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AL b e declared by the Supreme Court in Eastemn Book Company v. D_B. Modak, (2008) 1 SCC 1 paras 61, 62 &
63

(2023) 1 Supreme Court Cases 693 : 2022 SCC OnLine SC 642

In the Supreme Court of India

(BEFORE AJAY RASTOGI AND SANJIV KHANNA, JJ.)

BBR (INDIA) PRIVATE LIMITED . . Appellant;

Versus
S.P. SINGLA CONSTRUCTIONS PRIVATE LIMITED . .
Respondent.

Civil Appeals Nos. 4130-31 of 2022+, decided on May 18, 2022

A. Arbitration and Conciliation Act, 1996 — Ss. 20 and 42 r/w S. 2(1)(e)

— Jurisdictional seat of arbitration once fixed under S. 20(2) by arbitrator —
When changeable — Subsequent hearings or proceedings at a different
location i.e. at a place other than the place first fixed by the arbitrator as
the “seat of arbitration” under S. 20(2) — Effect, if any on the seat so first
fixed under S. 20(2) — Venue and seat of arbitration — Distinguished
between
— Held, once the jurisdictional “seat” of arbitration is fixed in terms of S.
20(2), then, without the express mutual consent of the parties to the
arbitration, “the seat” cannot be changed — Such consent must be express
and clearly understood and agreed by the parties
— “The seat” once fixed by the Arbitral Tribunal under S. 20(2), should
remain static and fixed unless changed by express mutual consent of the
parties, whereas the “venue” of arbitration can change and move from “the
seat” to a new location — Venue is not constant and stationary and can
move and change in terms of S. 20(3) — Further, change of venue does not
result in change or relocation of the “seat of arbitration”
— Therefore, appointment of a new arbitrator who holds the arbitration
proceedings at a different location would not change the jurisdictional “seat”
already fixed by the earlier or first arbitrator and such latter place of
arbitration in such an event should be treated as a “venue” where
arbitration proceedings are held
— The first order passed by the Arbitral Tribunal on 5-8-2014 stipulated
that the place of the proceedings would be Panchkula in Haryana —
Subsequently the arbitrator recused himself from the matter and post
appointment of the new arbitrator, the arbitration proceedings were held at
Delhi — In the facts of the present case, held, the city of Panchkula in
Haryana would be the jurisdictional “seat” of arbitration — Further, as “the
seat” was fixed vide the order dt. 5-8-2014, the courts in Delhi would not
have jurisdiction
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63

B. Arbitration and Conciliation Act, 1996 — Ss. 20 and 42 r/w Ss. 2(1)
(e), 9 and 34 — Jurisdiction of Courts in domestic arbitrations —
Determination of, on the basis of “seat of arbitration” — Once the “seat of
arbitration” has been fixed either by the parties under S. 20(1), or, by the
arbitrator under S. 20(2), held, then the Courts at the said location alone
will have exclusive jurisdiction to exercise supervisory powers over the
arbitration and Courts at other locations would not have jurisdiction,
including courts where cause of action has arisen
The arbitration clause between the parties was silent and did not stipulate the
seat or venue of arbitration. The contract and letter of intent were executed at
Panchkula in Haryana. The corporate office of the respondent was also located at
Panchkula. However, the registered office of the appellant was located in Bengaluru,
Karnataka.
As disputes arose between the parties, the matter was referred to arbitration,
and N was appointed as the sole arbitrator. In the first sitting held on 5-8-2014, the
Arbitral Tribunal held that the venue of the proceedings would be H. No. 292, Sector
6, Panchkula, Haryana. The respondent was not present at the proceedings and had
submitted a written request for an adjournment, which request was accepted.
Neither party had objected to the place of arbitration proceedings as fixed by the
Arbitral Tribunal. Arbitration proceedings were thereafter held at H. No. 52, Sector 8
-A, Chandigarh, on 16-12-2014, where the parties were directed to complete the
pleadings, and the matter was adjourned for the framing of issues on 22-2-2015.
In the proceedings held on 29-5-2015, N recused recording that he did not want to
continue as the arbitrator for personal reasons.
Thereupon, T took over as the sole arbitrator and recorded his consent in this
regard in the first procedural order dated 30-6-2015. The order stated that the
venue of the proceedings would be Delhi.
Ultimately the award was signed and pronounced at Delhi on 29-1-2016,
whereunder the respondent was awarded a sum of Rs 3,35,86,577 with interest at
the rate of 15% p.a.
Thereafter, two proceedings were initiated. The respondent filed an application
for interim orders under Section 9 of the A&C Act, 1996 before the Additional
District Judge, Panchkula, on 7-5-2016. The appellant filed a petition under Section
34 of the A&C Act, 1996 before the Delhi High Court on 28-4-2016.
The issue that arose in the appeals was whether conducting the arbitration
proceedings at Delhi, owing to the appointment of a new arbitrator, would shift the
“jurisdictional seat of arbitration” from Panchkula in Haryana, the place fixed by the
first arbitrator for the arbitration proceedings?
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63
Answering in negative, and dismissing the appeals, the Supreme Court
Held :
The expression “seat of arbitration” is the centre of gravity in arbitration.
However, this does not mean that all arbitration proceedings must take place at
“the seat”. The arbitrators at times hold meetings at more convenient locations.
(Para 15)

) Page: 695

The expression “subject to arbitration” used in clause (e) to sub-section (1) of

Section 2 of the A&C Act, 1996 cannot be confused with the “subject-matter of the
suit”. The term “subject-matter of the suit” in the said provision is confined to Part
1. The purpose of the clause is to identify the courts having supervisory control over
the judicial proceedings. Hence, the clause refers to a court which would be
essentially a court of “the seat” of the arbitration process. Accordingly, clause (e)
to sub-section (1) of Section 2 has to be construed keeping in view the provisions
of Section 20 of the A&C Act, 1996, which are, in fact, determinative and relevant
when we decide the question of “the seat of an arbitration”. This interpretation
recognises the principle of “party autonomy”, which is the edifice of arbitration. In
other words, the term “court” as defined in clause (e) to sub-section (1) of Section
2, which refers to the “subject-matter of arbitration”, is not necessarily used as
finally determinative of the court's territorial jurisdiction to entertain proceedings
under the Act.
(Para 16)
Any other construction of the provisions would render Section 20 of the A&C
Act, 1996 nugatory. Thus, the legislature had given jurisdiction to two courts : the
court which should have jurisdiction where the cause of action is located; and the
court where the arbitration takes place. This is necessary as, on some occasions,
the agreement may provide the “seat of arbitration” that would be neutral to both
the parties. The courts where the arbitration takes place would be required to
exercise supervisory control over the arbitral process. The “seat of arbitration”
need not be the place where any cause of action has arisen, in the sense that the
“seat of arbitration” may be different from the place where obligations are/had to
be performed under the contract. In such circumstances, both the courts should
have jurisdiction viz. the courts within whose jurisdiction “the subject-matter of the
suit” is situated and the courts within whose jurisdiction the dispute resolution
forum, that is, where the Arbitral Tribunal is located.
(Para 17)
Turning to Section 20 of the A&C Act, 1996, sub-section (1) in clear terms
states that the parties can agree on the place of arbitration. The word “free” has
been used to emphasise the autonomy and flexibility that the parties enjoy to agree
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63
on a place of arbitration which is unrestricted and need not be confined to the place
where the “subject-matter of the suit” is situated. Sub-section (1) to Section 20
gives primacy to the agreement of the parties by which they are entitled to fix and
specify “the seat of arbitration”, which then, by operation of law, determines the
jurisdictional court that will, in the said case, exercise territorial jurisdiction. Sub-
section (2) comes into the picture only when the parties have not agreed on the
place of arbitration as “the seat”. In terms of sub-section (2) of Section 20 the
Arbitral Tribunal determines the place of arbitration. The Arbitral Tribunal, while doing
so, can take into regard the circumstances of the case, including the convenience of
the parties. Sub-section (3) of Section 20 of the A&C Act, 1996 enables the Arbitral
Tribunal, unless the parties have agreed to the contrary, to meet at any place to
conduct hearing at a place of convenience in matters, such as consultation among
its members, for the recording of witnesses, experts or hearing parties, inspection
of documents, goods, or property.
(Para 18)
Sub-section (3) of Section 20 refers to “venue” whereas the “place” mentioned
in sub-section (1) and sub-section (2) refers to the “jurisdictional seat”. An
agreement as to the “seat of arbitration” draws in the law of that country as the
curial law and is analogous to an exclusive jurisdiction clause. The parties that have

