Arbitration clause specifying venue at place or neutral country with exclusive jurisdiction elsewhere constitutes contrary indicia; not seat. Post-amendment, High Court jurisdiction for international arbitration where first applications filed, per Section 42.

ORDER :

1. The revision petitioner had filed Arb.O.P.No.103 of 2019 before the Principal District Judge, Salem, under Section 34 of the Arbitration and Conciliation Act, 1996 (the A & C Act) challenging arbitral award dated 28.02.2019. The first respondent herein filed I.A.No.3 of 2020 under Order VII Rule 10 of the Code of Civil Procedure, 1908 (the CPC) and other relevant provisions to return the Section 34 petition for presentation before the court of competent jurisdiction at New Delhi. By order dated 02.12.2021, said petition was allowed and the revision petitioner was permitted to re-present the petition before the court of competent jurisdiction in New Delhi within three months from the date of receipt of the order. Said order in I.A.No.3 of 2020 forms the subject of this revision petition.

2. The contentions of Mr. R.Vidhya Shankar, learned counsel for the revision petitioner, may be summarised as under:

(i) Clause 10.1 of the contract provides that courts at Salem/Chennai, India shall have exclusive jurisdiction. Therefore, the petitioner was entitled to prosecute the Section 34 petition before the Principal District Judge, Salem.

(ii) An application under Section 9 of the A & C Act was filed earlier at Salem. No jurisdictional objection was raised in the counter affidavit.

(iii) The conduct of arbitral proceedings at New Delhi does not lead to the inference that New Delhi was accepted as the seat of arbitral proceedings. BGS SGS Soma JV v. NHPC Limited,  2019 SCC OnLine 1585 (BGS SGS Soma), dealt with the interplay between Section 42 and the designation of seat/venue. In paragraph 59, the Supreme Court held that Section 42 may be pressed into service where no seat is designated by the agreement or the agreement provides only for a convenient venue. In paragraph 82, the Court held that venue should not be construed as seat if there are contrary indicia.

(iv) There are two contrary indicia. First, the clause enabling the venue to be at New Delhi or a neutral country. Secondly, the clause providing for the exclusive jurisdiction of courts at Salem/Chennai, India. The judgment of the Supreme Court in BBR (India) Private Limited v. S.P. Singla Constructions Private Limited,  (2023) 1 SCC 693, particularly paragraphs 32 to 37, is also relied upon in this regard.

(v) Section 42 of the A & C Act opens with a non-obstante clause. It uses the expression “a Court”. This is in contrast with other provisions of the A & C Act wherein the expression “the Court” is used. The application under Section 9 was filed prior to the amendment to Section 2(1)(e). Considering these aspects, the Principal District Judge, Salem retains jurisdiction in relation to all arbitrations that commenced on or before 23.10.2015 notwithstanding the amendment to Section 2(1)(e).

3. Learned counsel for the first respondent, Mr.T.M.Hariharan, responded as under:

(i) Clause 10.1 uses the mandatory word 'shall' with regard to the venue being New Delhi. Therefore, if arbitral proceedings are held in India, the contract does not enable the conduct thereof at any place other than New Delhi. The arbitral proceedings were held at New Delhi from start to finish and the award was pronounced at New Delhi.

(ii) Therefore, New Delhi was accepted by the parties as the seat of arbitration. In support of the contention that the specification of a venue may be construed as seat, the following judgments were relied upon:

(a) Indus Mobile Distrib