Delhi High Court
M/S. Bvg India Ltd vs Nagar Nigam Jaipur Greater & Anr on 9 July, 2025
Author: Jyoti Singh
Bench: Jyoti Singh
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 9th July, 2025
+ O.M.P.(MISC.)(COMM.) 191/2025 & I.A. 5294/2025
M/S. BVG INDIA LTD. .....Petitioner
Through: Mr. Akhil Sibal, Senior Advocate
with Mr. Sandeep S. Ladda, Mr. Soumik Ghosal,
Mr. Akshat Malpani and Ms. Jahnavi Sindhu,
Advocates.
versus
NAGAR NIGAM JAIPUR GREATER & ANR. .....Respondents
Through: Mr. Vigyan Shah, AAG with
Mr. Amit Agrawal, Mr. Rahul Kukreja, Ms. Sana
Jain, Mr. Sankalp Vijay, Mr. Saubendra Singh and
Mr. Anupam Agrawal, Advocates.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J.
1. This petition is filed on behalf of the Petitioner under Section 29A(4)
of the Arbitration and Conciliation Act, 1996 (‘1996 Act’) seeking extension
of the mandate of the learned Sole Arbitrator till 23.08.2026.
2. Petitioner is stated to be one of the largest integrated Facility
Management Services company in India and is inter alia engaged in
execution of several projects, such as, Electrification Projects, Emergency
Response Services and Facility Management Services. Respondents No.1
and 2 are incorporated under the Rajasthan Municipalities Act, 1959. Nagar
Nigam, Jaipur was the erstwhile Municipal Corporation, which by a
Notification dated 18.10.2019 was divided into Respondents No.1 and 2.
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3. Disputes arose between the parties under the terms of Agreement
dated 24.03.2017, originally executed between the Petitioner and Nagar
Nigam, Jaipur and continued by Respondents No.1 and 2, read with
Supplementary Agreement dated 20.04.2021, executed with Respondent
No.2 pertaining to ‘Door to Door Collection, Segregation, Secondary
Storage and Transportation of Waste (C&T)’, under the guidelines of
Swachh Bharat Mission for Nagar Nigam, Jaipur. Under the said
Agreements, Petitioner was required to undertake the task of primary and
secondary collection and transportation of Municipal Solid Waste from all
houses, institutions, offices and commercial establishments, roadside litter
bins/bins/open secondary collection points in the areas covered by the
Agreements and unload the same at the designated place at the waste
disposal site, on terms and conditions provided in the Agreements. Parties
agreed to refer the disputes to arbitration in terms of the arbitration clause
and Sole Arbitrator was appointed on 13.07.2022 under Section 11(6) of
1996 Act by the High Court of Rajasthan in AA No.110/2021.
4. It is averred in the petition that on 15.09.2023 pleadings were
completed before the learned Arbitrator and when the proceedings were at
the stage of cross-examination of Claimant’s witness No.2, by consent of the
parties, mandate of the Arbitrator was extended by six months upto
13.03.2025. On 16.12.2024, learned Arbitrator convened a hearing for
scheduling further dates for cross-examination, considering the technical and
voluminous nature of the matter and the fact that the cross-examination was
taking considerable time. When this petition was filed in February, 2025, the
proceedings were at the stage of cross-examination of Respondents’ witness
No.2 and seven witnesses were remaining to be cross-examined by the
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Petitioner. Since the mandate of the learned Arbitrator was expiring on
13.03.2025, Petitioner filed the present petition for extension of the
mandate, to enable the Arbitrator to conclude the proceedings and pass the
arbitral award.
5. Reply was filed on behalf of the Respondents taking a preliminary
objection to the maintainability of this petition on the ground that this Court
lacks the territorial jurisdiction to entertain the petition. Learned AAG for
the Respondents argued as follows:-
(A). Agreement dated 24.03.2017 executed between the parties
incorporates Clause 7.3 whereby parties agreed to confer exclusive
jurisdiction over all matters arising out of or relating to the Agreement
on the Courts at Jaipur. This Clause operates as an exclusive
jurisdiction clause and parties were ad idem that only the Courts at
Jaipur will have jurisdiction to adjudicate the disputes restricted not
only to proceedings being subject matter of the suit but also arbitral
proceedings. The arbitration clause is silent on seat, place or venue of
arbitration and thus there is no contrary indicia to the general
exclusive jurisdiction clause in the Agreement. By invoking the
jurisdiction of this Court, Petitioner is attempting to re-write the terms
of the Agreement and the arbitration clause, which is impermissible.
(B). It is trite that where there is a designated seat of arbitration,
Courts having territorial jurisdiction over the seat alone will have
jurisdiction to deal with all matters relating to arbitral proceedings but
when no seat is designated and only venue or a place of arbitration is
mentioned in the arbitration clause, in the absence of a contrary
indicia, the venue or the place will be the juridical seat and in suchO.M.P.(MISC.)(COMM.) 191/2025 Page 3 of 37
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situations, the exclusive jurisdiction clause may be irrelevant, but
where the parties have consciously incorporated an exclusive
jurisdiction clause in the contract excluding jurisdiction of all other
Courts, save and except, the Court specified in the contract and there
is no mention of seat, place or venue in the arbitration clause, the
former shall hold the field. Reliance was placed on the judgments of
the Supreme Court in B.E. Simoese Von Staraburg Niedenthal and
Another v. Chhattisgarh Investment Limited, (2015) 12 SCC 225;
and Emkay Global Financial Services Limited v. Girdhar Sondhi,
(2018) 9 SCC 49.
(C). Parties consciously agreed that the Courts at Jaipur will have
jurisdiction in respect of all disputes arising from the agreement and
this was after due deliberation of all the extenuating factors i.e. tender
was issued in Jaipur; purchase orders were issued from Jaipur office;
agreements were executed at Jaipur; and the entire work under the
agreement was supervised and controlled from the registered office of
the Respondents situated in Jaipur. Moreover, the disputes referred for
arbitration also stem from the decisions and actions of the
Respondents taken in Jaipur. No part of cause of action has admittedly
arisen in Delhi. Therefore, in the absence of designation of seat/place/
venue by the parties, provisions of Sections 16 to 20 CPC would be
attracted and Jaipur being the place where the entire cause of action
has arisen, this Court will have no jurisdiction to entertain the present
petition. Reliance was placed on the judgments in Swastik Gases
Private Limited v. Indian Oil Corporation Limited, (2013) 9 SCC 32;
Rajasthan State Electricity Board v. Universal Petrol Chemicals
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Ltd., (2009) 3 SCC 107; BGS SGS SOMA JV v. NHPC Limited,
(2020) 4 SCC 234; Zhejiang Bonly Elevator Guide Rail
Manufacture Co. Ltd. v. Jade Elevator Components and Others,
2025 SCC OnLine Del 1407; Kings Chariot Through its Sole
Proprietor Mrs. Neelima Suri v. Tarun Wadhwa, 2024 SCC OnLine
Del 4039; and Faith Constructions v. N.W.G.E.L Church, 2025 SCC
OnLine Del 1746.
(D). It is trite that Courts must enforce and give effect to the ‘intent
of the parties’, reflected from the contractual clauses. By
incorporating Clause 7.3 in the Agreement, parties clearly intended
that the exclusive jurisdiction clause must be enforced and thus
entertaining this petition for extension of mandate of the Arbitrator,
will be in the teeth of the agreement between and intent of the parties.
[Ref.: Enercon (India) Limited and Others v. Enercon Gmbh and
Another, (2014) 5 SCC 1; Harmony Innovation Shipping Limited v.
Gupta Coal India Limited and Another, (2015) 9 SCC 172; Eitzen
Bulk A/S v. Ashapura Minechem Limited and Another, (2016) 11
SCC 508; and Roger Shashoua and Others v. Mukesh Sharma and
Others, (2017) 14 SCC 722.]
(E). Before filing the present petition, Petitioner had approached
the Rajasthan High Court under Section 11(6) of 1996 Act for
appointment of the Arbitrator, correctly understanding the import of
the exclusive jurisdiction Clause 7.3 and rightly submitting to the
jurisdiction of the said Court. Therefore, by virtue of Section 42 of
1996 Act, the arbitration was anchored therein and any further
proceedings pertaining to the present arbitration can only be filed
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before the Rajasthan High Court. No subsequent circumstance has
either arisen or is pleaded by the Petitioner to take away the
jurisdiction of the Courts at Jaipur. [Ref.: Ravi Ranjan Developers
Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 SCC OnLine SC 568].
