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IN THE HIGH COURT OF DELHI AT NEW DELHI
Neena Bansal Krishna, J.
Samsung India Electronics Pvt. Ltd. – Appellant
Versus
Enn Enn Corp Limited – Respondent
Arb. P. 847 of 2022
Decided On : 04-07-2023
Arbitration - Jurisdiction - A&C Act - [Arbitration] - [Jurisdiction] - [Section 11 of A&C Act] - The court discussed the distinction between the 'seat' and 'venue' of arbitration, and concluded that New Delhi was the seat of the arbitration proceedings. The court also addressed the lack of jurisdiction argument, emphasizing party autonomy and the intention of the parties to exclude all other courts by agreeing to a specific venue for arbitration. The court appointed an arbitrator and directed the arbitration to be held under the aegis of the Delhi International Arbitration Centre.
Fact of the Case:
The petitioner sought the appointment of a Sole Arbitrator for disputes arising from a Sub-Lease Deed with the respondent. The respondent objected to the jurisdiction of the court, claiming that New Delhi was only the venue for arbitration and not the seat.
Finding of the Court:
The court found that New Delhi was the seat of the arbitration proceedings and had jurisdiction to appoint the arbitrator. The respondent's objection regarding the lack of jurisdiction was dismissed.
Issues: Jurisdiction, Seat vs. Venue of Arbitration
Ratio Decidendi: The distinction between 'seat' and 'venue' of arbitration is crucial, and the intention of the parties as reflected in the agreement determines the jurisdiction of the court. Party autonomy and the specific agreement on the venue for arbitration are essential factors in determining jurisdiction.
Final Decision: The court appointed an arbitrator and directed the arbitration to be held under the aegis of the Delhi International Arbitration Centre. The rights and contentions of the parties were left open for consideration by the arbitrator.
JUDGMENT
Neena Bansal Krishna, J.
1. The present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "A & C Act") has been filed on behalf of the Petitioner seeking appointment of a Sole Arbitrator for adjudication of disputes between the parties.
2. The Petitioner a globally recognised Company as an Industry leader in technology, entered into the Sub-Lease Deed on 31.10.2020 with the respondent, a public incorporated Company engaged inter alia, in the business of real estate, whereby the respondent agreed to sub-lease the Ground to10th Floor of the property situated at Tower D, Logix Cyber Park, C-28 and 29, Sector-62, Noida - 201 301 ("Property") for a period of 05 (Five) years w.e.f. 1.11.2020 to 31.10.2025 on a monthly rent of INR 1,50,03,452 (Rupees One Crore Fifty Lakhs Three Thousand Four Hundred Fifty-Two only) @ Rs.46/- per sq. ft.
3. In terms of Clause 4.1 of the Sub-Lease Deed, the petitioner had deposited an Interest Free Refundable Security Deposit (IFRSD) of INR 9,00,20,712 (Rupees Nine Crores Twenty Thousand Seven Hundred Twelve only) at the time of signing of Lease Deed with the respondent.
4. The petitioner Vide email dated 30.11.2021 gave the requisite written notice period of 3 months in terms of Clause 11 of the Agreement, to terminate the Sub-Lease Agreement and also stated that the premises would be vacated and the possession of property shall be handed over to the Lessor/respondent by 28th February, 2022. The notice of Termination was duly acknowledged and confirmed by the respondent vide return email dated 13 December 2021.
5. It is submitted by the Petitioner that it has been in occupation of the property for over a decade from the time it was under the ownership of the respondent's predecessor and stated that the property was maintained in excellent condition barring the natural wear and tear, for which even the Sub-Lease Deed provided leeway.
6. Further, the petitioner made a reference to the Agreement between the parties to retain the furniture and fixtures in the lease premises. However, in view of putting dispute to rest, the petitioner stated that they would get the fixtures removed and urged the respondent to refund the Security Deposit. Despite this offer, the respondent refused to return the Security Deposit by illegally retaining the Security Deposit against the payment of the purported rent and charges beyond the date of handover of the premises. Consequently, disputes have arisen between the parties with respect to the refund of security deposit.
7. Accordingly, the petitioner sent a Notice for Invocation of Arbitration dated 17.06.2022 in terms of Arbitration Clause 14 of Sub- lease Deed dated 31.10.2020 and nominated a former Judge of this Court as the Sole Arbitrator. However, the respondent vide its E-mail dated 20.06.2022 and a detailed Reply dated 28.06.2022 did not consent to the name of the Sole Arbitrator.
8. The petitioner then sent a Letter dated 05.07.2022 seeking the consent of the respondent for the appointment of the named Sole Arbitrator, in response to which the respondent suggested the name of another Sole Arbitrator. There was no consent on the name of the Arbitrator, therefore, the present petition u/s 11 of the A&C Act has been preferred for appointment of the Arbitrator.
9. The respondent in its Reply has taken the objection that this Court has no jurisdiction as no part of the cause of action in arose within the territorial jurisdiction of this Court. The dispute pertained to payment of lease rent for immoveable property situated in Noida, Uttar Pradesh i.e., Ground to 10th Floors of the Tower D, Logix Cyber Park, C-28 and 29, Sector-62, Noida-201301. The Sub-lease Deed was executed and registered in Noida, Uttar Pradesh. The respondent has its registered office in Mumbai, Maharashtra and principal place of business in Noida, Uttar Pradesh.
10. It is claimed that New Delhi was only the venue for conducting the
The jurisdiction for appointing an arbitrator lies with the court where the principal agreement was executed, as per Section 11(6), despite a venue specified in an ancillary agreement.
The distinction between 'seat' and 'venue' of arbitration is crucial, with the seat determining jurisdiction, which in this case was Ahmedabad despite the venue being New Delhi.
Point of law: Where any disputes arise between parties in respect of or in connection with the agreement then parties shall first endeavour to conciliate the disputes failing which the same shall be ....
The jurisdictional seat of arbitration was Panchkula in Haryana, and not Delhi, as the arbitrator had fixed the jurisdictional seat under Section 20(2) of the Act before any party had moved the court....
The seat of arbitration is the place where the arbitration proceedings are held and not the place where the cause of action arose. The courts at the seat of arbitration have exclusive jurisdiction to....
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