2026 Supreme(Online)(Del) 81

IN THE HIGH COURT OF DELHI AT NEW DELHI
Jasmeet Singh, J
SJVN Ltd – Appellant
Versus
Patel Gammon Joint Venture – Respondent
O.M.P. (COMM) 9/2017

An arbitral tribunal's interpretation of contractual provisions is binding if plausible. Furthermore, where an agreement specifies multiple venues for convenience, these do not equate to the juridical seat; an explicit exclusive jurisdiction clause in the contract constitutes a superior indication of the agreed supervisory forum.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 - Challenge to Arbitral Award - Scope of judicial interference - Court exercising jurisdiction under this provision cannot sit in appeal over an arbitral award - Re-assessment of factual findings or evidence lies outside the scope of judicial review - Award can be set aside only on specific grounds including contravention of fundamental policy or patent illegality. (Paras 36, 37)

(B) Seat vs. Venue - Designation of a place as a venue does not establish the seat of arbitration when the contract simultaneously provides an exclusive jurisdiction clause, especially where multiple venues are mentioned - A contractual stipulation of multiple venues for convenience does not confer supervisory jurisdiction upon the courts at those locations - An exclusive jurisdiction clause in the contract operates as a contrary indicia, effectively designating the seat of arbitration. (Paras 57, 58, 62, 65, 66, 67)

(C) Contract Interpretation - Arbitral tribunal is the master of construction of the terms of the contract - A court must not interfere with an interpretation unless it is so perverse that it shocks the judicial conscience or is based on no evidence - Construction of ambiguous terms through the rule of contra proferentum is permissible where interpretation is needed. (Paras 43, 47, 53)

Facts of the case:
The petitioner awarded a contract for civil construction works. The contract contained an arbitration clause providing three potential venues for proceedings, alongside a separate clause in the particular conditions of the contract conferring exclusive jurisdiction to the courts of a specific state. A dispute arose regarding the payment for haulage of excavated material beyond a certain distance. The arbitral tribunal decided in favour of the respondent, allowing the claim. The petitioner challenged the award, contending that the tribunal misinterpreted the contract and that the award was patently illegal, while also challenging the territorial jurisdiction of the instant court.

Findings of Court:
The court upheld the merit of the arbitral award, finding that the tribunal’s interpretation of the contract was plausible, consistent with the evidence, and not patently illegal. However, the court concluded that it lacked the territorial jurisdiction to entertain the petition because the contract’s exclusive jurisdiction clause prevailed over the venue-driven arbitration clause. Despite the lack of jurisdiction, the court decided the matter on merits as there had been significant pendency.

Issues: Whether the court has territorial jurisdiction when the contract provides multiple venues for arbitration and a separate clause conferring exclusive jurisdiction to a different court; whether the arbitral award, in interpreting contract provisions regarding haulage, suffers from patent illegality or is contrary to the terms of the contract.

Ratio Decidendi: The arbitral tribunal’s interpretation of contractual terms is binding if it is a plausible view based on the material on record. Where a contract contains an exclusive jurisdiction clause that is meant to override general conditions, and where venue clauses are provided merely for convenience without designating a single seat, the exclusive jurisdiction clause prevails as the definitive intent of the parties.

Result: Petition dismissed for lack of territorial jurisdiction, reinforcing the validity of the arbitral award on merits.