IMPORTANT POINT
Seat and venue of arbitration – Intention of parties is paramount factor in determining seat – Distinction between seat and venue of arbitration is both deliberate and doctrinal.

JUDGMENT :

ALOK ARADHE, J.

1. Delay condoned.

2. Leave granted.

3. The present appeal presents an occasion to revisit the settled distinction between the seat and venue of arbitration, and consequent determination of supervisory jurisdiction of the courts. The appeal arises from an order directing return of a petition under Section 34 of Jammu & Kashmir Arbitration and Conciliation Act, 1997 (Act).

FACTS: -

4. The facts giving rise to the present appeal are undisputed and may be briefly stated. The appellant, Jammu and Kashmir Economic Reconstruction Agency (JKERA) is a society registered under the Societies Registration Act, 1941 functioning as a special purpose vehicle for execution of externally aided infrastructure projects. The respondent is a contractor engaged by the appellant for execution of four infrastructure road projects namely, (i) Kralgund-Ashpora-Qaziabad Road Project (Kralgund Project) (ii) Handwara-Zachaldara-Waddur Road Project (Handwara Project) (iii) Hubdipora-Kadar-Qaimoh Road Project (Hubdipora Project) and (iv) Shahdra-Kamalkote Road Project (Shahdra Project) in the State of Jammu & Kashmir. The agreements between the parties were executed on 31.03.2008.

5. Disputes having arisen between the parties regarding the contractual claims, the respondent invoked the arbitration, by issuing a notice on 18.04.2014, in terms of Arbitration clause contained in the agreements. The respondent thereafter filed four separate applications on 12.06.2014 under Section 11 of the Act before the High Court of Jammu & Kashmir and Ladakh at Srinagar (High Court) for appointment of sole arbitrator for each project. By an order dated 30.07.2015, the High Court, appointed Mr. Javed Ahmad Kawoosa, former District and Sessions Judge as sole arbitrator.

6. The appellant challenged the said order by filing Civil Appeal Nos.14167-14170 of 2015. By an order dated 07.12.2015, this Court, having regard to the value of the contracts, modified the High Court order and appointed Mr. Justice S.S. Nijjar, former Judge of this Court as the sole arbitrator in substitution of the previously appointed arbitrator.

7. By an order dated 26.03.2016, the Arbitral Tribunal, with the consent of the parties fixed Srinagar as seat of arbitration and New Delhi as the venue. Upon the demise of sole arbitrator, on 26.03.2021, the High Court in exercise of powers under Sections 14 and 15 of the Act vide order dated 17.09.2021 appointed Mr. Justice Amitava Roy, a former Judge of this Court, as the sole arbitrator to continue proceedings from the stage left by the previous arbitrator. The arbitral award was delivered on 15.01.2024 at New Delhi. The applications under Section 33 of the Act filed by the appellant, were subsequently decided by an order dated 12.03.2024.

8. The appellant filed a petition under Section 34 of the Act before the High Court seeking to set aside the arbitral award dated 15.01.2024 and order dated 12.03.2024 in so far it related to Shahdra Project. The respondent raised a preliminary objection regarding the territorial jurisdiction.

9. By an order dated 08.07.2024, the High Court returned the petition, holding that since the arbitration proceedings were conducted and the award was rendered at New Delhi, the courts at New Delhi alone had jurisdiction.

SUBMISSIONS: -

10. Learned counsel for the appellant contended that by an order dated 26.03.2016, with the consent of the parties, the arbitrator had fixed the seat of arbitration at Srinagar and the same could be altered only by mutual agreement. It is submitted that where the seat and venue differ, the seat determines the supervisory jurisdiction, hence the courts at S