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IN THE HIGH COURT OF DELHI
Anup Jairam Bhambhani, J.
Meenakshi Nehra Bhat - Appellant
Versus
Wave Megacity Centre Private Limited - Respondent
Arb.P. 706 of 2020
Decided On : 09-11-2022
JUDGMENT
Anup Jairam Bhambhani J. By way of the present petition under section 11(6) of the Arbitration & Conciliation Act 1996 (`A&C Act' for short), the petitioners seek appointment of an arbitrator to adjudicate upon the disputes that are stated to have arisen with the respondent from Retail Space Allottees Arrangement dated 08.10.2014.
2. Mr. Navdeep Singh, learned counsel for the petitioners has drawn the attention of this court to clause 13 of the agreement which comprises the arbitration agreement between the parties; and contemplates reference of disputes between them to arbitration in accordance with the A&C Act.
3. Considering the somewhat discordant note in the arbitration clause contained in the agreement, the provision is extracted herein-below in-extenso:
"13. ARBITRATION
All or any dispute arising out of or touching upon or in relation to the terms of the Application Form/this Arrangement or its termination, including the interpretation and validity thereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussion failing which the same shall be settled through Arbitration. The Arbitration proceedings shall be governed by the Arbitration & Conciliation Act, 1996, or any statutory amendments, modifications thereof the time being in force, The Arbitration Proceedings shall be held at the Corporate Office of the "Developer" alone in New Delhi by a Sole Arbitrator who shall be appointed by the "Developer", or any person nominated by it. The Allottee(s) hereby confirms that he shall have no objection to this appointment, nor will they challenge the same on the ground that Sole Arbitrator is Developer's nominee. However, the "Developer" assures the Allottee(s) that such Arbitrator shall be independent and impartial, who will not have any concern with the outcome of the case or Award passed by the Sole Arbitrator. The Arbitration proceeding shall be held at New Delhi and the Courts at Gautam Budh Nagar, Uttar Pradesh shall, to the specific exclusion of all other courts, alone have the exclusive jurisdiction in all matters arising out of/or concerning the Application Form/this Arrangement, regardless of the place of execution of this Arrangement. This will be without prejudice to the territorial and statutory jurisdiction of Allahabad High Court."
(emphasis supplied)
4. For completeness, it may be recorded that a separate clause 14, titled 'Applicable Laws and Jurisdiction' is also contained in the agreement, which it is also necessary to notice, and which reads as follows:
APPLICABLE LAWS AND JURISDICTION
"All agreements between parties shall be construed, interpreted and applied in accordance with and shall be governed by the Laws of India".
5. As per the record, the petitioners invoked arbitration vide Notice dated 08.01.2020; to which the respondent sent reply dated 05.02.2020; whereafter further communications were also exchanged between the parties.
6. Notice on this petition was issued on 04.12.2020; in response to which the respondent filed reply dated 17.02.2021. Rejoinder dated 05.07.2021 to the reply has also been filed by the petitioners. Both parties have also filed their written submissions in the matter to supplement the oral arguments made.
7. While the principal contention raised by learned counsel for the petitioners is that since the agreement contains an arbitration clause, which clause specifies that arbitration proceedings are to be conducted at a `venue' in New Delhi, therefore this court should entertain, decide and allow the present petition.
8. On the other hand, the primary objection raised on behalf of the respondent is that on a plain reading of the arbitration clause, the present petition ought to have been filed before the Allahabad High Court since the arbitration clause specifies that the Allahabad High Court will have "territorial and statutory" jurisdiction over the agreement; and therefore this court cannot exercise territori
The designation of a location for arbitration proceedings does not establish the seat of arbitration, impacting the court's territorial jurisdiction over related petitions.
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.
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 main legal point established in the judgment is that the venue of arbitration does not confer exclusive jurisdiction on the courts at that venue. Territorial jurisdiction is determined based on t....
The designation of 'venue' in an arbitration clause does not imply the 'seat' of arbitration, which must be expressly specified; exclusive jurisdiction remains with civil courts at the location defin....
The court upheld that a specific arbitration venue in a contract designates the juridical seat, prevailing over general jurisdiction clauses, confirming the validity of the arbitration agreement.
The court upheld party autonomy, determining that the High Court has jurisdiction to appoint a Sole Arbitrator even with an exclusive jurisdiction clause designating Gurugram as the venue.
Point of law : Seat of Arbitration - What constitutes the ‘seat’ of arbitral proceedings - the intention of the parties is germane and that can be gathered from Contract.
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