Arbitration and Conciliation Act, 1996: s.20 – Place of Arbitration – Whether conducting the arbitration proceedings at a new place, owing to the appointment of a new arbitrator, would shift the jurisdictional seat of arbitration – The place of conducting the arbitration proceedings were shifted from Panchkula to Delhi due to the change of arbitrator – Appellant argued that the substantive proceedings were held in Delhi because of which it would be the ‘seat of arbitration’ – Held: Sub-section (1) to s.20 gives primacy to the agreement of the parties by which they are entitled to fix and specify ‘the seat of arbitration’, which then, by operation of law, determines the jurisdictional court that will, in the said case, exercise territorial jurisdiction – Sub-section (2) comes into the picture only when the parties have not agreed on the place of arbitration as ‘the seat’ – In terms of sub-section (2) of s.20 the arbitral tribunal determines the place of arbitration – The arbitral tribunal, while doing so, can take into regard the circumstances of the case, including the convenience of the parties – Sub-section (3) of s.20 of the Act enables the arbitral tribunal, unless the parties have agreed to the contrary, to meet at any place to conduct hearing at a place of convenience in matters, such as consultation among its members, for the recording of witnesses, experts or hearing parties, inspection of documents, goods, or property – ‘The seat’ once fixed by the arbitral tribunal under s.20(2), should remain static and fixed – Venue is not constant and stationary and can move and change in terms of sub-section (3) to s.20 of the Act – Change of venue does not result in change or relocation of the ‘seat of arbitration’.
Arbitration and Conciliation Act, 1996: s.42 – Jurisdiction – Appellant relied on s.42 to contend that the seat of arbitration is in Delhi – Held: s.42 is of no avail as it does not help the case propounded by the appellant, as in the present case the arbitrator had fixed the jurisdictional ‘seat’ under s.20(2) of the Act before any party had moved the court under the Act, being a court where a part or whole of the cause of action had arisen. Dismissing the appeals, the Court
HELD: 1.1 ‘The seat’ once fixed by the arbitral tribunal under Section 20(2), should remain static and fixed, whereas the ‘venue’ of arbitration can change and move from ‘the seat’ to a new location. [Para 25][993-B-C]
1.2 Sub-section (3) of Section 20 specifically states and draws a distinction between the venue of arbitration and the ‘seat of arbitration’ by stating that for convenience and other reasons, the arbitration proceedings may be held at a place different than the ‘seat of arbitration’, which location is referred to the venue of arbitration. [Para 26][993-D-E]
1.3 The place or the venue fixed for arbitration proceedings, when sub-section (2) of Section 20 applies, will be the jurisdictional ‘seat’ and the courts having jurisdiction over the jurisdictional ‘seat’ would have exclusive jurisdiction. This principle would have exception that would apply when by mutual consent the parties agree that the jurisdictional ‘seat’ should be changed, and such consent must be express and clearly understood and agreed by the parties. [Para 28][994-F-G]
1.4 Before the application under Section 34 was filed by the Appellants, the jurisdictional ‘seat’ of arbitration had been determined and fixed Under Sub-section (2) to Section 20 and thereby, the courts having jurisdiction over Panchkula in Haryana, have exclusive jurisdiction. The courts in Delhi would not get jurisdiction as the jurisdictional ‘seat of arbitration is Panchkula and not Delhi. [Para 32][997-C]
State of West Bengal v. Associated Contractors (2015)
1 SCC 32 : [2014] 10 SCR 426; Bhartiya Aluminium Company v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552 BGS SGS Soma JV v. NHPC Limited (2020) 4 SCC 224 : [2019] 17 SCR 742 - relied on. Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and Ors. (2017) 7 SCC 678 : [2017] 4 SCR 744; Brahmani River Pellets Limited v. Kamachi Industries Limited (2020) 5 SCC 462 : [2019]
9 SCR 1140; Union of India v. Hardy Exploration and Production (India) Inc. (2019) 13 SCC 472 : [2018] 13 SCR 379; Shashoua v. Sharma (2009) EWHC 957
(Comm.) : [2017] 7 SCR 442; Inox Renewables Ltd. v. Jayesh Electricals Ltd. (2019) SCC OnLine SC 2036 : [2021] 7 SCALE 736 and Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd. 2007 EWCA Civ 1282 (CA) –
referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.