(F). Petitioner has essentially filed this petition predicating its case
on Procedural Order No.14 dated 19.04.2024, wherein the Arbitrator
observed that there was no agreement between the parties designating
the seat of the present arbitration and both counsels agreed as of now
that the venue of arbitration for the purpose of cross-examination of
the witnesses be kept at Delhi. In the said order, the Arbitrator has
also recorded the consent of the parties that the Arbitrator may join
the proceedings virtually but the witnesses, Advocates and
representatives of the parties shall be available in Delhi, at the venue
arranged by the Claimant. Placing reliance on this order for conferring
jurisdiction on this Court is legally flawed. As the order would
indicate, holding proceedings at Delhi for cross-examining the
witnesses was a temporary measure and cannot be construed as a
consent of the parties agreeing to the seat, place or venue being Delhi.
In BGS SGS SOMA JV (supra), the Supreme Court held that
whenever there is designation of a place of arbitration in an arbitration
clause as being the venue of the arbitration proceedings, venue is
really the ‘seat’, as the expression does not include just one or more
individual or particular hearing, but the arbitration proceedings as a
whole, including the making of the award at that place. This language
has to be contrasted with language such as ‘Tribunals are to meet or
have witnesses, experts or the parties’, where only hearings are to
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take place in the ‘venue’, which may lead to the conclusion that other
things being equal, the venue so stated is not the ‘seat’ of arbitral
proceedings, but only a convenient place of meeting. Therefore,
merely because the Arbitrator decided to hold proceedings at Delhi,
limited to cross-examination of witnesses on certain dates, this can
neither be regarded as an agreement of parties under Section 20(1) of
1996 Act nor determination by the Arbitral Tribunal under Section
20(2) of 1996 Act.
(G). Further, in BBR (India) Private Limited v. S.P. Singla
Constructions Private Limited, (2023) 1 SCC 693, the Supreme
Court held that exercise of supervisory jurisdiction by the Courts
where arbitration proceedings are being conducted is a relevant
consideration, but not a conclusive and determinative factor when the
venue is not the seat. There would be situations where venue of the
arbitration in terms of Section 20(3) of 1996 Act would be different
from the jurisdictional seat and it is equally possible that majority or
most of the hearings may have taken place at a different venue but the
seat will determine the jurisdiction. It was also observed that aspect of
certainty as to Court’s jurisdiction must be given and accorded
priority over the contention that supervisory Courts located at the
place akin to the venue, where arbitration proceedings were conducted
or substantially conducted, should be preferred.
6. Mr. Akhil Sibal, learned Senior counsel appearing on behalf of the
Petitioner canvassed the following arguments:-
(A). There is no merit in the preliminary objection that this Court
has no territorial jurisdiction to entertain this petition. It is true that theO.M.P.(MISC.)(COMM.) 191/2025 Page 7 of 37
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agreement executed between the parties contains Clause 7.3 which
stipulates that Courts at Jaipur shall have jurisdiction over all matters
arising out of and/or relating to the Agreement. However, this is only
a general jurisdiction clause not pertaining to arbitral disputes and
does not indicate any agreement between the parties as to the seat of
arbitration. ‘Procedure for Disputes & Arbitration’ is separately
provided in Clause 73 of the Agreement and therefore, Clause 7.3 can
have no relevance in determining the Court having jurisdiction to
decide the questions forming subject matter of arbitration under
Section 2(1)(e) of 1996 Act. Therefore, Clause 7.3 cannot be invoked
by the Respondents to question the jurisdiction of this Court in light
of the judgments in Yassh Deep Builders Llp v. Sushil Kumar Singh
and Another, (2024) 2 HCC (Del) 99; Reliance Infrastructure
Limited v. Madhyanchal Vidyut Vitran Nigam Limited, 2023 SCC
OnLine Del 4894; Kings Chariot (supra); Cinepolis India Pvt. Ltd.
v. Celebration City Projects Pvt. Ltd. and Another, 2020 SCC
OnLine Del 301; and Precitech Enclosures Systems Private Limited
v. Rudrapur Precision Industries and Another, 2025 SCC OnLine
Del 1609.
(B). Seat/place of arbitration is fixed either under Section 20(1) or
20(2) of 1996 Act, as contrasted with Section 20(3), which is an
enabling provision allowing the Arbitral Tribunal to conduct sittings
at its convenience at any venue other than the seat. [Ref.: BGS SGS
SOMA JV (supra) and BBR (India) (supra)]. In the instant case,
admittedly, parties did not designate any seat or place in terms of
Section 20(1) of 1996 Act, which fact also finds mention in the
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Procedural Order No.14 dated 19.04.2024. In the absence of any
agreement under Section 20(1), the place where the Arbitral Tribunal
holds the arbitral proceedings would by default be the venue of
arbitration and consequently, the juridical seat, as held by the
Supreme Court in BBR (India) (supra). Indisputably, with the
consent of the parties, witnesses were directed to remain present in
Delhi for cross-examination by the Arbitrator and therefore, in the
absence of an agreement under Section 20(1), the arbitral proceedings
will be subject to jurisdiction of this Court as it is the most likely to be
connected Court with the arbitral proceedings. This is significant in
light of the fact that not only the procedural orders/communication of
the Arbitrator indicates that the Arbitrator resides at Delhi and is
holding proceedings from Delhi but also the fact that all pleadings,
applications and documents are required to be filed in hardcopies at
the Arbitrator’s address at Delhi.
(C). It is trite that Section 2(1)(e) of 1996 Act has to be construed
keeping in view the provisions of Section 20 of 1996 Act, which gives
recognition to party autonomy. In Indus Mobile Distribution Private
Limited v. Datawind Innovations Private Limited and Others, (2017)
7 SCC 678, it was held by the Supreme Court that Legislature has
intentionally given jurisdiction to two Courts i.e. the Court which
would have jurisdiction where cause of action is located and Courts
where the arbitration takes place. This was necessary, as on many
occasions, the agreement may provide for a seat of arbitration at a
place which would be neutral to both the parties. Therefore, Courts
where the arbitration takes place would be required to exercise
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supervisory control over the arbitral process and this would be
irrespective of the fact that the obligations to be performed under the
contract were to be performed at another place. There is no
Agreement between the parties under Section 20(1) designating
seat/place/venue of arbitration and therefore, once the Arbitrator has
fixed the place of arbitration under Section 20(2), by a conjoint
reading of Sections 20(2) and 2(1)(e), this Court within whose
jurisdiction arbitral proceedings are being conducted will have
jurisdiction, in light of observations of the Supreme Court in Indus
Mobile (supra). Significantly, Respondents do not canvass any place
of arbitration under Section 20(2), other than Delhi.
(D). Stand of the Respondents that Courts at Jaipur will have
exclusive jurisdiction to entertain petitions pertaining to the present
arbitration including petition under Section 29A(4) and (5) of 1996
Act, basis Section 42 thereof, is wholly misconceived. This argument
is predicated on a petition filed by the Petitioner under Section 11(6)
of 1996 Act before the High Court of Rajasthan. Significantly, these
proceedings were prior to the constitution of the Arbitral Tribunal, at
which stage no seat can be designated in terms of Section 20(1) and
thus there could be no determination by the Arbitral Tribunal under
Section 20(2), as the same was yet to be constituted at that stage. It is
only post the proceedings before the Rajasthan High Court and post
the constitution of the Arbitral Tribunal that place of arbitration has
crystalized under Section 20(2). While Section 42 would have
application prior to any determination of seat/place either under
Section 20(1) or 20(2), upon such determination, Section 42 would
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have to yield to Section 20 and any contrary interpretation would
negate and nullify the determination of seat/place under Section 20(2),
as held in BGS SGS SOMA JV (supra). While the interpretation
placed by the Petitioner will give effect to both Section 42 and
Section 20 and harmonize the two provisions, the interpretation
sought to be canvassed by the Respondents would lead to a precarious
position in law where notwithstanding determination of seat/place
under Section 20(2), by mere application of Section 42 exclusive
jurisdiction will not vest in the Courts within whose jurisdiction the
seat of arbitration is located.
7. Heard learned Senior counsel for the Petitioner and learned AAG for
the Respondents.
8. The short issue that arises for consideration before the Court is
whether this Court has territorial jurisdiction to entertain the present petition
and before proceeding to decide this issue, it would be relevant to have a
close look at the Clauses in the Agreement, which are extracted hereunder,
for the ease of reference:-
“7.3 The language of this Contract Document is English and the law,
which applies to this Contract, shall be the Law of the Republic of India.
