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Two-Year Delay Dooms State's Challenge to Arbitral Seat Fixation:
The has dismissed a writ petition filed by the , which sought to overturn an arbitral tribunal’s decision to fix Delhi as the . A single bench of Justice Ananda Sen ruled that the Department’s prolonged silence of over two and a half years amounted to of its right to object, effectively cementing Delhi’s authority over the proceedings.
Background: A Road Project, a Disputed Clause
The dispute originates from a agreement between the and for the rehabilitation of the Barhet-Sahebganj section of a state road project. The arbitration clause in the General Conditions of Contract (Clause 20.6(b)(iii)) specified that arbitration hearings would be held at the Conference Building at Mantralaya in Ranchi. Critically, the clause did not designate a juridical “seat” of arbitration—it only fixed a .
When a dispute arose, the matter was referred to a three-member arbitral tribunal. At its first procedural hearing on , the tribunal—in the presence of both parties’ representatives—issued No. 1, which unambiguously fixed the “” at Delhi. The , meanwhile, was left to be decided from time to time.
The State’s Silence and Subsequent Objection
For nearly two and a half years, the Road Construction Department raised no objection to this order. It participated in the arbitration without protest. The challenge only emerged after Ramky Infrastructure approached the under , seeking an extension of the tribunal’s mandate. Although the State questioned the ’s , it accepted the extension granted and did not appeal the ’s observation that Delhi remained the seat.
Only thereafter did the State file an application under before the tribunal, arguing that the seat should be Ranchi because the agreement’s clause should be read as the seat. The tribunal rejected this application through No. 30, prompting the State to file the present writ petition.
Legal Analysis: Seat Distinguished from
Justice Sen drew a sharp distinction between “seat” and “” of arbitration—a distinction well-established in Indian arbitration jurisprudence. Citing the ’s landmark ruling in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012), the judgment emphasised that the is the “” that determines the governing procedural law and the courts that exercise . Unlike a , the seat remains static throughout the proceedings.
The court further referenced BBR (India) Private Limited v. S.P. Singla Constructions Private Limited (2023) to underscore that “the seat once fixed by the Arbitral Tribunal under Section 20(2), should remain static and fixed, whereas the ‘’ of arbitration can change.”
Applying this framework, the court found that the agreement did not fix a seat, and the tribunal was within its powers under to determine the seat, having regard to the circumstances. The decision to fix Delhi was not contrary to any clause of the contract.
and : The Decisive Factor
The court held that the State’s conduct amounted to a clear under , which provides that a party who knows of a non-compliance yet proceeds with arbitration without undue delay forfeits the right to object. Justice Sen noted:
“The order fixing the at Delhi, was passed in presence of both the parties and this order was within the knowledge of the State for a petty long period. The State has did not challenge the same, rather continued with the proceeding. This amounts to by the State on the issue of fixing the is at Delhi. Further by keeping silent for petty long time, they have waived their right in terms of Section 4 of the .”
The court also found it inconsistent for the State to accept the ’s extension order while simultaneously challenging its finding on the seat. “When the question of jurisdiction is an issue, the State can not accept the part of the order passed by the and oppose the other,” it observed.
Final Decision
Dismissing the writ petition, the court declined to interfere with the arbitral tribunal’s No. 30. The result is that Delhi remains the , and the retains over the proceedings. The judgment reinforces the principle that litigants cannot sleep on their rights and then seek to upset settled arrangements halfway through arbitration.
