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Civil · Reportable judgment

M/s. Inox Renewables Ltd. vs Jayesh Electricals Ltd.

Court
Supreme Court of India
Date
13 April 2021
Case No.
Civil Appeal No. 1556 of 2021
Result
Disposed
Bench
R.F. Nariman, Hrishikesh Roy
Citation
[2021] 4 S.C.R. 376 : 2021 INSC 251
Supreme Court Reports [2021] 4 S.C.R. 376 : 2021 INSC 251
Headnote

Arbitration and Conciliation Act, 1996: ss. 20(1) and 34 – Venue/place of arbitration – Shifting of – Held: By mutual agreement, parties can shift the venue/place of arbitration – It cannot be said that the change could only be by a written agreement – On facts, by mutual agreement, parties specifically shifted the venue/place of arbitration from Jaipur to Ahmedabad – It is clear that the parties have, by mutual agreement, entered into an agreement to substitute the venue at Jaipur with Ahmedabad as the place/seat of arbitration u/s. 20(1) – Once the seat of arbitration is replaced by mutual agreement to be at Ahmedabad, the courts at Rajasthan no longer vested with jurisdiction as exclusive jurisdiction is now vested in the Courts at Ahmedabad, given the change in the seat of arbitration – Thus, the parties are now referred to the courts at Ahmedabad for the resolution of the petition u/s. 34.

Disposing of the appeal, the Court

HELD: 1.1 It is clear as per paragraph 12.3 that by mutual agreement, parties have specifically shifted the venue/place of arbitration from Jaipur to Ahmedabad. This being so, the submission that this could only have been done by written agreement and that the arbitrator’s finding would really have reference to a convenient venue and not the seat of arbitration cannot be accepted. [Para 11][381-F-G]

1.2 This case would show that the moment the seat is chosen as Ahmedabad, it is akin to an exclusive jurisdiction clause, thereby vesting the courts at Ahmedabad with exclusive jurisdiction to deal with the arbitration. It is clear that the parties have, by mutual agreement, entered into an agreement to substitute the venue at Jaipur with Ahmedabad as the place/seat of arbitration under Section 20(1) of the Arbitration and Conciliation Act, 1996. [Para 13][384-F-G; 385-A-B]

Read the full headnote (2 more paragraphs)

1.3 The venue being shifted from Jaipur to Ahmedabad is really a shifting of the venue/place of arbitration with reference to Section 20(1), and not with reference to Section 20(3) of the Arbitration and Conciliation Act, 1996, as it has been made clear that Jaipur does not continue to be the seat of arbitration and Ahmedabad is now the seat designated by the parties, and not a venue to hold meetings. The arbitrator has recorded that by mutual agreement, Jaipur as a venue has gone and has been replaced by Ahmedabad. As clause 8.5 of the Purchase Order must be read as a whole, it is not possible to accept the submission that the jurisdiction of Courts in Rajasthan is independent of the venue being at Jaipur. The two clauses must be read together as the Courts in Rajasthan have been vested with jurisdiction only because the seat of arbitration was to be at Jaipur. Once the seat of arbitration is replaced by mutual agreement to be at Ahmedabad, the Courts at Rajasthan are no longer vested with jurisdiction as exclusive jurisdiction is now vested in the Courts at Ahmedabad, given the change in the seat of arbitration.Thus, the impugned judgment cannot stand and is set aside. The parties are now referred to the courts at Ahmedabad for the resolution of the Section 34 petition. [Paras 17 and 18][386-E-H; 387-A] Videocon Industries Limited vs. Union of India & Anr. (2011) 6 SCC 161 : [2011] 8 SCR 569 – distinguished. BSG SGS SOMA JV vs. NHPC Limited (2020) 4 SCC

234 : [2019] 17 SCR 742; Indus Mobile Distribution Private Limited vs. Datawind Innovations Private Limited, (2017) 7 SCC 678 : [2017] 4 SCR 744; Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552 : [2012] 12 SCR 327 – 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.

Full Judgment Text

The Judgment of the Court was delivered by R. F. NARIMAN, J. 1. Leave granted. 2. The present appeal arises out of the impugned judgment dated 9 October, 2019 passed by the High Court of Gujarat at Ahmedabad in which Special Civil Application No. 9536 of 2019 filed by the appellant, Inox Renewables Ltd. [“Appellant”] against the order dated 25th April, 2019 passed by the Commercial Court, Ahmedabad was dismissed, holding that the courts at Jaipur, Rajasthan would be the courts in which the Section 34 petition could be filed. th 3. The facts of the case are as follows : A purchase order
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