The Courts at Jaipur shall have jurisdiction all over matters, arising out of
relating to Agreement under this Contract.”
xxx xxx xxx
“73.0 Procedure for Disputes & Arbitration
73.1 Competent Authority’s Decision
If a dispute(s) of any kind whatsoever arises between the Contractor and
the Competent Authority’s Representative, the same shall be referred to
the Competent Authority for his decision with detailed justification. Such
reference shall be stated that it is in pursuance to this clause and is for
reviewing and giving decisions by the Competent Authority. The
Competent Authority shall give its decision within fifteen (15) days ofO.M.P.(MISC.)(COMM.) 191/2025 Page 11 of 37
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receipt of notice. If Contractor is not satisfied with the decision of the
Competent Authority or the Competent Authority fails to give the decision
within the period of fifteen (15) days from the date of receipt of notice
under this clause, such a dispute may be referred to arbitration as per
Arbitration and Conciliation Act, 1996.
73.2 Sole Arbitration
Except where, otherwise provided for in this Contract, all questions and
disputes relating to the meaning of instruction hear in before mentioned or
as to any other question, claim, right, matter of handing whatsoever, if any
arising out of relating to this, specification, estimates, instructions, orders
or these conditions or otherwise concerning the operations, or the
execution or failure to execute the same where arising during the progress
of the operations or after completion or abandonment thereof of any
matter directly or indirectly connected with this Contract shall be referred
to the sole arbitration of the Commissioner, Nagar Nigam Jaipur and if
the Municipal Commissioner is unable or unwilling to act as such, then the
matter in dispute shall be referred to sole arbitration or such other person
appointed by the Commissioner, Nagar Nigam Jaipur, Jaipur who is
willing to act as such Arbitrator. In case, the Arbitrator so appointed is
unable to act for any reasons, the Commissioner, Nagar Nigam Jaipur,
Jaipur in the event of such inability, shall appoint another person to act as
Arbitrator in accordance with the terms of the Contract. Such person shall
be entitled to proceed with the reference from the point at which its
predecessors left it. It is also a term of this Contract that no Person other
than a person appointed by the Nagar Nigam Jaipur as aforesaid should
act as an Arbitrator.”
9. It is evident that Clause 73 pertaining to ‘Procedure for Disputes &
Arbitration’ does not designate either the seat or place or venue of
arbitration. Clause 7.3, on the other hand, confers exclusive jurisdiction on
the Courts at Jaipur over all matters, arising out of or in relation to the
Agreement dated 24.03.2017. Petitioner contends that in the absence of any
agreement with respect to seat, place or venue between the parties under
Section 20(1) of 1996 Act, in light of procedural order of the Arbitrator
recording the consent of the parties to cross-examine the witnesses at Delhi,
by default Delhi becomes the venue of the arbitration and consequently the
seat and thus as per settled law, this Court, where the seat is located, will
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have exclusive jurisdiction. Pithily put, the argument is that Section 2(1)(e)
of 1996 Act will have to be read in light of Section 20 as held by the
Supreme Court in Indus Mobile (supra). Respondents, on the other hand,
contend that the arbitration clause does not designate seat/place/venue and
therefore, the exclusive jurisdiction clause will hold the field and Courts at
Jaipur alone will have jurisdiction. It is also urged that the entire cause of
action, if any, has arisen within the territorial limits of the Courts at Jaipur
and applying the principles of Sections 16 to 20 CPC, which come into play
in the present case, no part of cause of action having arisen in Delhi, this
Court lacks the territorial jurisdiction to extend the mandate of the learned
Arbitrator. Rival contentions of the parties essentially revolve around the
following provisions of the 1996 Act:-
“2. Definitions.–(1) In this Part, unless the context otherwise requires,–
xxx xxx xxx
[(e) “Court” means– (i) in the case of an arbitration other than
international commercial arbitration, the principal Civil Court of original
jurisdiction in a district, and includes the High Court in exercise of its
ordinary original civil jurisdiction, having jurisdiction to decide the
questions forming the subject-matter of the arbitration if the same had
been the subject-matter of a suit, but does not include any Civil Court of a
grade inferior to such principal Civil Court, or any Court of Small
Causes;
(ii) in the case of international commercial arbitration, the High Court in
exercise of its ordinary original civil jurisdiction, having jurisdiction to
decide the questions forming the subject-matter of the arbitration if the
same had been the subject-matter of a suit, and in other cases, a High
Court having jurisdiction to hear appeals from decrees of courts
subordinate to that High Court;]
xxx xxx xxx
20. Place of arbitration.–(1) The parties are free to agree on the place of
arbitration.
(2) Failing any agreement referred to in sub-section (1), the place of
arbitration shall be determined by the arbitral tribunal having regard toO.M.P.(MISC.)(COMM.) 191/2025 Page 13 of 37
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the circumstances of the case, including the convenience of the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral
tribunal may, unless otherwise agreed by the parties, meet at any place it
considers appropriate for consultation among its members, for hearing
witnesses, experts or the parties, or for inspection of documents, goods or
other property.
xxx xxx xxx
42. Jurisdiction.–Notwithstanding anything contained elsewhere in this
Part or in any other law for the time being in force, where with respect to
an arbitration agreement any application under this Part has been made
in a Court, that Court alone shall have jurisdiction over the arbitral
proceedings and all subsequent applications arising out of that agreement
and the arbitral proceedings shall be made in that Court and in no other
Court.”
10. Coming to the law laid down by the Supreme Court having bearing on
the issues raised by the parties, I may first allude to the judgment in Indus
Mobile (supra), where the Supreme Court examined the interplay between
Section 2(1)(e) and Section 20 of 1996 Act as also referred to the Law
Commission’s Report, 2014 and held that the moment a seat is designated, it
is akin to exclusive jurisdiction clause. It was also held that under the
Arbitration Law, unlike CPC which applies to suits, reference to a seat is a
concept by which parties choose a neutral venue, which may not in the
classic sense be a place where cause of action, in whole or part, may have
arisen attracting provisions of Sections 16 to 20 CPC. The term ‘subject
matter’ in Section 2(1)(e) has a connection with the process of dispute
resolution and the purpose is to identify the Courts having supervisory
control over arbitration proceedings and hence, it refers to a Court which
would essentially be a Court of the seat of the arbitration process. Section
2(1)(e) of 1996 Act has to be construed keeping in view provisions of
Section 20 thereof, which gives recognition to party autonomy. Legislature
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intended giving jurisdiction to two Courts, one which has jurisdiction where
cause of action is located and second where arbitration takes place.
11. It was further held that under Section 20(1) of 1996 Act, parties are
free to agree to any seat or place within India but in the absence of any such
agreement, Section 20(2) authorizes the Arbitral Tribunal to determine the
place/seat of such arbitration. Section 20(3) enables the Arbitral Tribunal to
meet at any place for conducting hearings at a place of convenience in
matters such as consultations amongst its members, for hearing witnesses,
experts etc. Relevant passages from the judgment are as follows:-
“9. The concept of juridical seat has been evolved by the courts in
England and has now been firmly embedded in our jurisprudence. Thus,
the Constitution Bench in BALCO v. Kaiser Aluminium Technical Services
Inc. has adverted to “seat” in some detail. Paragraph 96 is instructive and
states as under:-
“96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under:
“2. Definitions.–(1) In this Part, unless the context otherwise
requires–
(a)-(d) *
(e) ‘Court’ means the Principal Civil Court of Original Jurisdiction in
a district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction to decide the questions
forming the subject-matter of the arbitration if the same had been the
subject-matter of a suit, but does not include any civil court of a grade
inferior to such Principal Civil Court, or any Court of Small Causes;”
We are of the opinion, the term “subject-matter of the arbitration” cannot
be confused with “subject-matter of the suit”. The term “subject-matter”
in Section 2(1)(e) is confined to Part I. It has a reference and connection
with the process of dispute resolution. Its purpose is to identify the courts
having supervisory control over the arbitration proceedings. Hence, it
refers to a court which would essentially be a court of the seat of the
arbitration process. In our opinion, the provision in Section 2(1)(e) has to
be construed keeping in view the provisions in Section 20 which give
recognition to party autonomy. Accepting the narrow construction as
projected by the learned counsel for the appellants would, in fact,
render Section 20 nugatory. In our view, the legislature has intentionally
given jurisdiction to two courts i.e. the court which would haveO.M.P.(MISC.)(COMM.) 191/2025 Page 15 of 37
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jurisdiction where the cause of action is located and the courts where the
arbitration takes place. This was necessary as on many occasions the
agreement may provide for a seat of arbitration at a place which would be
neutral to both the parties. Therefore, the courts where the arbitration
takes place would be required to exercise supervisory control over the
arbitral process. For example, if the arbitration is held in Delhi, where
neither of the parties are from Delhi, (Delhi having been chosen as a
neutral place as between a party from Mumbai and the other from
Kolkata) and the tribunal sitting in Delhi passes an interim order
under Section 17 of the Arbitration Act, 1996, the appeal against such an
interim order under Section 37 must lie to the courts of Delhi being the
courts having supervisory jurisdiction over the arbitration proceedings
and the tribunal. This would be irrespective of the fact that the obligations
to be performed under the contract were to be performed either at Mumbai
or at Kolkata, and only arbitration is to take place in Delhi. In such
circumstances, both the courts would have jurisdiction i.e. the court within
whose jurisdiction the subject-matter of the suit is situated and the courts
within the jurisdiction of which the dispute resolution i.e. arbitration is
located.”
