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M/s. Inox Renewables Ltd. Vs. Jayesh Electricals Ltd. - (Supreme Court) (13 Apr 2021)

Once the seat of arbitration is replaced by mutual agreement, changed venue becomes 'seat of arbitration'



The present appeal arises out of the impugned judgment passed by the High Court of Gujarat at Ahmedabad in which Special Civil Application filed by the Appellant, against the order passed by the Commercial Court, Ahmedabad was dismissed, holding that the Courts at Jaipur, Rajasthan would be the Courts in which the Section 34 of Arbitration and Conciliation Act, 1996 petition could be filed.

In present case, as 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 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 The learned arbitrator has recorded that by mutual agreement, Jaipur as a “venue” has gone and has been replaced by Ahmedabad.

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.

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. The execution proceedings shall remain stayed till the disposal of the Section 34 petition unless the appropriate forum at Ahmedabad varies this interim order. The appeal is disposed of.


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