1. Appeal against appointment of arbitrator under Section 11(6), Arbitration Act — Dispute over juridical seat. (Para 2 , 4 )
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2026 Supreme(SC) 1109
SUPREME COURT OF INDIA
Manoj Misra, Vijay Bishnoi, JJ.
Arcis Clean Energy Pvt. Ltd. – Appellant
Versus
Parshva Innovation – Respondent
Civil Appeal No. 13663 of 2026 (Arising out of SLP Civil No. 35915 of 2025)
Decided On : 12-10-2026
Important Points
When an arbitration agreement designates multiple locations, the juridical seat is determined by holistically interpreting the contract. If an exclusive jurisdiction clause points to a specific location where proceedings are also to be held, that location is the seat, while others are merely venues.
Subject
Arbitration Law - Jurisdiction and Seat of Arbitration
Act Referred
Headnote
(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Distinction between 'seat' and 'venue' of arbitration - The 'seat' is akin to an exclusive jurisdiction clause; once determined, the courts where the seat is located have exclusive jurisdiction for regulating arbitral proceedings (Paras 12, 18).
(B) Criteria for construing 'venue' as 'seat' - A three-condition test applies: (i) the arbitration clause should designate only one place; (ii) such place must have anchored the proceedings without scope for change; and (iii) there must be no other significant contrary indicia to show the place is merely the venue (Para 20).
(C) Determining juridical seat through holistic interpretation - Where an agreement specifies a place for arbitration but simultaneously confers exclusive jurisdiction on courts in a different place, the 'venue' does not automatically become the 'seat'. In such cases, the intention of the parties must be determined by reading the agreement in its entirety, including governing law and jurisdiction clauses (Paras 21, 22).
Facts of the case:
An agreement between parties provided that the location of arbitration shall be in one city, while the arbitral proceedings were to be held in another city. Additionally, a separate governing law and jurisdiction clause stipulated that parties submit to the exclusive jurisdiction of competent courts in the second city. Following a dispute, a party approached the High Court of the first city for the appointment of an arbitrator under Section 11(6) of the Act. This order was challenged on the ground that the first city was merely the venue and the second city was the juridical seat.
Findings of Court:
Found that the arbitration clause mentioned two different places, thereby failing the three-condition test for a venue to be automatically construed as a seat. By harmoniously reading the arbitration proceedings clause and the exclusive jurisdiction clause, it was determined that the second city was the juridical seat and the first city was merely a venue. Consequently, the High Court of the first city lacked jurisdiction to appoint the arbitrator.
Issues: Whether the designated location of arbitration in one city constitutes the juridical seat or merely a venue when the agreement simultaneously designates another city for holding proceedings and vests exclusive jurisdiction in the courts of that second city.
Ratio Decidendi: When an arbitration agreement refers to multiple locations, the place designated as the venue is not automatically the seat. The juridical seat must be ascertained by a holistic reading of the agreement. When a governing law clause confers exclusive jurisdiction on courts of a specific place and the agreement also specifies that proceedings be held there, that place is the juridical seat.
Result: Appeal allowed.
(B) Criteria for construing 'venue' as 'seat' - A three-condition test applies: (i) the arbitration clause should designate only one place; (ii) such place must have anchored the proceedings without scope for change; and (iii) there must be no other significant contrary indicia to show the place is merely the venue (Para 20).
(C) Determining juridical seat through holistic interpretation - Where an agreement specifies a place for arbitration but simultaneously confers exclusive jurisdiction on courts in a different place, the 'venue' does not automatically become the 'seat'. In such cases, the intention of the parties must be determined by reading the agreement in its entirety, including governing law and jurisdiction clauses (Paras 21, 22).
Facts of the case:
An agreement between parties provided that the location of arbitration shall be in one city, while the arbitral proceedings were to be held in another city. Additionally, a separate governing law and jurisdiction clause stipulated that parties submit to the exclusive jurisdiction of competent courts in the second city. Following a dispute, a party approached the High Court of the first city for the appointment of an arbitrator under Section 11(6) of the Act. This order was challenged on the ground that the first city was merely the venue and the second city was the juridical seat.
Findings of Court:
Found that the arbitration clause mentioned two different places, thereby failing the three-condition test for a venue to be automatically construed as a seat. By harmoniously reading the arbitration proceedings clause and the exclusive jurisdiction clause, it was determined that the second city was the juridical seat and the first city was merely a venue. Consequently, the High Court of the first city lacked jurisdiction to appoint the arbitrator.
Issues: Whether the designated location of arbitration in one city constitutes the juridical seat or merely a venue when the agreement simultaneously designates another city for holding proceedings and vests exclusive jurisdiction in the courts of that second city.
Ratio Decidendi: When an arbitration agreement refers to multiple locations, the place designated as the venue is not automatically the seat. The juridical seat must be ascertained by a holistic reading of the agreement. When a governing law clause confers exclusive jurisdiction on courts of a specific place and the agreement also specifies that proceedings be held there, that place is the juridical seat.
Result: Appeal allowed.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. Salvador Santosh Rebello- 2891, AOR Mr. Raghav Sharma, Adv. Ms. Sneha Bhargava, Adv. Mr. Ankit Rana, Adv. Mr. Devesh Khandelwal, Adv.
For the Respondent(s): Mr. Mudit Gupta- 3309, AOR Mr. Varun Singh, Adv. Ms. Alankriti, Adv. Ms. Somesa Gupta, Adv. Ms. Kajal Gupta, Adv. Mr. Arun Sidhant, Adv. Ms. Deepeika Kalia, Adv. Mr. Sudeep Chandra, Adv.
