Venue Is Construed As Seat In Absence Of Contrary Indicia, If Arbitration Agreement Only Mentions 'Venue': Allahabad HC

The Allahabad High Court has held that when only one place is mentioned in the arbitration agreement and is termed as “venue”, the same is to be treated as the “seat” also, unless something contrary is mentioned in the agreement.“If the arbitration agreement mentions only one place and even if it is termed as the 'venue', then unless there is a contrary indicia the 'venue' is construed as the 'seat',” held Justice Jaspreet Singh. Applicant filed an application for appointment of arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996 before the Allahabad High Court. Counsel for respondent raised an objection regarding the jurisdiction of the High Court on grounds that the parties had agreed to vest the jurisdiction in Courts at Mumbai, excluding jurisdiction of all other Courts. It was also stated that the 'seat' of arbitration, as decided by the parties, is also Mumbai. Per contra, counsel for applicant pleaded that only the 'venue' was recorded as Mumbai and the parties had not agreed for Mumbai to be the 'seat' of arbitration. it was further argued that exclusive jurisdiction have been conferred on Courts in Mumbai for non-arbitrable disputes and since no cause of action has arisen in Mumbai, the Courts there do not have jurisdiction. Clause 21 of the agreement reads as “…The arbitration proceedings shall be held in Mumbai and shall be conducted in the English language….”Clause 22 reads as "this agreement will be governed by and construed in accordance with the laws of India and shall be subject to the exclusive jurisdiction of the courts at Mumbai only" The Court observed that in Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd. & others the Apex Court held that where 'seat' of the arbitration is, the Court there will have exclusive jurisdiction over the arbitral proceedings. Further, in B.G.S. S.G.S. Soma JV v. NHPC Limited the Supreme Court held that, in absence of contrary intentions, the venue chosen by the parties will also be the seat of the arbitration. Justice Singh held that the parties had agreed for arbitration to be held in Mumbai and exclusive jurisdiction was vested with the Courts at Mumbai. Since no contrary clause was present in the arbitration agreement, the Court held that Mumbai was chosen as the 'seat' of arbitration by the parties. “In light of the aforesaid, this Court is of the clear view that the Courts at Mumbai would have the jurisdiction as the parties agreed Mumbai to be the 'seat'. Moreover, even it its treated to be the 'venue' but then in absence of any contrary indicia coupled with the exclusive jurisdiction clause, the venue is treated as the 'seat' as held by the Apex Court and once the 'seat' has been fixed then all proceedings relating to the said arbitration would be held within the jurisdiction of that Court.”Accordingly, the application for appointment of arbitrator at the Allahabad High Court was held to be not maintainable. Case Title: Devi Prasad Mishra v. M/S Nayara Energy Limited (Earlier Essar Oil Limited) Thru Auth. Signatory/ Managing Director [CIVIL MISC. ARBITRATION APPLICATION No. - 2 of2024] Read Also | Determining 'Seat' In International Arbitration : Supreme Court Takes Shift From 'Closest Connection Test', Says Express Designation Of Place MattersClick Here To Read/Download Order

Venue Is Construed As Seat In Absence Of Contrary Indicia, If Arbitration Agreement Only Mentions 'Venue': Allahabad HC

Upasna Agrawal

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