The designation of a venue in an arbitration clause serves as the seat of arbitration, granting jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996.

JUDGEMENT :

Somasekhar Sundaresan J.

The Petitions:

1. Commercial Arbitration Petition No.426 of 2024 (“Section 9 Petition”) is filed under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) seeking various interlocutory reliefs in connection with disputes and differences said to have arisen between Keller Ground Engineering India Private Limited, the Petitioner (“Keller”) on the one hand, and Arcon Powerinfra India Pvt. Ltd., Respondent No.1 and Chhabra’s Associates, Respondent No. 2 (“Contesting Respondents”).

2. Indian Oil Corporation Limited (“Indian Oil”) has been added as Respondent No.3 in the Section 9 Petition since the interlocutory relief to preserve the subject property underlying the arbitration proceedings, required issuance of directions to Indian Oil.

3. Commercial Arbitration Application No.227 of 2024 (“Section 11 Petition”) seeks reference of disputes and differences between Keller and the Contesting Respondents to an arbitral tribunal, in accordance with the arbitration agreement between the parties, in exercise of powers under Section 11 of the Act.

Factual Matrix – Two Work Orders:

4. The facts relating to the existence of the arbitration agreement in this case are a bit piquant. Indian Oil gave a work order to Respondent No. 1, and Respondent No. 1 sub-contracted it with Keller. Thereafter,the parties agreed that Respondent No. 1 would commission the work to Respondent No. 2, which would then sub-contract it to Keller – all for the very same work.

5. Respondent No. 2 and Keller executed a Work Order dated October 30, 2019, which is contained at Page No.102 of the Section 11 Petition. The arbitration agreement in that Work Order is contained at Page No.109 of the Section 11 Petition. Another Work Order pertaining to the very same work and activity was subsequently executed between Respondent No. 1 and Keller on November 15, 2019. The arbitration agreement in that Work Order is contained at Page 160 of the Section11 Petition.

6. In the interest of brevity, the arbitration agreement contained in each Work Order is not extracted here. Suffice it to say that Mumbai is stated to be the agreed venue of arbitration.

Respondents’ Objections – Territorial Jurisdiction:

7. The reference to Mumbai, in fact, lies at the heart of dealing with the issue raised by the contesting Respondents. To begin with, Mr. Abhileen Chaturvedi, Learned Counsel for Respondent No.1 submits that nothing in the activity envisaged in the Work Orders has been carried out in the State of Maharashtra. Merely because the arbitration clause refers to Mumbai as the venue of arbitration, he would submit, it would not follow that this Court has jurisdiction to exercise powers under Section 11 of the Act. Learned Counsel also submits that Respondent No.1 is not located in Mumbai and therefore, no part of thecause of action claimed against this Contesting Respondent has arisen in Mumbai. Consequently, he submits, this Court will not have jurisdiction under Section 11 of the Act.

8. Ms. Mahalakshmi Ganapathy, Learned Counsel for Respondent No.2 submits that Respondent No.2 is not privy to the arbitration agreement contained in the Work Order dated November 15, 2019, under which the work is carried out. All the work is carried out for Respondent No.1 under the Work Order executed by that Contesting Respondent. Not having privity to the Work Order between Keller and Respondent No. 1, she submits, nothing has been done under the Work Order signed by Respondent No.2. Therefore, disputes and differences could only arise under the Work Order to which Respondent No. 2 is not a party. Learned Counsel insinuates that the Work Order executed by Respondent No.2 needs to be proved. According to her, the letterhead that has been annexed in the Affidavit-in-Reply filed by Respondent No.2 is different in design and some of the contents, from the letterhead on which the Work Order dated October30, 2019 signed by Respondent No.2 as annexed in the Section 11 Pet