G.R. Builders Vs. Metro Speciality Hospitals Pvt. Ltd. and Ors. - (High Court of Delhi) (26 Sep 2023)

Once the seat of arbitration is fixed, the same would be in the nature of an exclusive jurisdiction clause binding the parties to a specific court

MANU/DE/6566/2023

Arbitration

By way of present petition filed under Section 11(6) and (8) of the Arbitration and Conciliation Act, 1996 (Arbitration Act), the Petitioner seeks appointment of an independent and impartial arbitrator as well as declaration to the effect that the Respondent's nomination and appointment of the arbitrator is contrary to the procedure stipulated in the Letter of Intent executed between the parties.

The parties have taken competing stands as to the place of the execution of the LOI. While Petitioner claims that it signed the instrument at Delhi, Respondent contends that, the instrument was signed in Faridabad. Admittedly, the Respondent as well as the project is located in Faridabad.

Section 2(1)(e) of the Arbitration Act defines 'Court'. An application under Section 11(6) of the Arbitration Act must be filed before a High Court which exercises superintendence/supervisory jurisdiction over a Court within the meaning of Section2(1)(e) of the Arbitration Act. Supreme Court in Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee observed that both the aforesaid provisions have to be read harmoniously to determine the jurisdiction.

In Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc., it was held that once the seat of arbitration is fixed, the same would be in the nature of an exclusive jurisdiction clause binding the parties to a specific court which alone could exercise supervisory power over the arbitration.

In view of the settled law, the accrual of cause of action at a place for pursuing a substantive legal action is not a consideration for determining jurisdiction for the purposes of Section 11. Location of seat of arbitration is what will be a relevant consideration. In the present case, as per clause 31.16, the place of arbitration is Faridabad (Haryana), which would be the chosen as the seat, since seat has not been separately named and there are no other contrary indicia to show that the place of arbitration was not intended to be the seat of arbitration. Present court lacks territorial jurisdiction to entertain the present petitions. The other contentions raised by the parties need not be gone into. Petitions dismissed.

Tags : APPOINTMENT ARBITRATION JURISDICTION