once the “seat” has been chosen, which would then amount to an exclusive jurisdiction clause so far as Courts of the “seat” are concerned. As per the arbitration agreement, in case a dispute was to arise with a foreign contractor, clause 67.3(ii) would apply. Under this sub-clause, a dispute which would amount to 103 an ‘international commercial arbitration’ within the meaning of Section 2(1)(f) of the Arbitration Act, 1996, would have to be finally settled in accordance with the Arbitration Act, 1996 read with the UNCITRAL Arbitration Rules, and in case of any conflict, the Arbitration Act, 1996 is to prevail (as an award made under Part I is considered a domestic award under Section 2(7) of the Arbitration Act, 1996 notwithstanding the fact that it is an award made in an international commercial arbitration). As such arbitration would be an international commercial arbitration which would be decided in India, the Arbitration Act, 1996 is to apply as well. There being no other contra indication in such a situation, either New Delhi or Faridabad, India is the designated “seat” under the agreement, and it is thereafter for the parties to choose as to in which of the two places the arbitration is finally to be held. The dispute is to be settled in accordance with the Arbitration Act, 1996 which, therefore, applies a national body of rules to the arbitration that is to be held either at New Delhi or Faridabad, given the fact that the present arbitration would be Indian and not international. It is clear, therefore, that even in such a scenario, New Delhi/Faridabad, India has been designated as the “seat” of the arbitration proceedings. However, the fact that in all the three appeals before us the proceedings were finally held at New Delhi, and the awards were signed in New Delhi, and not at Faridabad, would lead to the conclusion that both parties have chosen New Delhi as the “seat” of arbitration under Section 20(1) of the Arbitration Act, 1996. This being the case, both parties have, therefore, chosen that the Courts at New Delhi alone would have exclusive jurisdiction over the arbitral proceedings. Therefore, the fact that a part of the cause of action may have arisen at Faridabad would not be relevant once the “seat” has been chosen, which would then amount to an exclusive jurisdiction clause so far as Courts of the “seat” are concerned.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9307 OF 2019
(ARISING OUT OF SLP (CIVIL) NO.25618 OF 2018)
BGS SGS SOMA JV …Petitioner
Versus
NHPC LTD. …Respondent
WITH
CIVIL APPEAL NO. 9308 OF 2019
(ARISING OUT OF SLP (CIVIL) NO. 25848 OF 2018)
WITH
CIVIL APPEAL NO. 9309 OF 2019
(ARISING OUT OF SLP (CIVIL) NO. 28062 OF 2018)
J U D G M E N T
R.F. NARIMAN, J.

  1. Leave granted.
  2. Three appeals before us raise questions as to maintainability of appeals under Section 37 of the Arbitration and Conciliation Act, 1996
    (hereinafter referred to as “the Arbitration Act, 1996”), and, given the
    1
    arbitration clause in these proceedings, whether the “seat” of the arbitration proceedings is New Delhi or Faridabad, consequent upon
    which a petition under Section 34 of the Arbitration Act, 1996 may be
    filed dependent on where the seat of arbitration is located.
  3. At the outset, the facts in SLP (Civil) No.25618 of 2018 are set out as
    follows. On 16.01.2004, the Petitioner was awarded a contract for
    construction of Diversion Tunnels, Coffer Dams, Concrete Gravity
    Dams, Plunge Pools and Cutoff Walls of Subansri Lower Hydroelectric Project on river Subansri, with an installed capacity of 2000 MW,
    stated to be the largest Hydropower project yet in India. The project
    site is located in the lower Subansri districts in the States of Assam
    and Arunachal Pradesh. Clause 67.3 of the agreement between the
    parties provides for dispute resolution through arbitration. Clause 67.3
    reads as follows:
    “Any dispute in respect of which the Employer
    and the Contractor have failed to reach at an amicable settlement pursuant to Sub-Clause 67.1,
    shall be finally settled by arbitration as set forth
    below. The Arbitral Tribunal shall have full power
    to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer.
    (i) A dispute with an Indian Contractor shall
    be finally settled in accordance with the In2
    dian Arbitration and Conciliation Act, 1996,
    or any statutory amendment thereof. The
    arbitral tribunal shall consist of 3 arbitrators, one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators
    so appointed by the Parties and shall act
    as Presiding arbitrator. In case of failure of
    the two arbitrators, appointed by the parties to reach upon a consensus within a
    period of 30 days from the appointment of
    the arbitrator appointed subsequently, the
    Presiding arbitrator shall be appointed by
    the President of the Institution of Engineers
    (India). For the purposes of this SubClause, the term “Indian Contractor”
    means a contractor who is registered in India and is a juridic person created under
    Indian law as well as a joint venture between such a contractor and a Foreign
    Contractor.