)\ Page: 696

agreed to “the seat” must challenge an interim or final award only in the courts of
the place designated as the “seat of arbitration”. In other words, the choice of the
“seat of arbitration” must be the choice of a forum/court for remedies seeking to
attack the award. The aforesaid principles relating to international arbitration have
been applied to domestic arbitrations.

(Paras 19 and 20)

BALcO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4
SCC (Civ) 810; BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234 : (2020) 2
SCC (Civ) 606, followed

Shashoua v. Sharma, 2009 EWHC 957 (Comm); C v. D, 2008 Bus LR 843 : 2007
EWCA Civ 1282 (CA), relied on

In the context of domestic arbitrations it must be held that once the “seat of
arbitration” has been fixed, then the courts at the said location alone will have
exclusive jurisdiction to exercise the supervisory powers over the arbitration. The
courts at other locations would not have jurisdiction, including the courts where
cause of action has arisen. The moment the parties by agreement designate “the
seat”, it becomes akin to an exclusive jurisdiction clause. It would then vest the
courts at “the seat” with exclusive jurisdiction to regulate arbitration proceedings
arising out of the agreement between the parties.
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63
(Para 23)

BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234 : (2020) 2 SCC (Civ) 606;
Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC
678 : (2017) 3 SCC (Civ) 760, followed
Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., (2020) 5 SCC 462 : (2020)
3 SCC (Civ) 326, referred to

Union of India v. Hardy Exploration & Production (India) Inc., (2019) 13 SCC 472 :
(2018) 5 SCC (Civ) 790, held, per incuriam

Dicey and Morris on the Conflict of Laws (11th Edn., Sweet and Maxwell, 1987),
referred to
If the arbitration proceedings were held throughout in Panchkula, there would
have been no difficulty in holding that Delhi is not the jurisdictional “seat”. But that
was not to be, as on recusal of N and post the appointment of T arbitration
proceedings were held at Delhi. In the context of the present case and noticing the
first order passed by the Arbitral Tribunal on 5-8-2014 stipulating that the place of
the proceedings would be Panchkula in Haryana and in the absence of other
significant indica on application of Section 20(2) of the A&C Act, 1996, the City of
Panchkula in Haryana would be the jurisdictional “seat” of arbitration. As “the seat”
was fixed vide the order dated 5-8-2014, the courts in Delhi would not have
jurisdiction.
(Para 27)
Subsequent hearings or proceedings at a different location other than the place
fixed by the arbitrator as the “seat of arbitration” should not be regarded and
treated as a change or relocation of jurisdictional “seat”. This would, lead to
uncertainty and confusion resulting in avoidable esoteric and hermetic litigation as to
the jurisdictional “seat of arbitration”. “The seat” once fixed by the Arbitral Tribunal
under Section 20(2), should remain static and fixed, whereas the “venue” of
arbitration can change and move from “the seat” to a new location. Venue is not
constant and stationary and can move and change in terms of sub-section (3) to
Section 20 of the A&C Act, 1996. Change of venue does not result in change or
relocation of the “seat of arbitration”.
(Para 30)

Inox Renewables Ltd. v. Jayesh Electricals Ltd., (2023) 3 SCC 733 : 2021 SCC
OnLine SC 448, distinguished

) Page: 697

The place of jurisdiction or “the seat” must be certain and static and not vague
or changeable, as the parties should not be in doubt as to the jurisdiction of the
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63
courts for availing of judicial remedies. Further, there would be a risk of parties
rushing to the courts to get first hearing or conflicting decisions that the law does
not contemplate and is to be avoided.
(Para 31)

Cv.D, 2008 Bus LR 843 : 2007 EWCA Civ 1282 (CA), relied on

Exercise of supervisory jurisdiction by the courts where the arbitration

proceedings are being conducted is a relevant consideration, but not a conclusive
and determinative factor when the venue is not “the seat”. "The seat” determines
the jurisdiction of the courts.
(Para 32)
There could be cases where the arbitration proceedings are held at different
locations, but the “seat of arbitration”, as agreed by the parties or as determined
by the arbitrator, may be different, and at that place — “the seat”, only a few
hearings or initial proceedings may have been held. This would not matter and
would not result in shifting of the jurisdictional “seat”.
(Para 34)
The place or the venue fixed for arbitration proceedings, when sub-section (2) of
Section 20 applies, will be the jurisdictional “seat” and the courts having jurisdiction
over the jurisdictional “seat” would have exclusive jurisdiction. This principle would
have exception that would apply when by mutual consent the parties agree that the
jurisdictional “seat” should be changed, and such consent must be express and
clearly understood and agreed by the parties.
(Para 34)
Once the jurisdictional “seat” of arbitration is fixed in terms of sub-section (2) of
Section 20 of the A&C Act, 1996, then, without the express mutual consent of the
parties to the arbitration, “the seat” cannot be changed. Therefore, the
appointment of a new arbitrator who holds the arbitration proceedings at a different
location would not change the jurisdictional “seat” already fixed by the earlier or
first arbitrator. The place of arbitration in such an event should be treated as a
venue where arbitration proceedings are held.
(Para 35)

BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234 : (2020) 2 SCC (Civ) 606,
followed

S.P. Singla Constructions (P) Ltd. v. BBR (India) (P) Ltd., 2019 SCC OnLine P&H
4287; S.P. Singla Constructions (P) Ltd. v. BBR (India) (P) Ltd., 2019 SCC
OnLine P&H 6265, affirmed

State of W.B. v. Associated Contractors, (2015) 1 SCC 32 : (2015) 1 SCC (Civ) 1;

BBR (India) (P) Ltd. v. S.P. Singhla Constructions (P) Ltd., 2020 SCC OnLine SC
1391, referred to

Nivaran Solutions v. Aura Thia Spa Services (P) Ltd., 2016 SCC OnLine Bom 5062;
Konkola Copper Mines v. Stewarts & Lloyds of India Ltd., 2013 SCC OnLine Bom
777: Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd.. 2018 SCC Online Del
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63

9338, held, overruled

VN-D/69048/CV
Advocates who appeared in this case:
Kunal Verma (Advocate-on-Record), Advocate, for the Appellant;
Ratin Rai, Senior Advocate [Anirudh Wadhwa, Shivam Singh, Ms
Ritika Sinha, Ms Tahira Kathpalia, Bharghav Thali, Ms Anushka Pandey,
Jaideep Khanna, Hamza Tariq and Gopal Singh (Advocate-on-Record),
Advocates], for the Respondent.