[emphasis in original]
xxxx xxxx xxxx
11. In an instructive passage, this Court stated that an agreement as to the
seat of an arbitration is analogous to an exclusive jurisdiction clause as
follows:
(Bharat Aluminium case, SCC p. 621, para 123)
“123. Thus, it is clear that the regulation of conduct of arbitration
and challenge to an award would have to be done by the courts of the
country in which the arbitration is being conducted. Such a court is
then the supervisory court possessed of the power to annul the award.
This is in keeping with the scheme of the international instruments,
such as the Geneva Convention and the New York Convention as well
as the UNCITRAL Model Law. It also recognises the territorial
principle which gives effect to the sovereign right of a country to
regulate, through its national courts, an adjudicatory duty being
performed in its own country. By way of a comparative example, we
may reiterate the observations made by the Court of Appeal, England
in C v. D wherein it is observed that: (Bus LR p. 851G, para 17)
’17. It follows from this that a choice of seat for the arbitration
must be a choice of forum for remedies seeking to attack the
award.’
In the aforesaid case, the Court of Appeal had approved the
observations made in A v. B wherein it is observed that:
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‘… an agreement as to the seat of an arbitration is analogous to an
exclusive jurisdiction clause. Any claim for a remedy … as to the
validity of an existing interim or final award is agreed to be made
only in the courts of the place designated as the seat of
arbitration.”
(emphasis supplied)
xxxx xxxx xxxx
13. This Court reiterated that once the seat of arbitration has been fixed, it
would be in the nature of an exclusive jurisdiction clause as to the courts
which exercise supervisory powers over the arbitration. (See para 138.)
xxxx xxxx xxxx
18. The amended Act, does not, however, contain the aforesaid
amendments, presumably because the BALCO judgment in no uncertain
terms has referred to “place” as “juridical seat” for the purpose
of Section 2(2) of the Act. It further made it clear that Section 20(1) and 20
(2) where the word “place” is used, refers to “juridical seat”, whereas
in Section 20 (3), the word “place” is equivalent to “venue”. This being
the settled law, it was found unnecessary to expressly incorporate what the
Constitution Bench of the Supreme Court has already done by way of
construction of the Act.
19. A conspectus of all the aforesaid provisions shows that the moment the
seat is designated, it is akin to an exclusive jurisdiction clause. On the
facts of the present case, it is clear that the seat of arbitration is Mumbai
and Clause 19 further makes it clear that jurisdiction exclusively vests in
the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil
Procedure which applies to suits filed in courts, a reference to “seat” is a
concept by which a neutral venue can be chosen by the parties to an
arbitration clause. The neutral venue may not in the classical sense have
jurisdiction – that is, no part of the cause of action may have arisen at the
neutral venue and neither would any of the provisions of Section
16 to 21 of the CPC be attracted. In arbitration law however, as has been
held above, the moment “seat” is determined, the fact that the seat is at
Mumbai would vest Mumbai courts with exclusive jurisdiction for
purposes of regulating arbitral proceedings arising out of the agreement
between the parties.”
12. Significantly, in the same judgment, it was also held that where more
than one Court has jurisdiction, it is open for the parties to exclude all other
Courts and in this context, reference was made to the judgments of the
Supreme Court in Swastik Gases Private Limited (supra) and B.E. Simoese
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Von Staraburg Niedenthal (supra). Relevant paragraph is as follows:-
“20. It is well settled that where more than one court has jurisdiction, it is
open for parties to exclude all other courts. For an exhaustive analysis of
the case law, see Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd.. This
was followed in a recent judgment in B.E. Simoese Von Staraburg
Niedenthal v. Chhattisgarh Investment Ltd. Having regard to the above, it
is clear that Mumbai courts alone have jurisdiction to the exclusion of all
other courts in the country, as the juridical seat of arbitration is at
Mumbai. This being the case, the impugned judgment is set aside. The
injunction confirmed by the impugned judgment will continue for a period
of four weeks from the date of pronouncement of this judgment, so that the
respondents may take necessary steps under Section 9 in the Mumbai
Court. The appeals are disposed of accordingly.”
13. In BGS SGS SOMA JV (supra), the Dispute Resolution Clause
provided that the arbitration proceeding shall be held at New Delhi/
Faridabad and the Supreme Court after a detailed analysis of the provisions
of 1996 Act and the earlier judgments of the Supreme Court held that both
parties had chosen New Delhi as the seat of arbitration under Section 20(1)
and therefore, the Courts at New Delhi alone would have exclusive
jurisdiction over the arbitral proceedings and the fact that part of cause of
action may have arisen at Faridabad would be irrelevant. The Supreme
Court while examining the issue once again looked at the interplay between
Section 2(1)(e) and Section 20 as also the concept of seat/place/venue under
the Arbitration regime. Some of the significant observations in this regard
by the Supreme Court can be summarised as follows:-
(a) Once the seat of arbitration is designated or determined, the
same operates as an exclusive jurisdiction clause as a result of which
only the Courts where the seat is located would have jurisdiction over
the arbitration, to the exclusion of all other Courts, even Courts where
part of cause of action may have arisen;
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(b) Where it is found on facts of a particular case that either no seat
is designated in the arbitration agreement or has been determined by
the Arbitral Tribunal or the so called seat is only a convenient venue,
then there may be several Courts where part of cause of action arises,
that may have jurisdiction over the arbitration;
(c) Wherever there is an express designation of a venue and no
designation of an alternative place as seat and the same is combined
with a supranational body of rules governing the arbitration and there
are no significant contrary indicia, the stated venue is actually the
juridical seat of the arbitral proceedings, to the exclusion of all other
Courts, even Courts where part of cause of action may have arisen;
(d) Whenever there is designation of a place of arbitration in an
arbitration clause as being the venue of the arbitration proceedings,
the expression ‘arbitration proceedings’ would make it clear that the
venue is the seat, as the expression does not include just one or more
individual or particular hearing, but the arbitration proceedings as a
whole, including the making of an award at that place. This language
has to be contrasted with language such as ‘Tribunals are to meet or
have witnesses, experts or the parties’, where only hearings are to
take place in the venue, which may lead to the conclusion, other
things being equal, that the venue so stated is not the seat of arbitral
proceedings, but only a convenient place of meeting. Further, the fact
that the arbitral proceedings ‘shall be held’ at a particular venue also
indicates that the parties intended to anchor arbitral proceedings to a
particular place signifying thereby, that the said place is the seat of the
arbitral proceedings. This, coupled with there being no otherO.M.P.(MISC.)(COMM.) 191/2025 Page 19 of 37
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significant contrary indicia that the stated venue is merely a venue and
not the seat, would then conclusively show that such a clause
designates a seat. Relevant passages from the judgment are as
follows:-
“46. This Court in Indus Mobile Distribution (P) Ltd., after referring
to Sections 2(1)(e) and 20 of the Arbitration Act, 1996, and various
judgments distinguishing between the “seat” of an arbitral proceeding
and “venue” of such proceeding, referred to the Law Commission
Report, 2014 and the recommendations made therein as follows: (SCC
pp. 692-93, paras 17-20)
“17. In amendments to be made to the Act, the Law Commission
recommended the following:
‘Amendment of Section 20
12. In Section 20, delete the word “place” and add the words
“seat and venue” before the words “of arbitration”.
(i) In sub-section (1), after the words “agree on the” delete the
word “place” and add words “seat and venue”.
(ii) In sub-section (3), after the words “meet at any” delete the
word “place” and add word “venue”. [Note.-The departure from
the existing phrase “place” of arbitration is proposed to make
the wording of the Act consistent with the international usage of
the concept of a “seat” of arbitration, to denote the legal home
of the arbitration. The amendment further legislatively
distinguishes between the “[legal] seat” from a “[mere] venue”
of arbitration.]
