties may confer exclusive jurisdiction on one of several courts that already have jurisdiction, but cannot create jurisdiction where none exists or oust all courts — a limit drawn from section 28 of the Indian Contract Act.
How it works under Indian law
Section 28 of the Indian Contract Act, 1872 makes void an agreement that absolutely restricts a party from enforcing its rights through the ordinary courts, with an exception for arbitration agreements. The Supreme Court has held that where two or more courts have jurisdiction under the Code of Civil Procedure, 1908 (section 20), the parties may agree that only one of them will hear disputes (ABC Laminart v A.P. Agencies, 1989; Swastik Gases v Indian Oil, 2013).
Parties cannot confer jurisdiction on a court that has none — the chosen court should have some connection with the contract, such as where it was made, performed or where the defendant resides or carries on business. Using words like "exclusive" or "only" removes doubt, although courts have read exclusivity into clauses even without those words.
For cross-border contracts, parties are generally free to choose a foreign governing law. A foreign court judgment is enforceable in India by execution only if it is from a "reciprocating territory" under section 44A of the Code of Civil Procedure; otherwise a fresh suit on the judgment is needed. This is a common reason to prefer arbitration in international contracts.
Drafting checklist
- Choose governing law expressly — do not leave it to implication.
- Pick a court that has jurisdiction under CPC section 20 (connection with the contract or the parties).
- Use "exclusive" if you intend one forum only.
- Make sure the clause is consistent with any arbitration clause (courts for supervision and interim relief only).
- For cross-border deals, check how a judgment from that forum would be enforced in each party's country.
Sample governing law and jurisdiction clause
Two versions: a standard position and an alternative you can offer in negotiation. Replace every [placeholder] before use.
Standard governing law and exclusive jurisdiction
Standard positionThis Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it shall be governed by and construed in accordance with the laws of India. Subject to Clause [Arbitration], the courts at [city], India shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement, and each Party irrevocably submits to the jurisdiction of those courts.
Balanced version (neutral courts plus interim relief anywhere)
Balanced — exclusive forum for the merits, flexibility for urgent reliefThis Agreement shall be governed by the laws of India. The courts at [neutral city with a connection to the contract] shall have exclusive jurisdiction over all disputes on the merits. Notwithstanding the foregoing, either Party may seek urgent interim or injunctive relief, or enforce a judgment or award, before any court of competent jurisdiction.
Who pushes for what
Typical negotiating positions on each side of the table.
Party drafting the contract
Wants its home city as the exclusive forum to reduce cost and travel.
Counterparty
Wants a neutral forum, or the right to sue where the defendant is located.
Common middle ground
Neutral connected forum for merits; interim relief available in any competent court.
Common mistakes
- Choosing a city with no connection to the contract or the parties.
- A jurisdiction clause and an arbitration clause that contradict each other.
- Choosing a foreign law between two Indian parties without understanding the consequences.
- Copying "non-exclusive jurisdiction" from a foreign template when an exclusive forum was intended.
Frequently asked questions
Can parties choose any court in India?
No. They can choose only among courts that would otherwise have jurisdiction — for example where the contract was made or performed, or where the defendant resides or carries on business. An agreement conferring jurisdiction on an unconnected court is not effective.
Is an exclusive jurisdiction clause hit by section 28?
Not where it selects one of several competent courts. Section 28 prohibits absolute restraints on legal proceedings; limiting the forum to one competent court has been upheld by the Supreme Court.
Do I need a jurisdiction clause if there is an arbitration clause?
It is still useful. The seat of arbitration fixes the supervisory courts, and a jurisdiction clause can confirm those courts and preserve interim relief.
Related tools, formats and guides
Build a clause library with approved fallbacks in CaseDocker
Store your approved clause language and pre-agreed fallback positions in CaseDocker's Contract Management module, and use Playbooks to route any deviation to the right approver before the contract goes out for signature.