Territorial jurisdiction for arbitration-related petitions depends on parties' consent and repeated conduct, reaffirming the initially agreed seat despite suggestions of changes.

Judgement :

SOMASEKHAR SUNDARESAN, J.

Context and Factual Background :

1. Commercial Arbitration Petition (L) No. 18764 of 2025 is a Petition filed under Section 29 -A of the Arbitration and Conciliation Act, 1996 (“the Act”), seeking extension of mandate of the Arbitral Tribunal in connection with arbitration proceedings conducted by the Learned Sole Arbitrator right since November 2017.

2. The phrase “peculiar facts of the case” is so routinely used that it tends to not speak to real peculiarity. However, in the instant case, the factual matrix arising out of the conduct of the parties, renders this case, a true tale of the peculiar.

3. The parties executed an Agreement for Sale dated March 6, 2010, by which 108.9 acres of land were agreed to be sold by the Petitioners to the Respondents. Three days later, on March 9, 2010, the parties executed a Memorandum of Understanding whereby 22.9 acres of land to be acquired by the Petitioners from third parties were also agreed to be sold to the Respondents.

4. The land involved in both the agreements is located in Karjat, District Raigad. The seat of arbitration contained in both the agreements is evidently Karjat/Thane. Sometime in April 2010, an escrow agent was given the title documents pertaining to the land, to be held in escrow in order to secure the performance of the agreements. On August 22, 2015, the Petitioners terminated both the agreements. Disputes and differences broke out between the parties. Arbitration was invoked on January 25, 2016.

5. Considering the manner in which the arbitration clause is drafted, the Section 11 Court held that since the parties could not thrash out their differences on who the sole arbitrator would be, the arbitration agreement itself did not survive. However, before the Supreme Court, an arbitrator was appointed on November 6, 2017. Those arbitral proceedings are underway even today.

6. At the heart of the issues that fall for consideration is a preliminary objection as to whether this Court has territorial jurisdiction to consider the Section 29 -A Petition. The following facts collide in making the decision in this regard :

A) As seen above, the arbitration clause in the agreements, explicitly indicates the seat of arbitration as Karjat/Thane;

B) On November 27, 2017, the minutes of the meeting held before the Sole Arbitrator record that by “consent”, it is “decided” that the seat is Mumbai;

C) In the eight years during which arbitration has been underway, at least three applications under Section 29 -A of the Act have been filed by the Petitioners before the District Court, Raigad at Alibag (“District Court”) (this Court has jurisdiction over Karjat) – the first such application was allowed on April 29, 2018; and the second, on June 15, 2020. The third was filed on June 16, 2021;

D) On both occasions, i.e. April 29, 2018 and June 15, 2020, the mutual consent of the parties for extension of mandate by the District Court is writ large on the face of the record. The parties appear to have been ad idem on the territorial jurisdiction for such petitions being before the District Court;

E) On March 7, 2018, dealing with an application under Section 17 of the Act, the Learned Arbitral Tribunal had ordered status-quo and that position has continued till date;

F) On April 10, 2019, the Respondents are said to have chosen not to pursue specific performance and sue for damages instead. In view of this development, the Petitioners made an application under Se