) Page: 698

Chronological list of cases cited on page(s)

1. (2023) 3 SCC 733 : 2021 SCC OnLine SC 448,

Inox Renewables Ltd. v. Jayesh Electricals Ltd. 710a, 710a-b

2. (2020) 5 SCC 462 : (2020) 3 SCC (Civ) 326,

Brahmani River Pellets Ltd. v. Kamachi Industries
Ltd. 707c-d

3. (2020) 4 SCC 234 : (2020) 2 SCC (Civ) 606, BGS04b-c, 704e, 705e, 7059,
SGS Soma JV v. NHPC Ltd. 706b-c, 706¢-d, 707b,
707e, 708a, 708d,
709b-c, 709¢, 712a,
712b-c, 713a

4. 2020 SCC OnLine SC 1391, BBR (India) (P) Ltd. v.

S.P. Singhla Constructions (P) Ltd. 703a-b

5. (2019) 13 SCC 472 : (2018) 5 SCC (Civ) 790,

Union of India v. Hardy Exploration & Production
(India) Inc. (held, per incuriam) 709b-c, 709¢c-d

6. 2019 SCC OnLine P&H 6265, S.P. Singla

Constructions (P) Ltd. v. BBR (India) (P) Ltd. 702d
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The surest wayto legal research!
© 2024 Eastern Book Company. The text of this version of this judgment is protected by the law
declared by the Supreme Court in Eastem Book Company v. D.B. Modak, (2008) 1 SCC 1 paras 61, 62 &
63.

7.2019 SCC OnLine P&H 4287, SP. Singla

Constructions (P) Ltd. v. BBR (India) (P) Ltd. 702b-c¢

8. 2018 SCC OnLine Del 9338, Antrix Corpn. Ltd. v.

Devas Multimedia (P) Ltd. (held, overruled) 712a, 712c, 7129

9. (2017) 7 SCC 678 : (2017) 3 SCC (Civ) 760, Indus

Mokbile Distribution (P) Ltd. v. Datawind
Innovations (P) Ltd. 707e

10. 2016 SCC OnLine Bom 5062, Nivaran Solutions v.

Aura Thia Spa Services (P) Ltd. (held, overruled) 7129

11. (2015) 1 SCC 32 : (2015) 1 SCC (Civ) 1, State of

W.B. v. Associated Contractors 702¢-d

12. 2013 SCC OnLine Bom 777, Konkola Copper

Mines v. Stewarts & Lloyds of India Ltd. (held,
overruled) 7129

13. (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810, 703g-h, 705d-e, 705e,
BALCO v. Kaiser Aluminium Technical Services 706a, 706b, 706¢,
Inc. 706d, 707¢c, 709¢c-d

14. 2009 EWHC 957 (Comm), Shashoua v. Sharma 705e-f

15. 2008 Bus LR 843 : 2007 EWCA Civ 1282 (CA), C

v.D 705f, 710g-h

The Judgment of the Court was delivered by

SANJIV KHANNA, J.— Leave granted. The short and interesting issue
which arises in the present appeals is — Whether conducting the
arbitration proceedings at Delhi, owing to the appointment of a new
arbitratort, would shift the “jurisdictional seat of arbitration” from
Panchkula in Haryana, the place fixed by the first arbitrator? for the
arbitration proceedings?
2. Before we refer to the statutory provisions and the case law
precedents, facts in brief, relevant to decide the aforesaid question, are
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63
required to be stated. The appellant — BBR (India) Pvt. Ltd., and the
respondent — S.P. Singla Constructions Pvt. Ltd., had entered into a
contract dated 30-6-2011, under which the appellant was required to
supply, install and undertake stressing of cable stays for the 592 m
long cable-stay bridge being constructed by the respondent over the
River Ravi at Basouli, Jammu and Kashmir.

N\ Page: 699

3. Letter of intent dated 30-6-2011 issued under the contract had an

arbitration clause for resolution of disputes by a sole arbitrator, which
reads thus:
“Dispute Resolution and Arbitration
Save where the decision of the contractor is final and binding on
the subcontract any dispute difference arising between the
contractor and sub-contractor relating to any matter. In first
instance shall be attempted to be resolved by the arbitration of the
sole arbitrator to be appointed by the Managing Director of S.P.
Singla Constructions Pvt. Ltd.
This letter of intent is being issued to you in two original you are
requested to return one original duly signed in token of your
acceptance, which shall constitute a valid agreement for the work till
such time a formal agreement is signed between you and us.”
4. The arbitration clause is silent and does not stipulate the seat or
venue of arbitration. The contract and letter of intent were executed at
Panchkula in Haryana. The corporate office of the respondent is also
located at Panchkula. However, the registered office of the appellant is
located in Bengaluru, Karnataka.
5. As disputes arose between the parties, the matter was referred to
arbitration, and Mr Justice (Retd.) N.C. Jain was appointed as the sole
arbitrator. In the first sitting held on 5-8-2014, the Arbitral Tribunal
held that the venue of the proceedings would be H. No. 292, Sector-6,
Panchkula, Haryana. The respondent was not present at the
proceedings and had submitted a written request for an adjournment,
which request was accepted. Neither party had objected to the place of
arbitration proceedings as fixed by the Arbitral Tribunal. Arbitration
proceedings were thereafter held at H. No. 52, Sector-8-A, Chandigarh,
on 16-12-2014, where the parties were directed to complete the
pleadings, and the matter was adjourned for the framing of issues on
22-2-2015. In the proceedings held on 29-5-2015, Mr Justice (Retd.)
N.C. Jain recused recording that he did not want to continue as the
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arbitrator for personal reasons. The records received thus far would be
handed over to the new arbitrator. Pleadings were completed by then.
6. Thereupon, Mr Justice (Retd.) T.S. Doabia took over as the sole
arbitrator and recorded his consent in this regard in the first procedural
order dated 30-6-2015. The order stated that the venue of the
proceedings would be Delhi. Apparently, the appellant was not present
and accordingly, the respondent was directed by the Arbitral Tribunal to
take steps to intimate the appellant.

.\ Page: 700

7. The next order dated 18-7-2015 mentions that the parties had
filed the claim petition and the statement of defence along with the
counterclaim before Mr Justice (Retd.) N.C. Jain. Rejoinder had also
been filed before the previous arbitrator. The parties were directed to
file their evidence by way of affidavits for which timelines were fixed.
The records from the previous arbitrator were required to be collected
by the respondent and placed before the new arbitrator.
8. Thereafter, hearings were held, witnesses were cross-examined,
and the arguments were addressed by the parties at Delhi. The order
dated 22-1-2016, states that the award would be pronounced on 29-1-
2016 at the address at New Delhi and that the parties should send their
representatives, failing which, the award would be sent by email
followed by a signed copy through post.
9. The award was signed and pronounced at Delhi on 29-1-2016,
whereunder the respondent was awarded a sum of Rs 3,35,86,577 with
interest @ 15% p.a.
10. Thereafter, two proceedings were initiated. The respondent filed
an application for interim orders under Section 92 of the Arbitration and

) Page: 701

Conciliation Act, 1996 (for short “the Act”) before the Additional District
Judge, Panchkula, on 7-5-2016. The appellant filed a petition under
Section 34

) Page: 702
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of the Act before the Delhi High Court on 28-4-2016. Thus, the
appellant and respondent invoked the jurisdiction of two different
courts. Resultantly, the question of the “jurisdictional seat of
arbitration” assumes importance, which must be appropriately
answered.

