Venue of arbitration does not equate to its jurisdictional seat; petitions under the Arbitration Act must be filed where arbitration took place, as established in prior Supreme Court rulings.

JUDGMENT :

Vikram Aggarwal, J.

The appellant (M/s Parsvnath Developers Limited) assails the order dated 06.08.2022 passed by the Court of learned District Judge Rewari, vide which the application preferred by the respondents under Order VII Rule 10 read with Section 151 of the Code of Civil Procedure, 1908 (for short the “CPC”) read with Section 2 (1)(e)(i) of the Arbitration and Conciliation Act, 1996 (for short the “1996 Act”) seeking return of the objection petition preferred by the present appellant under Section 34 of the 1996 Act was allowed and the petition preferred under Section 34 was ordered to be returned for being presented in the competent Court.

2. The appeal raises an interesting, often debated but short question, for which extremely lengthy arguments were addressed by both sides. The question to be decided is as to whether the petition preferred by the appellant under Section 34 of the 1996 Act challenging the Award dated 21.09.2020 passed by the Arbitral Tribunal would be maintainable at Rewari or the same would have to be filed at Delhi, where the arbitration proceedings were conducted. The issue of “venue” and “seat” has once again been raised by the parties which this Court shall proceed to discuss and answer.

3. A collaboration agreement (Annexure A-2) was executed on 27.10.2005 between the respondents, who were owners in possession of land measuring approximately 54 acres, situated in Village Dharuhera, District Rewari and the appellant (M/s Parsvnath Developers Limited) being a developer. It was agreed that the land in question would be developed by the developer into a residential colony on mutually agreed terms. Various terms and conditions were agreed upon between the parties.

4. It appears that as is the case in many such other similar agreements, certain issues cropped up between the parties leading to the filing of a petition under Section 9 of the 1996 Act (Annexure A-3) by the respondents. The said petition was opposed by way of reply (Annexure A-4). Ultimately, the petition was allowed vide order dated 04.11.2015 (Annexure A-5) holding as under:

“25. This, however, will not mean that the court will not take any interim measure. To my mind, the purpose can be served by issuing following directions:-

(i) The respondent, in order to secure damages, if any, to be awarded by the arbitrator, shall not sell 10% of the residential plots falling to its share;

(ii) If the respondent wants to transfer/alienate the project to a third party after leaving aside 10% of the residential plots in terms of condition No.1 above, in that eventuality, there shall be a condition in agreement to be executed with that third party that it shall be bound to complete the development work and to discharge other obligations under the collaboration agreement. Such a condition shall, however, be not necessary while selling individual plots in retail. In other words, the condition will be necessary when the entire project or a major part of the project is to be alienated en-block.

26. The petition stands disposed of in terms of the above directions which shall hold good for a period of 90 days from today within which arbital proceedings have to commence or till any further directions are issued by the arbital tribunal whichever is later. Needless to say that in case the arbital proceedings are not commenced within 90 days, the directions will cease to operate.”

It would be significant to mention here that till this stage, no issue of jurisdiction of the Courts had cropped up between the parties.

5. It is apparent that the project ran into rough