* * *
Amendment of Section 31
17. In Section 31
(i) In sub-section (4), after the words “its date and the” delete
the word “place” and add the word “seat”.’
18. The amended Act, does not, however, contain the aforesaid
amendments, presumably because the BALCO judgment in no
uncertain terms has referred to “place” as “juridical seat” for the
purpose of b Section 2(2) of the Act. It further made it clear that
Sections 20(1) and 20(2) where the word “place” is used, refers to
“juridical seat”, whereas in Section 20(3), the word “place” is
equivalent to “venue”. This being the settled law, it was foundO.M.P.(MISC.)(COMM.) 191/2025 Page 20 of 37
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unnecessary to expressly incorporate what the Constitution Bench
of the Supreme Court has already done by way of construction of
the Act.
19. A conspectus of all the aforesaid provisions shows that the
moment the seat is designated, it is akin to an exclusive jurisdiction
clause. On the facts of the present case, it is clear that the seat of
arbitration is Mumbai and Clause 19 further makes it clear that
jurisdiction exclusively vests in the Mumbai courts. Under the law
of arbitration, unlike the Code of Civil Procedure which applies to
suits filed in courts, a reference to “seat” is a concept by which a
neutral venue can be chosen by the parties to an arbitration clause.
The neutral venue may not in the classical sense have jurisdiction –
that is, no part of the cause of action may have arisen at the neutral
venue and neither would any of the provisions of Sections 16 to 21
of the Code of Civil Procedure be attracted. In arbitration law
however, as has been held above, the moment “seat” is determined,
the fact that the seat is at Mumbai would vest Mumbai courts with
exclusive jurisdiction for purposes of regulating arbitral
proceedings arising out of the agreement between the parties.
20. It is well settled that where more than one court has
jurisdiction, it is open for the parties to exclude all other courts.
For an exhaustive analysis of the case law, see Swastik Gases (P)
Ltd. v. Indian Oil Corpn. Ltd. This was followed in a recent
judgment in B.E. Simoese Von Staraburg Niedenthal v.
Chhattisgarh Investment Ltd.. Having regard to the above, it is
clear that Mumbai courts alone have jurisdiction to the exclusion
of all other courts in the country, as the juridical seat of arbitration
is at Mumbai. This being the case, the impugned judgment is set
aside. The injunction confirmed by the impugned judgment will
continue for a period of four weeks from the date of pronouncement
of this judgment, so that the respondents may take necessary steps
under Section 9 in the Mumbai Court. Appeals are disposed of
accordingly.”
This judgment has recently been followed in Brahmani River Pellets
Ltd. v. Kamachi Industries Ltd.
xxxx xxxx xxxx
51. The Court in Enercon then concluded: (SCC p. 60, para 138)
“138. Once the seat of arbitration has been fixed in India, it would
be in the nature of exclusive jurisdiction to exercise the supervisory
powers over the arbitration.”
(emphasis in original)
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52. In Reliance Industries Ltd., this Court held: (SCC pp. 627, 630-31,
paras 45, 55-56)
“45. In our opinion, it is too late in the day to contend that the seat
of arbitration is not analogous to an exclusive jurisdiction clause.
This view of ours will find support from numerous judgments of this
Court. Once the parties had consciously agreed that the juridical
seat of the arbitration would be London and that the arbitration
agreement will be governed by the laws of England, it was no
longer open to them to contend that the provisions of Part I of the
Arbitration Act would also be applicable to the arbitration
agreement. This Court in Videocon Industries Ltd. v. Union of
India has clearly held as follows: (SCC p. 178, para 33)
’33. In the present case also, the parties had agreed that
notwithstanding Article 33.1, the arbitration agreement
contained in Article 34 shall be governed by laws of England.
This necessarily implies that the parties had agreed to exclude
the provisions of Part I of the Act. As a corollary to the above
conclusion, we hold that the Delhi High Court did not have the
jurisdiction to entertain the petition filed by the respondents
under Section 9 of the Act and the mere fact that the appellant
had earlier filed similar petitions was not sufficient to clothe
that High Court with the jurisdiction to entertain the petition
filed by the respondents.’
* * *
55. The effect of choice of seat of arbitration was considered by the
Court of Appeal in C v. D. This judgment has been specifically
approved by this Court in Balco and reiterated in Enercon (India)
Ltd. v. Enercon Gmbh. In C v. D, the Court of Appeal has
observed: (C case, Bus LR p. 851,para 16)
‘Primary conclusion
16. I shall deal with Mr Hirst’s arguments in due course but, in
my judgment, they fail to grapple with the central point at issue
which is whether or not, by choosing London as the seat of the
arbitration, the parties must be taken to have agreed that
proceedings on the award should be only those permitted by
English law. In my view they must be taken to have so agreed
for the reasons given by the Judge. The whole purpose of the
balance achieved by the Bermuda form (English arbitration but
applying New York law to issues arising under the policy) is that
judicial remedies in respect of the award should be those
permitted by English law and only those so permitted. Mr Hirst
could not say (and did not say) that English judicial remedies
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for lack of jurisdiction on procedural irregularities under
Sections 67 and 68 of the 1996 Act were not permitted; he was
reduced to saying that New York judicial remedies were also
permitted. That, however, would be a recipe for litigation and
(what is worse) confusion which cannot have been intended by
the parties. No doubt New York Law has its own judicial
remedies for want of jurisdiction and serious irregularity but it
could scarcely be supposed that a party aggrieved by one part of
an award could proceed in one jurisdiction and a party
aggrieved by another part of an award could proceed in another
jurisdiction. Similarly, in the case of a single complaint about
an award, it could not be supposed that the aggrieved party
could complain in one jurisdiction and the satisfied party be
entitled to ask the other jurisdiction to declare its satisfaction
with the award. There would be a serious risk of parties rushing
to get the first judgment or of conflicting decisions which the
parties cannot have contemplated.’
56. The aforesaid observations in C v. D were subsequently
followed by the High Court of Justice, Queen’s Bench Division,
Commercial Court (England) in Sulamerica Cia Nacional de
Seguros SA v. Enesa Engelharia SA. In laying down the same
proposition, the High Court noticed that the issue in that case
depended upon the weight to be given to the provision in Condition
12 of the insurance policy that “the seat of the arbitration shall be
London, England”. It was observed that this necessarily carried
with it the English Court’s supervisory jurisdiction over the
arbitration process. It was observed that:
‘this follows from the express terms of the Arbitration Act, 1996
and, in particular, the provisions of Section 2 which provide that
Part I of the Arbitration Act, 1996 applies where the seat of the
arbitration is in England and Wales or Northern Ireland. This
immediately establishes a strong connection between the
arbitration agreement itself and the law of England. It is for this
reason that recent authorities have laid stress upon the locations
of the seat of the arbitration as an important factor in
determining the proper law of the arbitration agreement.’ ”
(emphasis in original)
53. In Indus Mobile Distribution (P) Ltd., after clearing the air on the
meaning of Section 20 of the Arbitration Act, 1996, the Court in para
19 (which has already been set out hereinabove) made it clear that the
moment a seat is designated by agreement between the parties, it is
akin to an exclusive jurisdiction clause, which would then vest the
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regulating arbitral proceedings arising out of the agreement between
the parties.
xxxx xxxx xxxx
58. Equally, the ratio of the judgment in Indus Mobile Distribution (P)
Ltd., is contained in paras 19 and 20. Two separate and distinct
reasons are given in Indus Mobile Distribution (P) Ltd. for arriving at
the conclusion that the courts at Mumbai alone would have
jurisdiction. The first reason, which is independent of the second, is
that as the seat of the arbitration was designated as Mumbai, it would
carry with it the fact that courts at Mumbai alone would have
jurisdiction over the arbitration process. The second reason given was
that in any case, following the Hakam Singh principle, where more
than one court can be said to have jurisdiction, the agreement itself
designated the Mumbai courts as having exclusive jurisdiction. It is
thus wholly incorrect to state that Indus Mobile Distribution (P) Ltd.
has a limited ratio decidendi contained in para 20 alone, and that
para 19, if read by itself, would run contrary to the 5-Judge Bench
decision in BALCO.
xxxx xxxx xxxx
64. The Court in Enercon GmbH then held that although the word
“venue” is not synonymous with “seat”, on the facts of that case,
London -though described as the “venue” – was really the “seat” of the
arbitration. This was for the reason that London was a neutral place
in which neither party worked for gain, and in which no part of the
cause of action arose. It was thus understood to be a neutral place in
which the proceedings could be “anchored”. Secondly, the Court
stressed on the expression “arbitration proceedings” in Clause 18.3,
which the Court held to be an expression which included not just one
or more individual hearings, but the arbitral proceedings as a whole,
culminating in the making of an award. The Court held:
“63. Second, the language in Clause 18.3 refers to the “arbitration
proceedings”. That is an expression which includes not just one or
more individual or particular hearings but the arbitration
proceedings as a whole including the making of an award. In other
words the parties were anchoring the whole arbitration process in
London right up to and including the making of an award. The
place designated for the making of an award is a designation of
seat. Moreover the language in Clause 18.3 does not refer to the
venue of all hearings “taking place” in London. Clause 18.3
instead provides that the venue of the arbitration proceedings
“shall be” London. This again suggests the parties intended to
anchor the arbitration proceedings to and in London rather than
simply physically locating the arbitration hearings in London.