11. The petition filed by the respondent under Section 9 of the Act
before the Additional District Judge, Panchkula, was dismissed vide
order dated 14-12-2016, on the ground of lack of territorial jurisdiction,
inter alia, recording that the jurisdiction to entertain the application
vests solely with the Delhi High Court, where a prior petition under
Section 34 had been filed, and was pending. The petition under Section
9, being a subsequent petition, would be barred under Section 42 of
the Act.
12. However, this order has been set aside by the High Court of
Punjab and Haryana vide order dated 14-10-2019%, with the finding
that the courts of Delhi do not have the jurisdiction to entertain the
objections under Section 34 of the Act. To this effect, the High Court of
Punjab and Haryana has recorded that the agreement between the
parties was silent as to “the seat” of the arbitration proceedings, and
the second arbitrator Mr Justice (Retd.) T.S. Doabia, vide his first order
dated 30-6-2015, had not determined Delhi to be the “seat of
arbitration”. Relying on the decision of this Court in State of W.B. v.
Associated Contractorsé, the High Court held that the courts at
Panchkula had jurisdiction to deal with the case. The review application
filed by the appellant was dismissed vide order dated 8-11-2019%,

)\ Page: 703

13. These orders, passed by the High Court of Punjab and Haryana,
have been assailed before us by the appellant in these appeals. By
order dated 9-1-20208, notice was issued in the present appeals.
14. Section 2(1)(e) of the Act, which defines the term “court”;
Section 20 on the “place of arbitration”; as well as Section 42 read
thus:
“2. Definitions.—(1) In this Part, unless the context otherwise
requires,—
* * *

(e) “Court” means—

(i) in the case of an arbitration other than international
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commercial arbitration, the Principal Civil Court of original
jurisdiction in a district, and includes the High Court in exercise of its
ordinary original civil jurisdiction, having jurisdiction to decide the
questions forming the subject-matter of the arbitration if the same
had been the subject-matter of a suit, but does not include any civil
court of a grade inferior to such Principal Civil Court, or any Court of
Small Causes;
* * *

20. Place of arbitration.—(1) The parties are free to agree on

the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), the place
of arbitration shall be determined by the Arbitral Tribunal having
regard to the circumstances of the case, including the convenience of
the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the
Arbitral Tribunal may, unless otherwise agreed by the parties, meet
at any place it considers appropriate for consultation among its
members, for hearing witnesses, experts or the parties, or for
inspection of documents, goods or other property.
* * *

42. Jurisdiction.— Notwithstanding anything contained

elsewhere in this Part or in any other law for the time being in force,
where with respect to an arbitration agreement any application
under this Part has been made in a Court, that Court alone shall
have jurisdiction over the arbitral proceedings and all subsequent
applications arising out of that agreement and the arbitral
proceedings shall be made in that Court and in no other Court.”
15. Interpretation of the term “court”, as defined in clause (e) to sub
-section (1) of Section 2 of the Act, had come up for consideration
before a Constitutional Bench of five Judges in BALcO v. Kaiser
Aluminium Technical Services Inc.2, (for short “BaLco case”) which
decision had examined the distinction between “jurisdictional seat” and
“venue” in the context of international arbitration, to hold that the
expression “seat of arbitration” is the centre of gravity in arbitration.
However, this does not mean that all arbitration

) Page: 704

proceedings must take place at “the seat”. The arbitrators at times hold
meetings at more convenient locations. Regarding the expression
“court”, it was observed that Section 2(2) of the Act does not make Part
I applicable to arbitrations seated outside India. The expressions used
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in Section 2(2)m of the Act do not permit an interpretation to hold that
Part I would also apply to arbitrations held outside the territory of
India.

16. Noticing the above interpretation, a three-Judge Bench of this

Court in BGS SGS Soma JV v. NHPC Ltd.** has observed that the
expression “subject to arbitration” used in clause (e) to sub-section (1)
of Section 2 of the Act cannot be confused with the “subject-matter of
the suit”. The term “subject-matter of the suit” in the said provision is
confined to Part I. The purpose of the clause is to identify the courts
having supervisory control over the judicial proceedings. Hence, the
clause refers to a court which would be essentially a court of “the seat”
of the arbitration process. Accordingly, clause (e) to sub-section (1) of
Section 2 has to be construed keeping in view the provisions of Section
20 of the Act, which are, in fact, determinative and relevant when we
decide the question of “the seat of an arbitration”. This interpretation
recognises the principle of “party autonomy”, which is the edifice of
arbitration. In other words, the term “court” as defined in clause (e) to
sub-section (1) of Section 2, which refers to the “subject-matter of
arbitration”, is not necessarily used as finally determinative of the
court's territorial jurisdiction to entertain proceedings under the Act.
17. In BGS SGS Soma!, this Court observed that any other
construction of the provisions would render Section 20 of the Act
nugatory. In view of the Court, the legislature had given jurisdiction to
two courts : the court which should have jurisdiction where the cause of
action is located; and the court where the arbitration takes place. This
is necessary as, on some occasions, the agreement may provide the
“seat of arbitration” that would be neutral to both the parties. The
courts where the arbitration takes place would be required to exercise
supervisory control over the arbitral process. The “seat of arbitration”
need not be the place where any cause of action has arisen, in the
sense that the “seat of arbitration” may be different from the place
where obligations are/had to be performed under the contract. In such
circumstances, both the courts should have jurisdiction viz. the courts
within whose jurisdiction “the

) Page: 705

subject-matter of the suit” is situated and the courts within whose

jurisdiction the dispute resolution forum, that is, where the Arbitral
Tribunal is located.

