The Supreme Court has held that once the seat of arbitration is expressly designated by agreement of the parties, that seat becomes the juridical home of arbitration and operates akin to an exclusive jurisdiction clause. Consequently, only the courts of the seat have supervisory jurisdiction over arbitral proceedings and challenges to the award. The venue of hearings or the place where the award is rendered does not alter the seat and does not confer jurisdiction on courts of that place, unless the seat is expressly changed by agreement of the parties.
In the facts of the present case, since Srinagar had been expressly fixed as the seat of arbitration and New Delhi only as the venue, the courts at Srinagar alone had jurisdiction to entertain the Section 34 challenge. The order returning the petition on the ground that the award was rendered at New Delhi was therefore unsustainable and was quashed.
A Two-Judge Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe observed that the distinction between the seat and venue of arbitration is firmly embedded in arbitral jurisprudence, and that the core issue was whether conduct of proceedings and rendering of the award at New Delhi could confer jurisdiction on Delhi courts despite the express designation of Srinagar as the seat.
The Bench reiterated that the seat of arbitration is the juridical home or legal place of arbitration; it determines the curial law governing the arbitral process and identifies the court exercising supervisory jurisdiction. Once the seat is designated by agreement of the parties, courts of that place alone have exclusive jurisdiction over all proceedings arising out of the arbitration, including challenge to the award.
The Bench also observed that the venue is only a geographical location chosen for convenience for hearings, examination of witnesses, or meetings of the tribunal. It does not confer jurisdiction and does not by itself alter or determine the seat. Mere conduct of arbitral proceedings or rendering of the award at a place different from the designated seat does not confer jurisdiction on courts of that place.
Accordingly, the Bench noted that the order dated March 26, 2016 expressly recorded, on agreement of the parties, that the seat of arbitration shall be Srinagar and the venue shall be New Delhi. The surrounding circumstances also reinforced Srinagar as the seat, since the contracts were executed in Jammu & Kashmir, the works were to be carried out there, the arbitration was initiated there, and the High Court at Srinagar had appointed the arbitrator.
The Bench rejected the respondent’s contention that the recital in the award showing New Delhi as the place of arbitration was determinative of the seat. It held that the seat is governed by the agreement of the parties, not by any stray recital in the award, and once fixed, it remains immutable unless altered by express agreement.
Lastly, the Bench held that the High Court erred in returning the Section 34 petition. Since Srinagar was consciously designated as the seat of arbitration, courts at Srinagar alone had supervisory jurisdiction. Accepting the High Court’s approach would render the concept of juridical seat otiose and create uncertainty by allowing place of hearing or place of signing of the award to determine jurisdiction.
Briefly, the appellant, Jammu and Kashmir Economic Reconstruction Agency, engaged the respondent contractor for execution of four road infrastructure projects in Jammu & Kashmir under agreements executed on March 31, 2008. Disputes arose regarding contractual claims, following which the respondent invoked arbitration on April 18, 2014 and filed four Section 11 applications before the High Court of Jammu & Kashmir and Ladakh at Srinagar for appointment of an arbitrator.
The High Court initially appointed a sole arbitrator on July 30, 2015, which was later modified by the Supreme Court on December 07, 2015 by appointing Justice S.S. Nijjar as sole arbitrator. By order dated March 26, 2016, the Arbitral Tribunal, with consent of the parties, fixed Srinagar as the seat of arbitration and New Delhi as the venue. After the demise of the arbitrator, the High Court appointed Justice Amitava Roy on September 17, 2021 under Sections 14 and 15 of the Act to continue the proceedings. The arbitral award was delivered on January 15, 2024 at New Delhi, and the appellant’s Section 33 applications were decided on March 12, 2024.
The appellant thereafter filed a petition under Section 34 of the Jammu & Kashmir Arbitration and Conciliation Act, 1997 before the High Court in relation to the Shahdra Project award. The respondent raised a preliminary objection on territorial jurisdiction, and by order dated July 08, 2024, the High Court returned the petition holding that since the arbitral proceedings were conducted and the award was rendered at New Delhi, courts at New Delhi alone had jurisdiction.