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Indeed in a case where evidence might need to be taken or perhaps
more likely inspected in India it would make no commercial sense
to construe the provision as mandating all hearings to take place in
a physical place as opposed to anchoring the arbitral process to
and in a designated place. All agreements including an arbitration
agreement should be construed to accord with business common
sense. In my view, there is no business common sense to construe
the arbitration agreement (as contended for by EIL) in a manner
which would simply deprive the arbitrators of an important
discretion that they possess to hear evidence in a convenient
geographical location.
64. Third, Joseph QC submitted that the last sentence of Clause
18.3 can be reconciled with the choice of London as the seat. First,
he submitted that it can be read as referring simply to Part II of the
Indian 1996 Act i.e. the enforcement provisions. Edey QC’ s
response was that if that is all the last sentence meant, then it
would be superfluous. However, I do not consider that any such
superfluity carries much, if any, weight. Alternatively, Joseph QC
submitted that it can be read as referring only to those provisions
of the Indian 1996 Act which were not inconsistent with the English
1996 Act.”
(emphasis supplied)
xxxx xxxx xxxx
82. On a conspectus of the aforesaid judgments, it may be concluded
that whenever there is the designation of a place of arbitration in an
arbitration clause as being the “venue” of the arbitration proceedings,
the expression “arbitration proceedings” would make it clear that the
“venue” is really the “seat” of the arbitral proceedings, as the
aforesaid expression does not include just one or more individual or
particular hearing, but the arbitration proceedings as a whole,
including the making of an award at that place. This language has to
be contrasted with language such as “tribunals are to meet or have
witnesses, experts or the parties” where only hearings are to take
place in the “venue”, which may lead to the conclusion, other things
being equal, that the venue so stated is not the “seat” of arbitral
proceedings, but only a convenient place of meeting. Further, the fact
that the arbitral proceedings “shall be held” at a particular venue
would also indicate that the parties intended to anchor arbitral
proceedings to a particular place, signifying thereby, that that place is
the seat of the arbitral proceedings. This, coupled with there being no
other significant contrary indicia that the stated venue is merely a
“venue” and not the “seat” of the arbitral proceedings, would then
conclusively show that such a clause designates a “seat” of the
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arbitral proceedings. In an international context, if a supranational
body of rules is to govern the arbitration, this would further be an
indicia that “the venue”, so stated, would be the seat of the arbitral
proceedings. In a national context, this would be replaced by the
Arbitration Act, 1996 as applying to the “stated venue”, which then
becomes the “seat” for the purposes a of arbitration.
xxxx xxxx xxxx
98. However, the fact that in all the three appeals before us the
proceedings were finally held at New Delhi, and the awards
were signed in New Delhi, and not at Faridabad, would lead to the
conclusion that both parties have chosen New Delhi as the “seat” of
arbitration under Section 20(1) of the Arbitration Act, 1996.
This being the case, both parties have, therefore, chosen that the
courts at New Delhi alone would have exclusive jurisdiction over
the arbitral proceedings. Therefore, the fact that a part of the cause of
action may have arisen at Faridabad would not be relevant once
the “seat” has been chosen, which would then amount to an
exclusive jurisdiction clause so far as courts of the “seat” are
concerned.”
14. In BBR (India) (supra), the arbitration clause was silent and did not
stipulate seat or venue of arbitration. The Letter of Intent and the contract
were executed at Panchkula, Haryana and the Corporate Office of the
Respondent was also located at Panchkula. After the Sole Arbitrator was
appointed, in the first sitting held on 05.08.2014, the Arbitral Tribunal
determined that the venue of the proceedings would be at the given address
at Panchkula. Neither party objected to the place of arbitration and the
proceedings continued till the stage of framing of issues. In the proceeding
held on 29.05.2015, the Sole Arbitrator recused for personal reasons and the
substitute Arbitrator held that the proceedings shall be conducted in Delhi.
In fact, majority of the proceedings were then conducted in Delhi, including
examination of witnesses and final arguments and the award was also
pronounced at Delhi.
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15. The question that arose for determination before the Supreme Court
was whether conduct of the arbitral proceedings in Delhi would shift the
jurisdictional seat of arbitration from Panchkula to Delhi. Appellant in the
said case had filed an application under Section 34 before this Court while
Respondent later filed a petition under Section 9 before the Additional
District Judge, Panchkula, which was dismissed on ground of lack of
territorial jurisdiction. This order was challenged by the Respondent before
the High Court of Punjab and Haryana and was set aside with a finding that
Courts of Delhi did not have jurisdiction to entertain the Section 34 petition
on the ground that the agreement was silent on the seat of arbitration and the
second Arbitrator had not determined Delhi to be the seat. It is this order
which was challenged before the Supreme Court.
16. Referring to the judgment of the Constitution Bench in Bharat
Aluminium Company v. Kaiser Aluminium Technical Services Inc.,
(2012) 9 SCC 552, as also the judgments in BGS SGS SOMA JV (supra)
and Indus Mobile (supra), the Supreme Court held that on the facts of the
case, if the arbitration proceedings were held throughout in Panchkula, there
would have been no difficulty in holding that Delhi was not the
jurisdictional seat. However, on the recusal of the first Arbitrator and post
appointment of the second, proceedings were held in Delhi and the new
Arbitrator passed an order fixing the venue at Delhi, which cannot be
regarded as a change or relocation of jurisdictional seat from the one fixed
initially by the first Arbitrator as this would lead to uncertainty and
confusion, resulting in avoidable esoteric and hermetic litigation as to the
jurisdictional seat of the arbitration. The seat once fixed by the Arbitral
Tribunal under Section 20(2) should remain static and fixed whereas the
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venue can change. It was, therefore, held that the Courts at Panchkula will
have exclusive jurisdiction while Courts at Delhi would not get jurisdiction
as the jurisdictional seat of arbitration was Panchkula and not Delhi.
17. Coming home to the facts of the present case, one finds that the
arbitration clause is silent on the seat/place/venue of arbitration. Parties
consciously agreed to confer exclusive jurisdiction on the Courts at Jaipur
by incorporating Clause 7.3 in respect of all disputes arising in relation to
the agreement in question. Insofar as the conduct of arbitral proceedings is
concerned, the procedural orders appended by the parties to the pleadings
indicate that all hearings took place virtually. Procedural Order No. 14,
which really is foundation of Petitioner’s case records that it was agreed
between the parties that for the limited purpose of cross-examination of
witnesses, the proceedings be kept at Delhi and while the Arbitrator may
join virtually, witnesses, parties and their representatives would remain
present at the venue, arranged by the Claimant at Delhi. To my mind, this
order cannot be construed as consent of the parties to designate Delhi as
seat/place/venue in the classic sense and the only indication is that the
Arbitrator intended the claimant to choose a venue for the purpose and
convenience of cross-examining the witnesses with the Arbitrator
conducting the proceedings virtually. Sans designation of seat or venue
under Section 20(1) or determination under Section 20(2), the question is
what factors would determine the territorial jurisdiction of this Court and the
answer is not far to seek as this issue is settled by the Supreme Court.
18. In Swastik Gases Private Limited (supra), the short question before
the Supreme Court was whether the Calcutta High Court had exclusive
jurisdiction in respect of a petition under Section 11 of 1996 Act. Clause 18
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of the Agreement provided that the agreement shall be subject to jurisdiction
of the Courts at Kolkata. There was no clause designating seat or venue.