18. Turning to Section 20 of the Act, sub-section (1) in clear terms

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states that the parties can agree on the place of arbitration. The word
“free” has been used to emphasise the autonomy and flexibility that the
parties enjoy to agree on a place of arbitration which is unrestricted and
need not be confined to the place where the “subject-matter of the
suit” is situated. Sub-section (1) to Section 20 gives primacy to the
agreement of the parties by which they are entitled to fix and specify
“the seat of arbitration”, which then, by operation of law, determines
the jurisdictional court that will, in the said case, exercise territorial
jurisdiction. Sub-section (2) comes into the picture only when the
parties have not agreed on the place of arbitration as “the seat”.!? In
terms of sub-section (2) of Section 20 the Arbitral Tribunal determines
the place of arbitration. The Arbitral Tribunal, while doing so, can take
into regard the circumstances of the case, including the convenience of
the parties. Sub-section (3) of Section 20 of the Act enables the
Arbitral Tribunal, unless the parties have agreed to the contrary, to
meet at any place to conduct hearing at a place of convenience in
matters, such as consultation among its members, for the recording of
witnesses, experts or hearing parties, inspection of documents, goods,
or property.
19. Relying upon the Constitutional Bench decision in BALCO?, in
BGS SGS Soma*l, it has been held that sub-section (3) of Section 20
refers to “venue” whereas the “place” mentioned in sub-section (1) and
sub-section (2) refers to the “jurisdictional seat”. To explain the
difference, in BALCOE, a case relating to international arbitration,
reference was made to several judgments, albeit the judgment in
Shashoua v. Sharma?® was extensively quoted to observe that an
agreement as to the “seat of arbitration” draws in the law of that
country as the curial law and is analogous to an exclusive jurisdiction
clause.** The parties that have agreed to “the seat” must challenge an
interim or final award only in the courts of the place designated as the
“seat of arbitration”. In other words, the choice of the “seat of
arbitration” must be the choice of a forum/court for remedies seeking to
attack the award.
20. The aforesaid principles relating to international arbitration have
been applied to domestic arbitrations. In this regard, we may refer to
para 38 of BGS SGS Soma*t, which reads as under : (SCC p. 274)
“38. A reading of paras 75, 76, 96, 110, 116, 123 and 194 of
BALco® would show that where parties have selected the seat of
arbitration in their agreement, such selection would then amount to
an exclusive jurisdiction
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) Page: 706

clause, as the parties have now indicated that the courts at the “seat”
would alone have jurisdiction to entertain challenges against the
arbitral award which have been made at the seat. The example given in
para 96 buttresses this proposition, and is supported by the previous
and subsequent paragraphs pointed out hereinabove. The BaLco®
judgment, when read as a whole, applies the concept of “seat” as laid
down by the English judgments (and which is in Section 20 of the
Arbitration Act, 1996), by harmoniously construing Section 20 with
Section 2(1)(e), so as to broaden the definition of “court”, and bring
within its ken courts of the “seat” of the arbitrationt2.”

21. The Court in BGS SGS Soma*, then proceeded to examine the
contention whether para 96 of BALco?, which speaks of concurrent
jurisdiction of the courts, that is, the jurisdiction of courts where the
cause of action has arisen wholly or partly, and the courts within the
jurisdiction in which the dispute resolution forum — arbitration is
located, to observe and elucidate the legal position : (BGS SGS Soma
casel!, SCC pp. 274-75, para 40)
“40. Para 96 of BALcO case? is in several parts. First and foremost,
Section 2(1)(e), which is the definition of “court” under the
Arbitration Act, 1996 was referred to, and was construed keeping in
view the provisions in Section 20 of the Arbitration Act, 1996, which
give recognition to party autonomy in choosing the seat of the
arbitration proceedings. Secondly, the Court went on to state in two
places in the said paragraph that jurisdiction is given to two sets of
courts, namely, those courts which would have jurisdiction where the
cause of action is located; and those courts where the arbitration
takes place. However, when it came to providing a neutral place as
the “seat” of arbitration proceedings, the example given by the five-
Judge Bench made it clear that appeals under Section 37 of the
Arbitration Act, 1996 against interim orders passed under Section 17
of the Arbitration Act, 1996 would lie only to the courts of the seat —
which is Delhi in that example — which are the courts having
supervisory control, or jurisdiction, over the arbitration proceedings.
The example then goes on

N\ Page: 707

to state that this would be irrespective of the fact that the obligations
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to be performed under the contract, that is, the cause of action, may
arise in part either at Mumbai or Kolkata. The fact that the arbitration is
to take place in Delhi is of importance. However, the next sentence in
the said paragraph reiterates the concurrent jurisdiction of both courts.”

22. BGS SGS Soma*! extensively refers to the judgment of this

Court in Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P)
Ltd.18, which decision refers to the legislative history of Section 2(1)(e)
and Section 20 of the Act and the recommendations of the 246th Law
Commission Report, 2014. These recommendations, it is observed,
were not implemented in consonance with the decision in BALCO?,
which, in no uncertain terms, refers to the “place” as the “jurisdictional
seat” for the purpose of clause (e) to sub-section (2) of Section 2 of the
Act. This judgment was subsequently followed in Brahmani River Pellets
Ltd. v. Kamachi Industries Ltd.*>
23. It may, however, be noted that clause (e) to sub-section (1) of
Section 2 was amended by inserting sub-clause (ii)*® with the specific
objective to solve the problem of conflict of jurisdiction that would arise
in cases where interim measures are sought in India in cases of
arbitration seated outside India. In the context of domestic arbitrations
it must be held that once the “seat of arbitration” has been fixed, then
the courts at the said location alone will have exclusive jurisdiction to
exercise the supervisory powers over the arbitration. The courts at other
locations would not have jurisdiction, including the courts where cause
of action has arisen. As observed above and held in BGS SGS Soma™,
and Indus Mobile*?, the moment the parties by agreement designate
“the seat”, it becomes akin to an exclusive jurisdiction clause. It would
then vest the courts at “the seat” with exclusive jurisdiction to regulate
arbitration proceedings arising out of the agreement between the
parties.

) Page: 708

24. The Court in BGS SGS Soma** has also dealt with the situation
where the parties have not agreed on or have not fixed the
jurisdictional “seat of arbitration”, and has laid down the following test
to determine the “seat of arbitration” which would determine the
location of the court that would exercise supervisory jurisdiction. The
test is simple and reads : (SCC p. 289, para 61)
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“61. It will thus be seen that wherever there is an express
designation of a “venue”, and no designation of any alternative place
as the “seat”, combined with a supranational body of rules governing
the arbitration, and no other significant contrary indicia, the
inexorable conclusion is that the stated venue is actually the juridical
seat of the arbitral proceeding.”
For formulating the test reference was made to several Indian and
foreign judgments to emphasise that where the parties had failed to
choose the “jurisdictional seat”® which would be governing the arbitral
proceedings, the proceedings must be considered at any rate prima
facie as being governed and subject to jurisdiction of the court where
the arbitration is being held, on the ground that the said court is most
likely to be connected with the proceedings.?t
25. Accordingly, in BGS SGS Soma**, the law as applicable, where
the parties by agreement have not fixed the jurisdictional “seat”, is
crystallised as under : (SCC pp. 301-02, para 82)
“82. On a conspectus of the aforesaid judgments, it may be
concluded that whenever there is the designation of a place of
arbitration in an arbitration clause as being the “venue” of the
arbitration proceedings, the expression “arbitration proceedings”
would make it clear that the “venue” is really the “seat” of the
arbitral proceedings, as the aforesaid expression does not include
just one or more individual or particular hearing, but the arbitration
proceedings as a whole, including the making of an award at that
place. This language has to be contrasted with language such as
“tribunals are to meet or have witnesses, experts or the parties”
where only hearings are to take place in the “venue”, which may lead
to the conclusion, other things being equal, that the venue so stated
is not the “seat” of arbitral proceedings, but only a convenient place
of meeting. Further, the fact that the arbitral proceedings “shall be
held” at a particular venue would also indicate that the parties
intended to anchor arbitral proceedings to a particular place,
signifying thereby, that that place is the seat of the arbitral
proceedings. This, coupled with there being no other significant
contrary indicia that the stated venue is merely a “venue” and not
the “seat” of

) Page: 709

the arbitral proceedings, would then conclusively show that such a

clause designates a “seat” of the arbitral proceedings. In an
international context, if a supranational body of rules is to govern the
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arbitration, this would further be an indicia that “the venue”, so stated,
would be the seat of the arbitral proceedings. In a national context, this
would be replaced by the Arbitration Act, 1996 as applying to the
“stated venue”, which then becomes the “seat” for the purposes of
arbitration.”

