Sanjay Kumar Verma Vs. Planning and Infrastructural Development Consultants Pvt. Ltd. (Neutral Citation: 2024:DHC:99) - (High Court of Delhi) (08 Jan 2024)

Determination of the seat vests exclusive jurisdiction upon the courts located at the designated seat to supervise the arbitration proceedings

MANU/DE/0049/2024

Arbitration

The Petitioner has invoked the jurisdiction of this Court under Section 11 of the Arbitration and Conciliation Act, 1996 ["Arbitration Act"] for appointment of a Sole Arbitrator to adjudicate disputes pertaining to the Letter of Appointment dated 01st July, 2020 issued to him, by the Respondent ["LoA"]. The existence of LoA, which contains the arbitration agreement, is not in dispute; however, the Respondent objects to the maintainability of the petition on the ground of lack of territorial jurisdiction of this Court.

Section 20 of the Arbitration Act recognizes the parties' autonomy to mutually ascertain the place of arbitration, failing which, the Arbitral Tribunal is endowed with the power to decide the same. While the Act does not mention the term 'seat of arbitration', its import and significance have been outlined through various judicial pronouncements. Determination of the seat vests exclusive jurisdiction upon the courts located at the designated seat to supervise the arbitration proceedings, and precludes other courts from exercising their authority.

In the case at hand, the arbitration clause specifies that "...dispute will be referred to a recognized Arbitrator of company's choice whose decision shall be binding on the parties, the same are subject to Patna jurisdiction". The language of the clause points to a mutual agreement, placing the arbitration proceedings squarely within the jurisdiction of Patna. The wording unambiguously indicates the parties' intent to establish Patna as the place or seat of arbitration. Consequently, the Court finds itself at odds with the Petitioner's interpretation suggesting that, the seat of arbitration has not been definitively determined.

The absence of the explicit term 'seat' in Clause 13 does not diminish the clarity of the agreement that Patna is the designated place of arbitration. Interpreting this clause otherwise would undermine the principle of party autonomy, as embodied in Section 20 of the Arbitration Act, negating the parties' evident consensus on this matter. The parties have mutually and explicitly agreed to place the arbitration under the exclusive jurisdiction of the courts in Patna. This agreement effectively establishes Patna as the seat of arbitration. Consequently, it is the court in Patna that holds the jurisdiction to appoint an Arbitrator under Section 11(6) of the Arbitration Act.

Since the LoA defines Patna as the seat of arbitration, this Court is precluded from exercising its jurisdiction to appoint an Arbitrator under Section 11(6) of the Arbitration Act. Petition dismissed.

Tags : APPOINTMENT ARBITRATOR JURISDICTION