Contention of the Appellant was that even though Clause 18 conferred
jurisdiction on the Courts at Kolkata, it did not specifically bar jurisdiction
of Courts at Jaipur, where also part of cause of action had arisen. On the
other hand, it was contended on behalf of the Respondent that parties clearly
intended to exclude jurisdiction of all Courts other than Kolkata by
incorporating Clause 18. Examining the rival submissions, the Supreme
Court held as follows:-
“11. Hakam Singh [Hakam Singh v. Gammon (India) Ltd., (1971) 1
SCC 286] is one of the earlier cases of this Court wherein this Court
highlighted that where two courts have territorial jurisdiction to try the
dispute between the parties and the parties have agreed that dispute
should be tried by only one of them, the court mentioned in the agreement
shall have jurisdiction. This principle has been followed in many
subsequent decisions.
12. In Globe Transport [Globe Transport Corpn. v. Triveni Engg.
Works, (1983) 4 SCC 707] while dealing with the jurisdiction clause which
read, “the court in Jaipur City alone shall have jurisdiction in respect of
all claims and matters arising (sic) under the consignment or of the goods
entrusted for transportation”, this Court held that the jurisdiction clause
in the agreement was valid and effective and the courts at Jaipur only had
jurisdiction and not the courts at Allahabad which had jurisdiction over
Naini where goods were to be delivered and were in fact delivered.
13. In A.B.C. Laminart [A.B.C. Laminart (P) Ltd. v. A.P. Agencies,
(1989) 2 SCC 163] , this Court was concerned with Clause 11 in the
agreement which read, “any dispute arising out of this sale shall be
subject to Kaira jurisdiction”. The disputes having arisen out of the
contract between the parties, the respondents therein filed a suit for
recovery of amount against the appellants therein and also claimed
damages in the Court of the Subordinate Judge at Salem. The appellants,
inter alia, raised the preliminary objection that the Subordinate Judge at
Salem had no jurisdiction to entertain the suit as parties by express
contract had agreed to confer exclusive jurisdiction in regard to all
disputes arising out of the contract on the Civil Court at Kaira. When the
matter reached this Court, one of the questions for consideration was
whether the Court at Salem had jurisdiction to entertain or try the suit.
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While dealing with this question, it was stated by this Court that the
jurisdiction of the court in the matter of contract would depend on the situs
of the contract and the cause of action arising through connecting factors.
The Court referred to Sections 23 and 28 of the Contract Act, 1872 (for
short “the Contract Act“) and Section 20(c) of the Civil Procedure Code
(for short “the Code”) and also referred to Hakam Singh [Hakam
Singh v. Gammon (India) Ltd., (1971) 1 SCC 286] and in para 21 of the
Report held as under: (A.B.C. Laminart case [A.B.C. Laminart (P)
Ltd. v. A.P. Agencies, (1989) 2 SCC 163] , SCC pp. 175-76)
“21. … When the clause is clear, unambiguous and specific accepted
notions of contract would bind the parties and unless the absence of
ad idem can be shown, the other courts should avoid exercising
jurisdiction. As regards construction of the ouster clause when words
like ‘alone’, ‘only’, ‘exclusive’ and the like have been used there may
be no difficulty. Even without such words in appropriate cases the
maxim expressio unius est exclusio alterius–expression of one is the
exclusion of another–may be applied. What is an appropriate case
shall depend on the facts of the case. In such a case mention of one
thing may imply exclusion of another. When certain jurisdiction is
specified in a contract an intention to exclude all others from its
operation may in such cases be inferred. It has therefore to be
properly construed.”
xxxx xxxx xxxx
17. Likewise, in Shriram City [Shriram City Union Finance Corpn.
Ltd. v. Rama Mishra, (2002) 9 SCC 613] , the legal position stated
in Hakam Singh [Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC
286] was reiterated. In that case, Clause 34 of the lease agreement read,
“subject to the provisions of Clause 32 above it is expressly agreed by and
between the parties hereinabove that any suit, application and/or any
other legal proceedings with regard to any matter, claims, differences and
for disputes arising out of this agreement shall be filed and referred to the
courts in Calcutta for the purpose of jurisdiction”. This Court held that
Clause 34 left no room for doubt that the parties had expressly agreed
between themselves that any suit, application or any other legal
proceedings with regard to any matter, claim, differences and disputes
arising out of this claim shall only be filed in the courts in Calcutta. Whilst
drawing difference between inherent lack of jurisdiction of a court on
account of some statute and the other where parties through agreement
bind themselves to have their dispute decided by any one of the courts
having jurisdiction, the Court said: (Shriram City case [Shriram City
Union Finance Corpn. Ltd. v. Rama Mishra, (2002) 9 SCC 613] , SCC pp.
616-17, para 9)
“9. … It is open for a party for his convenience to fix the jurisdiction
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of any competent court to have their dispute adjudicated by that court
alone. In other words, if one or more courts have the jurisdiction to
try any suit, it is open for the parties to choose any one of the two
competent courts to decide their disputes. In case parties under their
own agreement expressly agree that their dispute shall be tried by
only one of them then the parties can only file the suit in that court
alone to which they have so agreed. In the present case, as we have
said, through Clause 34 of the agreement, the parties have bound
themselves that in any matter arising between them under the said
contract, it is the courts in Calcutta alone which will have
jurisdiction. Once parties bound themselves as such it is not open for
them to choose a different jurisdiction as in the present case by filing
the suit at Bhubaneshwar. Such a suit would be in violation of the said
agreement.”
xxxx xxxx xxxx
27. In a comparatively recent decision in A.V.M. Sales [A.V.M. Sales
Corpn. v. Anuradha Chemicals (P) Ltd., (2012) 2 SCC 315 : (2012) 1 SCC
(Civ) 809] , the terms of the agreement contained the clause, “any dispute
arising out of this agreement will be subject to Calcutta jurisdiction only”.
The respondent before this Court had filed a suit at Vijayawada for
recovery of dues from the petitioner while the petitioner had filed a suit for
recovery of its alleged dues from the respondent in Calcutta High Court.
One of the questions under consideration before this Court was whether
the court at Vijayawada had no jurisdiction to entertain the suit on
account of exclusion clause in the agreement. Having regard to the facts
obtaining in the case, this Court first held that both the courts within the
jurisdiction of Calcutta and Vijayawada had jurisdiction to try the suit.
Then it was held that in view of the exclusion clause in the agreement, the
jurisdiction of courts at Vijayawada would stand ousted.
28. Section 11(12)(b) of the 1996 Act provides that where the matters
referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an
arbitration other than the international commercial arbitration, the
reference to “Chief Justice” in those sub-sections shall be construed as a
reference to the Chief Justice of the High Court within whose local limits
the Principal Civil Court referred to in Section 2(1)(e) is situate, and
where the High Court itself is the court referred to in clause (e) of sub-
section (1) of Section 2, to the Chief Justice of that High Court. Clause (e)
of sub-section (1) of Section 2 defines “court” which means the Principal
Civil Court of Original Jurisdiction in a district, and includes the High
Court in exercise of its ordinary civil jurisdiction, having jurisdiction to
decide the questions forming the subject-matter of the arbitration if the
same had been the subject-matter of a suit, but does not include any civil
court of a grade inferior to such Principal Civil Court, or any Court of
Small Causes.
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29. When it comes to the question of territorial jurisdiction relating to
the application under Section 11, besides the above legislative provisions,
Section 20 of the Code is relevant. Section 20 of the Code states that
subject to the limitations provided in Sections 15 to 19, every suit shall be
instituted in a court within the local limits of whose jurisdiction:
(a) the defendant, or each of the defendants where there are more
than one, at the time of commencement of the suit, actually and
voluntarily resides, or carries on business, or personally works for
gain; or
(b) any of the defendants, where there are more than one, at the time
of the commencement of the suit, actually and voluntarily resides, or
carries on business, or personally works for gain, provided that in
such case either the leave of the court is given, or the defendants who
do not reside, or carry on business, or personally work for gain, as
aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part arises.
30. The Explanation appended to Section 20 clarifies that a
corporation shall be deemed to carry on business at its sole or principal
office in India or, in respect of any cause of action arising at any place
where it has also a subordinate office, at such place.
31. In the instant case, the appellant does not dispute that part of
cause of action has arisen in Kolkata. What appellant says is that part of
cause of action has also arisen in Jaipur and, therefore, the Chief Justice
of the Rajasthan High Court or the designate Judge has jurisdiction to
consider the application made by the appellant for the appointment of an
arbitrator under Section 11. Having regard to Section 11(12)(b) and
Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there
remains no doubt that the Chief Justice or the designate Judge of the
Rajasthan High Court has jurisdiction in the matter. The question is,
whether parties by virtue of Clause 18 of the agreement have agreed to
exclude the jurisdiction of the courts at Jaipur or, in other words, whether
in view of Clause 18 of the agreement, the jurisdiction of the Chief Justice
of the Rajasthan High Court has been excluded?