26. BGS SGS Soma'* also refers to decision of this Court in Union of
India v. Hardy Exploration & Production (India) Inc.?2, which had held
that the choice of the venue of arbitration did not imply that it had
become the “seat of arbitration” and that the venue could not by itself
assume the status of “the seat”; instead a venue could become “the
seat” only if “something else is added to it as a concomitant”.
According to BGS SGS Soma!, the reasoning given in Hardy
Exp/orationg is per incuriam as it contradicts the ratio and law laid
down in BALCO®. Hence, BGS SGS Soma*! holds that it would be correct
to hold that while exercising jurisdiction under sub-section (2) of
Section 20 of the Act, an arbitrator is not to pass a detailed or a
considered decision. The place where the Arbitral Tribunal holds the
arbitration proceedings would, by default, be the venue of arbitration
and consequently the “seat of arbitration”.
27. When we turn to the facts of the present case, if the arbitration
proceedings were held throughout in Panchkula, there would have been
no difficulty in holding that Delhi is not the jurisdictional “seat”. But
that was not to be, as on recusal of Mr Justice (Retd.) N.C. Jain and
post the appointment of Mr Justice (Retd.) T.S. Doabia arbitration
proceedings were held at Delhi. In the context of the present case and
noticing the first order passed by the Arbitral Tribunal on 5-8-2014
stipulating that the place of the proceedings would be Panchkula in
Haryana and in the absence of other significant indica on application of
Section 20(2) of the Act, the city of Panchkula in Haryana would be the
jurisdictional “seat” of arbitration. As “the seat” was fixed vide the
order dated 5-8-2014, the courts in Delhi would not have jurisdiction.
28. The appellant, however, contends that on the appointment of the
new arbitrator, namely, Mr Justice (Retd.) T.S. Doabia, and thereupon
the venue being fixed at Delhi, the jurisdictional “seat of arbitration”
had changed from Panchkula in Haryana to Delhi.

N\ Page: 710

29. Reliance in this regard is placed upon the decision of this Court
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in Inox Renewables Ltd. v. Jayesh Electricals Ltd.?? in which the “seat of
arbitration” fixed by the parties was Jaipur, but the courts at
Ahmedabad had entertained the challenge to the award. The appellant
submits that the courts at Ahmedabad had exercised jurisdiction, which
was upheld on the ground that the arbitration proceedings were
conducted in Ahmedabad. Thus the “seat of arbitration” changed and
had got relocated from Jaipur to Ahmedabad. This, in the context of the
decision in Inox Renewab/esg, is undoubtedly correct, but the aforesaid
decision cannot be read as a precept in cases governed by sub-section
(2) of Section 20 of the Act. Inox Renewables?> was a case governed
under sub-section (1) of Section 20 of the Act, that is, where parties by
the agreement had fixed the jurisdictional “seat” at Jaipur, Rajasthan,
but thereafter, by mutual consent, had decided to change the venue of
proceedings to Ahmedabad prior to the commencement of the
arbitration. This evidently resulted in the decision of this Court
accepting that the jurisdictional “seat of arbitration” was Ahmedabad.
This decision would apply in case the parties, by consent, agree
mutually that the “seat of arbitration” would be located at a particular
place. The said exercise would be in terms of sub-section (1) of Section
20 of the Act, which endorses and emphasises on party autonomy and
choice that determines the “seat of arbitration”. It would not apply
when the arbitrator fixes “the seat” in terms of sub-section (2) of
Section 20 of the Act. Once the arbitrator fixes “the seat” in terms of
sub-section (2) of Section 20 of the Act, the arbitrator cannot change
“the seat” of the arbitration, except when and if the parties mutually
agree and state that the “seat of arbitration” should be changed to
another location, which is not so in the present case.
30. There are good reasons why we feel that subsequent hearings or
proceedings at a different location other than the place fixed by the
arbitrator as the “seat of arbitration” should not be regarded and
treated as a change or relocation of jurisdictional “seat”. This would, in
our opinion, lead to uncertainty and confusion resulting in avoidable
esoteric and hermetic litigation as to the jurisdictional “seat of
arbitration”. “The seat” once fixed by the Arbitral Tribunal under
Section 20(2), should remain static and fixed, whereas the “venue” of
arbitration can change and move from “the seat” to a new location.
Venue is not constant and stationary and can move and change in
terms of sub-section (3) to Section 20 of the Act. Change of venue does
not result in change or relocation of the “seat of arbitration”.
31. It is highly desirable in commercial matters, in fact in all cases,
that there should be certainty as to the court that should exercise
jurisdiction. We do not think the law of arbitration visualises repeated
or constant shifting of the “seat of arbitration”. In fact, sub-section (3)
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of Section 20 specifically states and draws a distinction between the
venue of arbitration and the “seat of arbitration” by stating that for
convenience and other reasons, the arbitration proceedings may be
held at a place different than the “seat of arbitration”, which location is
referred to as the venue of arbitration. If we accept this contention of
the appellant, we would, as observed in C v. D%, create a recipe for
litigation and

.\ Page: 711

(what is worse) confusion which was not intended by the Act. The place
of jurisdiction or “the seat” must be certain and static and not vague or
changeable, as the parties should not be in doubt as to the jurisdiction
of the courts for availing of judicial remedies. Further, there would be a
risk of parties rushing to the courts to get first hearing or conflicting
decisions that the law does not contemplate and is to be avoided.

32. A secondary contention to support the said plea on the ground

that the courts where arbitration proceedings are being conducted
should be given supervisory powers, on in-depth consideration, must
be rejected as feeble when we juxtapose the unacceptable practicable
consequences that emerge. Exercise of supervisory jurisdiction by the
courts where the arbitration proceedings are being conducted is a
relevant consideration, but not a conclusive and determinative factor
when the venue is not “the seat”. "The seat” determines the jurisdiction
of the courts. There would be situations where the venue of arbitration
in terms of sub-section (3) of Section 20 would be different from the
place of the jurisdictional “seat”, and it is equally possible majority or
most of the hearing may have taken place at a venue which is different
from the “seat of arbitration”. Further, on balance, we find that the
aspect of certainty as to the court's jurisdiction must be given and
accorded priority over the contention that the supervisory courts
located at the place akin to the venue where the arbitration proceedings
were conducted or substantially conducted should be preferred.
33. At this stage, we must also deal with the appellant's argument
that substantive proceedings were held in Delhi and, therefore, it would
be the “seat of arbitration”. The proceedings before the first arbitration
at Panchkula, Haryana, were restricted to filing of pleadings and
documents. On deeper consideration, this argument should be rejected
for the reasons recorded above, as it will lead to confusion and
uncertainty. The legal question raised in the present case must be
answered objectively and not subjectively with reference to the facts of
a particular case. Otherwise, there would be a lack of clarity and
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consequent mix-up about the courts that would exercise jurisdiction.
There could be cases where the arbitration proceedings are held at
different locations, but the “seat of arbitration”, as agreed by the
parties or as determined by the arbitrator, may be different, and at that
place — “the seat”, only a few hearings or initial proceedings may have
been held. This would not matter and would not result in shifting of the
jurisdictional “seat”. Arbitrators can fix the place of residence, place of
work, or in case of recusal, arbitration proceedings may be held at two
different places, as in the present case.
34. For clarity and certainty, which is required when the question of
territorial jurisdiction arises, we would hold that the place or the venue
fixed for arbitration proceedings, when sub-section (2) of Section 20
applies, will be the jurisdictional “seat” and the courts having
jurisdiction over the jurisdictional “seat” would have exclusive
jurisdiction. This principle would have exception that would apply when
by mutual consent the parties agree that the jurisdictional “seat”
should be changed, and such consent must be express and clearly
understood and agreed by the parties.

