Mere Signing Of The Award At A Place Cannot Be The Determinative Factor For Ascertaining The Place Of Arbitration: Bombay High Court

The Bombay High Court has ruled that mere signing of the arbitral award at a place cannot be the determinative factor for ascertaining the place of arbitration. It added that if there is no agreement between the parties regarding the place of arbitration and the arbitrator has not determined the place of arbitration, the overall circumstances of the case would have to be taken into consideration to reach a conclusion regarding the same. The bench of Justice Manish Pitale was dealing with a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), which was disputed on the ground that the court lacked jurisdiction to entertain the same. The court observed that there was a lack of material to show agreement between the parties with respect to the place of arbitration, as contemplated under Section 20(1) of the A&C Act. Further, in such a situation, the arbitrator could have determined the place of arbitration under Section 20(2) of the A&C Act, which he had failed to do so. Relying on the Bombay High Court’s decision in Omprakash S/o. Ramnivas Varma and Ors. vs. Vijay Dwarkada Varma, 2020(5) Mh.L.J. 184, the bench relied on the conduct of the parties, including the fact that the Section 9 petition was filed before the court in Thane, and concluded that it did not have the jurisdiction to entertain the challenge under Section 34. The petitioner/ award debtor, Gurumahima Heights Co-operative Housing Society Ltd, filed a petition under Section 34 of the A&C Act before the Bombay High Court, challenging an arbitral award passed in favour of the respondent, M/s. Admirecon Infrastructure Pvt Ltd. The respondent, Admirecon, disputed the maintainability of the petition on the ground that the High Court did not have the jurisdiction to entertain the petition. It contended that except two hearings, all the other hearings in the arbitral proceedings had taken place at Navi Mumbai. It further submitted that the building of the petitioner- society, in respect of which contract was awarded to the respondent, was also situated in Navi Mumbai. It added that since the application under Section 9 of the A&C Act was filed before the court at Thane, as per Section 42 of the A&C Act, the Section 34 petition ought to have been filed before the said court at Thane. To this, the petitioner- society averred that the arbitral award signed by the arbitrator recorded the date of its pronouncement and the place as Mumbai. Therefore, the place of the arbitral proceedings and the award was Mumbai, due to which the Bombay High Court had the jurisdiction to entertain the Section 34 petition. The High Court observed that as per Section 20 of the A&C Act, the parties are free to agree on a place of arbitration, failing which the arbitral tribunal determines the place of arbitration, having regard to the circumstances of the case and convenience of the parties. As per Section 20, the arbitral tribunal can meet at any place that it considers appropriate and the same has been interpreted as the “venue” of arbitration. It further reckoned that Section 42 of the A&C Act starts with a non-obstante clause, specifying that where an application under Part I of the A&C Act is filed in a court in respect of an arbitration agreement, that court alone has jurisdiction over the arbitral proceedings and all subsequent applications arising out of such agreements and the arbitral proceedings. Further, it specifically provides that no other court shall have jurisdiction. The bench observed that in the case of Omprakash S/o. Ramnivas Varma (2020), the Bombay High Court was dealing with a case where there was nothing to show an agreed place of arbitration and where the arbitrator had not determined the place of arbitration. In such a situation, the court had held that the conduct of the parties could also be a factor for determining or ascertaining the place of arbitration, which in turn would lead to ascertaining which court would have the jurisdiction to entertain the challenge under Section 34. Referring to the relevant clauses in the contract executed between the parties, the bench noted that the same did not provide for a place of arbitration, or place exclusive jurisdiction on any particular court. “Clause 5 of the Articles of Agreement / Contract does specify that all disputes between the parties shall be deemed to have arisen at Navi Mumbai. This can be taken as a relevant factor, but admittedly, this specific clause was not invoked by the respondent while the parties went to arbitration,” the court further observed. Perusing the facts of the case, the court said, “The aforementioned relevant factors lead at least to one conclusion that there is lack of material to show agreement on the part of the parties as to the place of arbitration, as contemplated under Section 20(1) of the said Act. In such a situation, under Section 20(2) of ...

Mere Signing Of The Award At A Place Cannot Be The Determinative Factor For Ascertaining The Place Of Arbitration: Bombay High Court

Parina Katyal

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