32. For answer to the above question, we have to see the effect of the
jurisdiction clause in the agreement which provides that the agreement
shall be subject to jurisdiction of the courts at Kolkata. It is a fact that
whilst providing for jurisdiction clause in the agreement the words like
“alone”, “only”, “exclusive” or “exclusive jurisdiction” have not been
used but this, in our view, is not decisive and does not make any material
difference. The intention of the parties–by having Clause 18 in the
agreement–is clear and unambiguous that the courts at Kolkata shall
have jurisdiction which means that the courts at Kolkata alone shall have
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jurisdiction. It is so because for construction of jurisdiction clause, like
Clause 18 in the agreement, the maxim expressio unius est exclusio
alterius comes into play as there is nothing to indicate to the contrary.
This legal maxim means that expression of one is the exclusion of another.
By making a provision that the agreement is subject to the jurisdiction of
the courts at Kolkata, the parties have impliedly excluded the jurisdiction
of other courts. Where the contract specifies the jurisdiction of the courts
at a particular place and such courts have jurisdiction to deal with the
matter, we think that an inference may be drawn that parties intended to
exclude all other courts. A clause like this is not hit by Section 23 of the
Contract Act at all. Such clause is neither forbidden by law nor it is
against the public policy. It does not offend Section 28 of the Contract Act
in any manner.”
19. In Ravi Ranjan Developers Pvt. Ltd. (supra), the arbitration clause
provided that sitting of the Arbitral Tribunal shall be at Kolkata. Petition
was filed for appointment of the Arbitrator before Calcutta High Court and
the question before the Supreme Court was whether the said Court had
territorial jurisdiction. The Supreme Court held that Section 11(6) has to be
harmoniously read with Section 2(1)(e) and construed to mean a High Court
which exercises superintendence/supervisory jurisdiction over a Court
within the meaning of Section 2(1)(e). It was observed that the agreement
was executed and registered outside the jurisdiction of the Calcutta High
Court and the property in question was also located outside the jurisdiction
and therefore, no part of cause of action had arisen within the jurisdiction of
the Calcutta High Court. Parties had never agreed to refer their disputes to
the jurisdiction of Kolkata Courts or that Kolkata should be the seat of
arbitration and it was merely intended to be the venue for arbitration sittings.
Following this judgment, this Court in Kings Chariot (supra), while dealing
with the case where the arbitration clause was silent on seat/venue and the
agreement only incorporated a clause providing that ‘all disputes subject to
Delhi jurisdiction only’, held that there is no confusion that for purpose of
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arbitration, even if no part of cause of action has arisen in a place, parties
can agree on a seat of jurisdiction. However, if parties do not so specify,
then the jurisdiction of the Court is determined in accordance with Sections
16 to 20 CPC. In the said case, the entire cause of action had arisen in
Madhya Pradesh and in the absence of seat or venue of arbitration, the Court
held that it had no jurisdiction to entertain the petition.
20. The judgement of the Supreme Court in B.E. Simoese Von Staraburg
Niedenthal (supra), where Clause 13 of the Agreement provided ‘the Courts
at Goa shall have exclusive jurisdiction’, highlights the importance of
parties agreeing to the exclusive jurisdiction of the Court at one place and
ousting the jurisdiction of all other Courts, where several Courts may have
jurisdiction based on cause of action. Respondent therein did not dispute the
jurisdiction of the Courts at Goa but pleaded that Raipur Court would also
have jurisdiction since the company’s business was in Raipur and the cause
of action also arose at the said place. Referring to the judgment in Swastik
Gases Private Limited (supra) and other judgments on the issue, the
Supreme Court held that in light of Clause 13, jurisdiction of the District
Judge, Raipur was ousted and the only competent Court of jurisdiction was
Goa, since parties clearly intended to exclude jurisdiction of all other Courts.
21. In Emkay Global Financial Services Limited (supra), the arbitration
clause was silent on seat/venue and the jurisdiction clause in the agreement
provided exclusive jurisdiction of the Courts in Mumbai. The arbitral
proceedings were conducted at Delhi. The Supreme Court held that in view
of the exclusive jurisdiction in the Agreement, only Mumbai Courts will
have jurisdiction to entertain the Section 34 petition and place in Delhi
where arbitration proceedings were conducted, was only a convenient venue.
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Signing Date:11.07.2025
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Recently, in Zhejiang Bonly Elevator Guide Rail Manufacture Co. Ltd.
(supra), in a petition filed by the Petitioner under Section 9 of 1996 Act,
relying on the judgments of the Supreme Court in BBR (India) (supra) and
BGS SGS SOMA JV (supra), this Court held that Delhi High Court did not
have the jurisdiction under Section 2(1)(e)(i) of 1996 Act to entertain the
petition. In the said case, arbitration clause was silent on venue or seat. In
one of the procedural orders, the Arbitrator had observed that the arbitral
proceedings would be held in Delhi or Ahmedabad. As a matter of record,
16 out of 19 proceedings were conducted at Delhi while the award was
pronounced online. Respondent contended that Clause 15 of the Contract
neither determined the seat nor the venue and the procedural order when
read plainly did not make Delhi the determinable place of arbitration.
Petitioner, on the other hand, contended that majority of proceedings were
held at Delhi and thus the venue became the juridical seat of arbitration. It
was also urged that Section 2(1)(e) will have to be read in light of Section
20(2) which postulates that place of arbitration shall be determined by the
Arbitral Tribunal having regard to the circumstances of the case and
convenience of the parties and in the absence of any agreement under
Section 20(1), the decision of the Arbitral Tribunal to hold proceedings in
Delhi under Section 20(2) would confer jurisdiction on the Courts at Delhi.
22. After examining these submissions, the Court held that the Arbitrator
only found it more convenient for himself to conduct arbitration proceedings
in Delhi without fixing Delhi as a venue of arbitration in any of the orders
and thus venue was not the seat of arbitration. Moreover, since Respondent
was staying in Ahmedabad; contract was signed at Ahmedabad; and
majority of the goods were also delivered to the Respondent in Ahmedabad,
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cause of action had arisen in Ahmedabad and in the absence of designation
of seat/place/venue of arbitration, principles under Sections 16 to 20 CPC
will be attracted and Delhi Courts will have no jurisdiction.
23. In the present case, admittedly there is no designation of seat/place/
venue in the arbitration clause. Parties have consciously agreed to confer
exclusive jurisdiction on the Courts at Jaipur on significant and extenuating
factors such as issuance of tender and purchase orders in question at Jaipur;
execution of the agreements at Jaipur; supervision and control of the entire
work from the registered office of the Respondents situated in Jaipur.
Moreover, the disputes referred to arbitration have emanated from decisions
taken at Jaipur. Therefore, the entire cause of action has arisen at Jaipur and
there is no contrary indicia to the exclusive jurisdiction clause. Parties
consciously incorporated the exclusive jurisdiction clause conferring
jurisdiction on the Courts at Jaipur in respect of all disputes emanating from
the Agreement in question, thereby ousting the jurisdiction of all other
Courts. Applying the principles laid down by the Supreme Court in Swastik
Gases Private Limited (supra), the jurisdiction will thus be determined by
applying the provisions of Sections 16 to 20 CPC and so applied, there can
be no doubt that this Court will have no territorial jurisdiction to entertain
this petition.
24. Insofar as the argument of the Petitioner that Section 20(2) will be
attracted in the present case conferring jurisdiction on this Court in the
absence of any agreement between the parties under Section 20(1) of 1996
Act is concerned, I am of the view that the argument cannot be accepted. As
noted above, the Tribunal has only recorded the agreement of the parties to
conduct the proceedings in Delhi for the limited purpose of cross-
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examination of witnesses ‘for now’. This cannot be construed as determining
seat or venue at Delhi. Therefore, there being no agreement under Section
20(1) and no determination under Section 20(2), as also in light of the
exclusive jurisdiction Clause 7.3 and Sections 16 to 20 CPC, this Court
lacks the territorial jurisdiction to entertain this petition.
25. Accordingly, this petition is dismissed with liberty to the Petitioner to
take recourse to appropriate remedies before the Court of competent
jurisdiction. It is made clear that this Court has not expressed any opinion on
the merits of the case and all rights and contentions of the parties are left
open. Pending application also stands disposed of.
JYOTI SINGH, J
JULY 09 , 2025/ Shivam/S.Sharma
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By:KAMAL KUMAR
Signing Date:11.07.2025
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