35. We have quoted Section 42 of the Act. Section 42 was also

examined in BGS SGS Soma*! and the view expressed by the Delhi
High Court in Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd.** was
overruled observing that the Section 42 is meant to avoid conflicts of
jurisdiction of courts by placing the supervisory jurisdiction over all
arbitration proceedings in connection with the arbitration proceedings
with one court exclusively. The aforesaid observation supports our
reasoning that once the jurisdictional “seat” of arbitration is fixed in
terms of sub-section (2) of Section 20 of the Act, then, without the
express mutual consent of the parties to the arbitration, “the seat”
cannot be changed. Therefore, the appointment of a new arbitrator who
holds the arbitration proceedings at a different location would not
change the jurisdictional “seat” already fixed by the earlier or first
arbitrator. The place of arbitration in such an event should be treated as
a venue where arbitration proceedings are held.
36. We would now reproduce para 59 of the judgment in BGS SGS
Soma*, which examines Section 42 of the Act and reads as under :
(SCC pp. 288-89)
“59. Equally incorrect is the finding in Antrix Corpn.fl that Section
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42 of the Arbitration Act, 1996 would be rendered ineffective and
useless. Section 42 is meant to avoid conflicts in jurisdiction of
courts by placing the supervisory jurisdiction over all arbitral
proceedings in connection with the arbitration in one court
exclusively. This is why the section begins with a non obstante
clause, and then goes on to state ‘. where with respect to an
arbitration agreement any application under this Part has been made
in a court...'. It is obvious that the application made under this Part
to a court must be a court which has jurisdiction to decide such
application. The subsequent holdings of this court, that where a seat
is designated in an agreement, the courts of the seat alone have
jurisdiction, would require that all applications under Part I be made
only in the court where the seat is located, and that court alone then
has jurisdiction over the arbitral proceedings and all subsequent
applications arising out of the arbitral agreement. So read, Section
42 is not rendered ineffective or useless. Also, where it is found on
the facts of a particular case that either no “seat” is designated by
agreement, or the so-called “seat” is only a convenient “venue”, then
there may be several courts where a part of the cause of action
arises that may have jurisdiction. Again, an application under
Section 9 of the Arbitration Act, 1996 may be preferred before a
court in which part of the cause of action arises in a case where
parties have not agreed on the “seat” of arbitration, and before such
“seat” may have been determined, on the facts of a particular case,
by the Arbitral Tribunal under Section 20(2) of the Arbitration Act,
1996. In both these situations, the earliest application having been
made to a court in which a part of the cause of action arises would
then be the exclusive court under Section 42, which would have
control over the arbitral proceedings. For all these reasons, the law
stated by the Bombayu 25 and Delhi®* High Courts in this regard is
incorrect and is overruled.”
(emphasis in original)

) Page: 713

37. We have already referred to the first few sentences of the

aforementioned paragraph and explained the reasoning in the context
of the present case. The paragraph in BGS SGS Soma** also explains
the non obstante effect as incorporated in Section 42 to hold that it is
evident that the application made under Part I must be to a court which
has a jurisdiction to decide such application. Where “the seat” is
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designated in the agreement, the courts of “the seat” alone will have
the jurisdiction. Thus, all applications under Part I will be made in the
court where “the seat” is located as that court would alone have
jurisdiction over the arbitration proceedings and all subsequent
proceedings arising out of the arbitration proceedings. The quotation
also clarifies that when either no “seat” is designated by an agreement,
or the so-called “seat” is only a convenient venue, then there may be
several courts where a part of the cause of action arises that may have
jurisdiction. An application under Section 9 of the Act may be preferred
before the court in which a part of cause of action arises in the case
where parties had not agreed on the “seat of arbitration”. This is
possible in the absence of an agreement fixing “the seat”, as an
application under Section 9 may be filed before “the seat” is
determined by the Arbitral Tribunal under Section 20(2) of the Act.
Consequently, in such situations, the court where the earliest
application has been made, being the court in which a part or entire of
the cause of action arises, would then be the exclusive court under
Section 42 of the Act. Accordingly, such a court would have control over
the arbitration proceedings.?”
38. Section 42 is to no avail as it does not help the case propounded
by the appellant, as in the present case the arbitrator had fixed the
jurisdictional “seat” under Section 20(2) of the Act before any party
had moved the court under the Act, being a court where a part or whole
of the cause of action had arisen. The appellant had moved the Delhi
High Court under Section 34 of the Act after the Arbitral Tribunal vide
the order dated 5-8-2014 had fixed the jurisdictional “seat” at
Panchkula in Haryana. Consequently, the appellant cannot, based on
the fastest finger first principle, claim that the courts in Delhi get
exclusive jurisdiction in view of Section 42 of the Act. The reason is
simple that before the application under Section 34 was filed, the
jurisdictional “seat” of arbitration had been determined and fixed under
sub-section (2) of Section 20 and thereby, the courts having
jurisdiction over Panchkula in Haryana, have exclusive jurisdiction. The
courts in Delhi would not get jurisdiction as the jurisdictional “seat of
arbitration” is Panchkula and not Delhi.
39. In view of the aforesaid discussion and reasons, we do not find
any merit in the present appeals, and the same are dismissed without
any order as to costs.

Arising out of SLPs (C) Nos. 30019-20 of 2019. Arising from the impugned Final Judgment
and Order in S.P. Singla Constructions (P) Ltd. v. BBR (India) (P) Ltd., 2019 SCC OnLine P&H
4287 (Punjab and Haryana High Court, FAO No. 317 of 2017, dt. 14-10-2019) and S.P. Singla
Constructions (P) Ltd. v. BBR (India) (P) Ltd., 2019 SCC OnLine P&H 6265 (Punjab and
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dedared by the Supreme Court in Eastem Book Company v. D B. Modak, (2008) 1 SCC 1 paras 61, 62 &
63
Haryana High Court, RACR No. 173 of 2019 in FAO No. 317 of 2017, dt. 8-11-2019)
[Affirmed]

! Mr Justice T.S. Doabia (Retd.).

2 Mr Justice N.C. Jain (Retd.).

3 “9. Interim measures, etc. by Court.—(1) A party may, before or during arbitral
proceedings or at any time after the making of the arbitral award but before it is enforced in
accordance with Section 36, apply to a Court:

(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes
of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:

(a) the preservation, interim custody or sale of any goods which are the subject-matter of
the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-
matter of the dispute in arbitration, or as to which any question may arise therein and
authorising for any of the aforesaid purposes any person to enter upon any land or building in
the possession of any party, or authorising any samples to be taken or any observation to be
made, or experiment to be tried, which may be necessary or expedient for the purpose of
obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the Court to be just and
convenient,

and the Court shall have the same power for making orders as it has for the purpose of, and
in relation to, any proceedings before it.

