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IN THE HIGH COURT OF DELHI
V. Kameswar Rao, J.
Goyal MG Gases Private Limited - Appellant
Versus
Steel Authority of India - Respondent
OMP (COMM) 536 of 2020
Decided On : 18-11-2020




Parties cannot alter the seat of arbitration without a written amendment, and jurisdiction remains with the designated seat's courts, irrespective of where proceedings are held.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Challenging an arbitral award - The arbitration clause in the agreement designated Durgapur, West Bengal as the seat of arbitration, limiting jurisdiction to its courts exclusively - The court found that alteration of the seat was not agreed upon in writing, making the New Delhi venue merely for convenience. (Paras 2, 16, 30)

(B) Jurisdiction - The courts at the seat of arbitration hold exclusive jurisdiction over disputes under the arbitration agreement - A mere factual occurrence of the award in New Delhi does not override the pre-established jurisdictional seat. (Paras 8, 12, 20)

(C) Judicial Precedents - Case law was cited to affirm that change in venue does not equate to change in the juridical seat of arbitration, emphasizing the distinction in arbitration law. (Paras 4, 5)

Facts of the case:
The petition was filed challenging the award rendered in New Delhi while the arbitration agreement designated Durgapur as the juridical seat. The respondent contested the jurisdiction of the High Court based on the clear terms of the arbitration clause.

Findings of Court:
The court affirmed that the seat of arbitration remained in Durgapur, as no valid change was documented to alter this.

Issues: The main issues included the validity of the exclusivity of Durgapur's jurisdiction and whether the proceedings held in New Delhi affected this designation.

Ratio Decidendi: The court held that parties cannot change the agreed-upon seat of arbitration without a written amendment signed by both parties, thus rejecting the maintainability of the petition in the High Court.

Result: Petition dismissed; jurisdiction is with the courts at Durgapur.

Table of Content
1. jurisdiction defined by arbitration agreement. (Para 1 , 2 , 3)
2. exclusive jurisdiction rests with designated seat. (Para 4 , 5 , 6 , 7)
3. disputes from arbitration proceedings initiated in specific venue. (Para 8 , 9 , 10 , 11 , 12)
4. amendments to arbitration clauses require written consent. (Para 20 , 21)
5. judicial interpretation of weight of evidence in jurisdiction disputes. (Para 22 , 23 , 24 , 25)
6. venue of arbitration synonymous with juridical seat under agreement. (Para 26 , 27 , 28 , 29 , 30)
7. final determination on court jurisdiction based on arbitration agreement. (Para 31 , 32 , 33 , 34)

JUDGMENT

V. Kameswar Rao, J. (Oral)--This petition has been filed under Section 34 of the Arbitration & Conciliation Act, 1996 (`Act of 1996', for short) challenging the Award dated May 05, 2020.

2. A preliminary objection has been taken by Mr. Sandeep Sethi, Ld. Sr. Counsel appearing for the respondent that this petition is not maintainable in this Court. In this regard, he stated that the Agreement dated July 20, 2005 (`Agreement', for short) between the parties contains an arbitration clause in Article 25.4 (`arbitration clause', for short) which clearly states that (i) the arbitration proceedings shall be held in Durgapur, West Bengal and (ii) the Courts of Durgapur, West Bengal shall have exclusive jurisdiction over all matters of dispute. The parties have expressed their clear and unmistakable intent in writing that the juridical seat of the arbitration shall be at Durgapur, West Bengal with vesting of exclusive jurisdiction on the courts at Durgapur, West Bengal.

3. In the present case while for convenience sake, the hearing of arbitration was held at New Delhi, the juridical seat remained to be Durgapur, West Bengal as per the arbitration clause. The petitioner has failed to disclose any circumstances or any instrument in writing denoting any change in the choice of seat of the arbitration. Further, there was no agreement between the parties to alter the seat of the arbitration. The parties only chose to hold the proceedings in New Delhi for the sake of convenience. He draws the attention of the Court to Article 28.3 of the Agreement, which clearly stipulates that any amendment to the Agreement has to be in writing signed by the representatives of the parties. In the absence of any such agreement in writing, the exclusive jurisdiction and choice of seat clause contained in Article 25.4 is binding on both the parties. Hence, this Court does not have any jurisdiction to entertain the present petition. Mr. Sethi stated that the petitioner has suppressed the fact that the respondent had already invoked the jurisdiction of Commercial Court at Asansol in accordance with Article 25.4 of the Agreement, which was duly served on the petitioner on October 01, 2020.

4. It is the submission of Mr. Sethi that the Courts of the seat of arbitration shall have exclusive jurisdiction to decide petition under Section 34 of the Act of 1996. In this regard, he has relied upon the judgment of the Supreme Court in the case of BGS SGS SOMA JV vs. NHPC, (2020) 4 SCC 234. According to Mr. Sethi, change of venue does not override choice of seat under arbitration agreement. He also relied upon the judgment of the Supreme Court in the case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552: to contend that the fixation of a venue for arbitration for the sake of convenience cannot override a clear and unambiguous choice of the seat under the arbitration agreement itself. He stated that the clear intent of the parties as stated in the arbitration clause in the absence of any ambiguity shall be the determinative test of the seat of arbitration. Mr. Sethi has drawn the attention of the Court to Section 20 of the Act of 1996 which incorporates the principle of party autonomy as the only determinant of the juridical seat of an arbitration. Section 20 (3) provides the Tribunal choice of venue f

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