For the Appellant(s) : Mr. Salvador Santosh Rebello- 2891, AOR Mr. Raghav Sharma, Adv. Ms. Sneha Bhargava, Adv. Mr. Ankit Rana, Adv. Mr. Devesh Khandelwal, Adv.
For the Respondent(s): Mr. Mudit Gupta- 3309, AOR Mr. Varun Singh, Adv. Ms. Alankriti, Adv. Ms. Somesa Gupta, Adv. Ms. Kajal Gupta, Adv. Mr. Arun Sidhant, Adv. Ms. Deepeika Kalia, Adv. Mr. Sudeep Chandra, Adv.
Table of Contents
2. Appellant: seat in Goa, Delhi HC lacks jurisdiction. Respondent: venue in Delhi, arbitration clause independent. (Para 6 , 7 , 8 , 9 )
3. Both Delhi (location) and Goa (proceedings) mentioned; exclusive jurisdiction clause in Goa indicates juridical seat. (Para 21 , 22 , 23 )
4. Where multiple places are specified, exclusive jurisdiction clause and governing law determine the juridical seat over venue. (Para 20 , 21 )
5. Appeal allowed; Delhi High Court order set aside; parties at liberty to approach jurisdictional High Court. (Para 24 )
6. How is the juridical seat of arbitration determined when multiple places are mentioned in the arbitration clause?
The juridical seat is determined by reading the agreement holistically, with exclusive jurisdiction and governing law clauses prevailing over a mere venue designation. (Para 20 , 21 , 22 )
7. Does the independence of an arbitration agreement prevent considering the governing law clause for determining the seat?
No – when the arbitration clause mentions two places, the governing law clause becomes crucial to ascertain the parties' intent on the juridical seat. (Para 22 )
8. What is the legal effect of an exclusive jurisdiction clause in an agreement on the seat of arbitration?
An exclusive jurisdiction clause in the governing law provision indicates the parties' intention to vest exclusive supervisory jurisdiction in courts at that place, making it the juridical seat. (Para 12 , 13 , 14 , 17 )
JUDGMENT :
MANOJ MISRA, J.
1. Leave granted.
2. This appeal impugns the order of the Delhi High Court1[The High Court] dated 11th November 2025, whereby, in exercise of its jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 19962[1996 Act], the High Court appointed an arbitrator to resolve disputes inter se parties arising out of a “Franchise Agreement”3[The Agreement] dated 03rd August 2023.
3. Clause 32 of the Agreement carries the arbitration clause in the following terms:
- “32. ARBITRATION AND DISPUTE RESOLUTION
32.1. Any dispute or difference between the Parties arising out of or in connection with this Agreement, including any question regarding its interpretation, existence, performance, validity, or termination, either during the term of the Agreement or at anytime thereafter, will be settled between the Parties through friendly consultations and negotiations.
32.2. If no settlement can be reached though friendly consultations and negotiations as discussed according to terms of this Agreement within thirty (30) days of one Party delivering a notice of the dispute or difference to the other Party, then such dispute will be finally settled by arbitration.
32.3. The arbitration proceedings will be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”).
32.4. The dispute or difference shall be referred to a panel of sole arbitrator to be appointed mutually by Parties. In the event of the parties not being able to concur on the appointment of a sole arbitrator then such sole arbitrator to be appointed by mutual consent of both parties as per the provisions of the Arbitration and Conciliation Act, 1996 and as amended from time to time. The precise location of the arbitration shall be within Delhi and the appointment of the sole arbitrator shall be in accordance with the rules prescribed under Arbitration and Conciliation Act, 1996.
32.5. The arbitration proceedings will be held in Goa and the language to be used in the arbitral proceedings will be English.
32.6. The prevailing Party in the arbitration proceedings will be awarded reasonable attorney’s fees, if any, and all other costs and expenses in relation to the arbitration proceedings unless the arbitrators for good cause determine otherwise.”
4. Invoking the aforesaid clause, the respondent proposed name of a sole arbitrator vide notice dated 25th March 2025. The said proposal was rejected by the appellant vide response letter dated 19th April, 2025. Consequently, the respondent applied to the High Court for appointing an arbitrator under Section 11(6) of the 1996 Act.
5. By the impugned order, the High Court appointed the arbitrator and left it open for him to select venue for the hearings in consultation with the parties.
Submissions on behalf of the appellant
6. The appellant has questioned the impugned order on the ground that the Delhi High Court lacked jurisdiction as the juridical seat of arbitration is in Goa. It is submitted that the agreement between the parties clearly discloses that the parties shall submit to the exclusive jurisdiction of the competent court in Goa, therefore the juridical seat would be Goa. In support of his submission, besides the arbitration clause, our attention was invited to Clause 38 of the Agreement, which reads as under:-
- “38. GOVERNING LAW AND JURISDICTION
“This Agreement shall be interpreted and construed exclusively in accordance with the laws of India and parties shall agree to submit to the exclusive jurisdiction of competent courts in Goa, India.”
7. By relying on Clauses 32 and 38 of the Agreement, the learned counsel for the appellant submits that Clause 32.4, which provides for location of the arbitration within Delhi, is about the venue whereas Clauses 32.5 and 38 of the Agreement determine the juridical seat. It is urged that the High Court mistook venue as the juridical seat; therefore, the impugned order is liable to be set aside. In support of his submis
