Rajiv Bhatia v. Indusind Bank Ltd. and Ors. - (High Court of Himachal Pradesh) (23 Mar 2017)

“Venue of Arbitration proceedings” need not essentially be a place where “seat of arbitration” is located”

MANU/HP/0106/2017

Arbitration

In facts of present case, pursuant to award passed by Arbitrator in favour of Respondent/decree holder, an execution petition was filed before Court below. Petitioner primarily raised two objections; one with regard to territorial jurisdiction of Arbitrator and other with regard to amounts paid by him from time to time having not been accounted and reflected in statement of accounts by Respondent. Objections filed by Petitioner, have been dismissed and warrants of attachment of his property have been issued. Moot question in present case is whether by referring the matter for arbitration at Chennai, has Respondent violated territorial jurisdiction and conferred the same to an authority, which practically had no jurisdictional authority to adjudicate such claim.

Clause 23(c) of Loan agreement provides that "venue of Arbitration proceedings shall be at Chennai."It is not that, seat of Arbitrator is at Chennai, rather it is only venue of jurisdiction that is at Chennai. There is a marked difference between 'venue of arbitration' and 'seat of arbitration'. It is only seat of arbitration which will give territorial jurisdiction and not venue of jurisdiction. "Seat" is place where court or arbitration is located, which will have territorial jurisdiction with regard to case or in matter, whereas, "venue" is place where arbitral tribunal sits to hold arbitration proceedings and this place need not essentially be place "where seat of arbitration is located".

There is a difference between venue and seat and that merely because arbitrator choose to hold arbitration at a venue, which is different than seat of Arbitration where Court situate, it cannot be said that, Arbitrator has exercised jurisdiction not vested in it.

Another contention of Petitioner that, amounts paid by him from time to time have not been accounted and reflected in statement of accounts by decree holder, these matter are not open to challenge in execution petition as executing Court is bound by decree/award of Arbitrator and cannot go beyond it and were required to be adjudicated before the learned Arbitrator.

Relevant : ABC Laminart Pvt. Limited vs. A.P. Agencies, Salem, MANU/SC/0001/1989: AIR 1989 SC 1239 and Patel Roadways Limited vs. Prasad Trading Company, MANU/SC/0280/1992: 1991 (4) SCC 270

Tags : AWARD EXECUTION JURISDICTION