(2) Where, before the commencement of the arbitral proceedings, a Court passes an order
for any interim measure of protection under sub-section (1), the arbitral proceedings shall be
commenced within a period of ninety days from the date of such order or within such further
time as the Court may determine.

(3) Once the Arbitral Tribunal has been constituted, the Court shall not entertain an
application under sub-section (1), unless the Court finds that circumstances exist which may
not render the remedy provided under Section 17 efficacious.”

4 v34. Application for setting aside arbitral award.—(1) Recourse to a Court against an
arbitral award may be made only by an application for setting aside such award in
accordance with sub-section (2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if—
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(a) the party making the application furnishes proof that—

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected
it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters beyond the scope
of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from
those not so submitted, only that part of the arbitral award which contains decisions on
matters not submitted to arbitration may be set aside; or

(v) the composition of the Arbitral Tribunal or the arbitral procedure was not in accordance
with the agreement of the parties, unless such agreement was in conflict with a provision of
this Part from which the parties cannot derogate, or, failing such agreement, was not in
accordance with this Part; or

(b) the Court finds that—

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the
law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with
the public policy of India, only if,—

(i) the making of the award was induced or affected by fraud or corruption or was in violation
of Section 75 or Section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iif) it is in conflict with the most basic notions of morality or justice.

Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention
with the fundamental policy of Indian law shall not entail a review on the merits of the
dispute.

(2-A) An arbitral award arising out of arbitrations other than international commercial
arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated
by patent illegality appearing on the face of the award:

Provided that an award shall not be set aside merely on the ground of an erroneous
application of the law or by reappreciation of evidence.

(3) An appolication for settina aside mav not be made after three months have elansed from
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63
the date on which the party making that application had received the arbitral award or, if a
request had been made under Section 33, from the date on which that request had been
disposed of by the Arbitral Tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause
from making the application within the said period of three months it may entertain the
application within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate
and it is so requested by a party, adjourn the proceedings for a period of time determined by
it in order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to
take such other action as in the opinion of Arbitral Tribunal will eliminate the grounds for
setting aside the arbitral award.

(5) An application under this section shall be filed by a party only after issuing a prior notice
to the other party and such application shall be accompanied by an affidavit by the applicant
endorsing compliance with the said requirement.

(6) An application under this section shall be disposed of expeditiously, and in any event,
within a period of one year from the date on which the notice referred to in sub-section (5)
is served upon the other party.”

S S.P. Singla Constructions (P) Ltd. v. BBR (India) (P) Ltd., 2019 SCC OnLine P&H 4287

© State of W.B. v. Associated Contractors, (2015) 1 SCC 32 : (2015) 1 SCC (Civ) 1

7 s.p. Singla Constructions (P) Ltd. v. BBR (India) (P) Ltd., 2019 SCC OnLine P&H 6265

© BBR (India) (P) Ltd. v. S.P. Singhla Constructions (P) Ltd., 2020 SCC OnLine SC 1391

9 Baico v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ)
810

10 See para 20 below. By Act 3 of 2016 proviso to Section 2(2) of the Act has been inserted
with retrospective effect from 23-10-2015, and the provision as substituted/amended by Act
33 of 2019 for clause (a), now reads—

“(2) Scope.—This Part shall apply where the place of arbitration is in India:

Provided that subject to an agreement to the contrary, the provisions of Sections 9, 27 and
clause (b) of sub-section (1) and sub-section (3) of Section 37 shall also apply to
international commercial arbitration, even if the place of arbitration is outside India, and an
arbitral award made or to be made in such place is enforceable and recognised under the
provisions of Part II of this Act.”

' BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234 : (2020) 2 SCC (Civ) 606

12 Section 20(2) also applies when “the seat” as mentioned in the agreement is only a
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63
convenient venue.

13 Shashoua v. Sharma, 2009 EWHC 957 (Comm)

4 Cv. D, 2008 Bus LR 843 : 2007 EWCA Civ 1282 (CA)

15 gection 3 of the English Arbitration Act, 1996 defines “seat” as follows:

“3. The seat of the arbitration.—In this Part “the seat of the arbitration” means the juridical
seat of the arbitration designated—(a) by the parties to the arbitration agreement, or (b) by
any arbitral or other institution or person vested by the parties with powers in that regard, or
(c) by the Arbitral Tribunal if so authorised by the parties, or determined, in the absence of
any such designation, having regard to the parties' agreement and all the relevant
circumstances.”

It will be noticed that this section closely approximates with Section 20 of the Indian
Arbitration Act, 1996. The meaning of “Court” is laid down in Section 105 of the English
Arbitration Act, 1996 whereby the Lord Chancellor may, by order, make provision allocating
and specifying proceedings under the Act which may go to the High Court or to County
Courts.

16 Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678 :
(2017) 3 SCC (Civ) 760

7 Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., (2020) 5 SCC 462 : (2020) 3 SCC
(Civ) 326

18 w2, (1)(e)(ii) in the case of international commercial arbitration, the High Court in
exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions
forming the subject-matter of the arbitration if the same had been the subject-matter of a
suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of
courts subordinate to that High Court;”

9 In Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678 :
(2017) 3 SCC (Civ) 760, the Court after clearing the air on the meaning of Section 20 of the
Arbitration Act, 1996 made it clear that the moment a seat is designated by agreement
between the parties, it is akin to an exclusive jurisdiction clause, which would then vest the
courts at the “seat” with exclusive jurisdiction for purposes of regulating arbitral proceedings
arising out of the agreement between the parties.

2% BGS SGS Soma JV v. NHPC, (2020) 4 SCC 234 : (2020) 2 SCC (Civ) 606 case also examines
and explains case law where the courts have held that so called “seat” mentioned in the
agreement is convenient “venue” an aspect with which we are not concerned in the present
case.

21 gee the principle culled out by Dicey and Morris on the Conflict of Laws (11th Edn., Sweet
and Maxwell, 1987).
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dedared by the Supreme Court in Eastem Book Company v. D B. Modak, (2008) 1 SCC 1 paras 61, 62 &
63
22 Union of India v. Hardy Exploration & Production (India) Inc., (2019) 13 SCC 472 : (2018)
5 SCC (Civ) 790 — In this case the parties had not chosen the seat of arbitration and the
Arbitral Tribunal had also not determined the seat of arbitration. Therefore it was held that
the choice of Kuala Lumpur as the venue of arbitration did not imply that Kuala Lumpur had
become the seat of arbitration.

23 Inox Renewables Ltd. v. Jayesh Electricals Ltd., (2023) 3 SCC 733 : 2021 SCC OnLine SC
448

24 Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd., 2018 SCC OnLine Del 9338

?5 Nivaran Solutions v. Aura Thia Spa Services (P) Ltd., 2016 SCC OnLine Bom 5062

26 Konkola Copper Mines v. Stewarts & Lloyds of India Ltd., 2013 SCC OnLine Bom 777

27 We are not examining and are not required to decide the question— whether there is a
difference between the expression “court” and the “Chief Justice or his nominee” in the
present case.
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