The Supreme Court on Wednesday (September 23) has held that mere conduct of arbitral proceedings at a particular place does not, by itself, determine the juridical “seat” of arbitration, in the absence of an express designation or agreement between the parties.

A Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva set aside the Orissa High Court's judgment, which had deemed Cuttack as the 'seat' of an arbitration merely because Cuttack was a 'venue' of an arbitration, however there was no express designation or an arbitration clause in an agreement between the parties designating Cuttack as the seat of the arbitration.

“The High Court has clearly erred in also holding the 'Seat' as Cuttack because the disputes were referred to the Arbitrator by the High Court which has its seat at Cuttack. Merely because the seat of the High Court is at Cuttack would not confer jurisdiction on the District or Commercial courts at Cuttack. The High Court has clearly erred in restricting the jurisdiction of the High Court to the District within the territory of which the High Court is physically situated, i.e. Cuttack.”, the Court observed.

The dispute arose from a contract for works at Sundargarh District, Orissa. Although the arbitration proceedings were conducted at Cuttack after the High Court at Cuttack appointed the arbitrator under Section 11(6), neither the parties' agreement nor the High Court's order appointing the arbitrator designated Cuttack as the seat.

When a petition under Section 34 of the Act was filed by the award debtor-Appellant before the Sundargarh District Judge, the High Court interfered with the Appellant's Section 34 petition in a Writ Jurisdiction and dismissed the Appellant's Section 34 petition as non-maintainable before the Sundargarh District Judge on jurisdictional grounds.

In essence, the fulcrum of the decision of the High Court is based on the fact that the appointment of the Arbitrator was made by the High Court in exercise of its jurisdiction under Section 11(6) of the Act and that, as the seat of the High Court is at Cuttack, Cuttack must be ordered as the juridical seat of arbitration and the courts at Cuttack alone are vested with exclusive jurisdiction to entertain any application under Part I of the Act, including a petition under Section 34 of the Act.

Aggrieved by this decision, the award debtor moved to the Supreme Court.

The judgment authored by Justice Sachdeva rejected the High Court's view that its appointment of the arbitrator at Cuttack meant that courts at Cuttack alone had jurisdiction over the Section 34 challenge.

It observed that a High Court exercises jurisdiction over the entire State and that Commercial Courts/District Courts within its territorial jurisdiction can entertain a Section 34 petition, unless the parties have agreed otherwise or a specific seat has been determined.

The Court further held that Section 42 of the Arbitration Act did not bar Section 34 petitions before the Sundargarh District Court, as the earlier Section 11 proceedings were before the High Court, not the District Court at Cuttack.

“A High Court of a State exercises jurisdiction over the entire State and as such all the Commercial Courts/District Courts (where no commercial Court has been set up) within the territorial jurisdiction of the High Court would have jurisdiction to entertain a petition under section 34 of the Act, unless there is an agreement of the parties to the contrary or a specific determination of a 'Seat' in the order of appointment or any such stipulation/direction by the Court.”, the Court said.

As a result, the appeal was allowed, thereby restoring the Appellant's Section 34 petition on the file of the Sundargarh District Judge.

“In view of the above, the appeal is allowed and the impugned order of the High Court dated 20.06.2025 holding that the petition filed by the Appellants, under Section 34 of the Act before the Court of the District Judge, Sundargarh, was not maintainable for want of jurisdiction and also being time barred is not sustainable and is accordingly set aside. The Petition under Section 34 of the Act, filed by the Appellants, is restored on the file of the District Judge, Sundargarh, who shall decide the same in accordance with law expeditiously.”, the Court ordered.

Cause Title: MAHANADI COALFIELDS LTD & ORS. VERSUS M/S GSCO (GURMEET SINGH AND COMPANY) INFRASTRUCTURE PVT. LTD.

Citation : 2026 LiveLaw (SC) 978

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Appearance:

For Petitioner(s) Mr. R. Venkataramani, Attorney General for India Mr. Soumyajit Pani, Adv. Mr. Aishwary Bajpai, Adv. Mr. Varun, Adv. Mr. Siddharth Jain, AOR

For Respondent(s) Mr. Ashok Panigrahi, Sr. Adv. Mr. Avijit Patnaik, Adv. Ms. Shuvra Mohapatra, Adv. Mr. Raja Kumar Pati, Adv. Mr. Shreyan Das, Adv. Mr. Aditya Narayan Das, Adv. Ms. Mohini Priya, AOR