    (ii) In the case of a dispute with a Foreign
    Contractor, the dispute shall be finally settled in accordance with the provisions of
    the Indian Arbitration and Conciliation Act,
    1996 and read with UNCITRAL Arbitration
    Rules. The arbitral tribunal shall consist of
    three Arbitrators, one each to be appointed
    by the Employer and the Contractor. The
    third Arbitrator shall be chosen by the two
    Arbitrators so appointed by the Parties and
    shall act as Presiding arbitrator. In case of
    failure of the two arbitrators appointed by
    the parties to reach a consensus within a
    period of 30 days from their appointment
    on the Presiding Arbitrator to be appointed
    subsequently, the Presiding arbitrator shall
    be appointed by the President of the Institution of Engineers (India). For the pur3
    poses of this Clause 67, the term “Foreign
    Contractor” means a contractor who is not
    registered in India and is not a juridic person created under Indian Law. In case of
    any contradiction between Indian Arbitration and Conciliation Act, 1996 and UNCITRAL Arbitration Rules, the provisions in
    the Indian Arbitration and Conciliation Act,
    1996 shall prevail.
    (iii) Arbitration may be commenced prior to or
    after completion of the Works, provided
    that the obligations of the Employers, the
    Engineer, and the Contractor shall not be
    altered by reason of the arbitration being
    conducted during the progress of the
    Works.
    xxx xxx xxx
    (v) If one of the parties fail to appoint its arbitrator in pursuance of sub-clause (i) and (ii)
    above, within 30 days after receipt of the
    notice of the appointment of its arbitrator
    by the other party, then the President of the
    Institution of Engineers (India), both in
    cases of foreign contractors as well as Indian Contractors, shall appoint the arbitrator. A certified copy of the order of the
    President of Institution of Engineers (India),
    making such an appointment shall be furnished to each of the parties.
    (vi) Arbitration Proceedings shall be held at
    New Delhi/Faridabad, India and the language of the arbitration proceedings and
    that of all documents and communications
    between the parties shall be English.
    4
    (vii) The decision of the majority of arbitrators
    shall be final and binding upon both parties. The cost and expenses of Arbitration
    shall be borne in such a manner as determined by the arbitral tribunal. However, the
    expenses incurred by each party in connection with the preparation, presentation
    etc. of its proceedings as also the fees and
    expenses paid to the arbitrator appointed
    by such party on its behalf shall be borne
    by each party itself.”
  4. On 16.05.2011, a Notice of Arbitration was issued by the Petitioner to
    the Respondent, in regard to payment of compensation for losses suffered due to abnormal delays and additional costs as a result of hindrances caused by the Respondent. A three-member Arbitral Tribunal
    was constituted as per clause 67.3 of the agreement under the Arbitration Act, 1996. Pursuant thereto, the Petitioner filed its Statement of
    Claim seeking recovery of an amount of INR 986.60 crores plus CHF
  5. Between August 2011 and August 2016, seventy-one sittings of the Arbitral Tribunal took place at New Delhi. The Tribunal
    then delivered its unanimous award at New Delhi on 26.08.2016, by
    which the claims of the Petitioner aggregating to INR
    424,81,54,096.29 were allowed, together with simple interest at 14%
    per annum till the date of actual payment. On 04.10.2016, in view of
    certain computational and typographical errors in the arbitral award,
    5
    the figure of 424,81,54,096.29 was rectified to INR 424,70,52,126.66.
    On 03.01.2017, being aggrieved by the arbitral award and the rectification thereto, the Respondent filed an application under Section 34
    of the Arbitration Act, 1996 seeking to set aside these awards before
    the Court of the District and Sessions Judge, Faridabad, Haryana. On
    28.04.2017, the Petitioner filed an application under Section 151 read
    with Order VII Rule 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as the “CPC”) and Section 2(1)(e)(i) of the Arbitration Act, 1996, seeking a return of the petition filed under Section 34
    for presentation before the appropriate Court at New Delhi and/or the
    District Judge at Dhemaji, Assam. In November, 2017, after the constitution of a Special Commercial Court at Gurugram, the Section 34
    petition filed at Faridabad was transferred to the said Gurugram Commercial Court and numbered as Arbitration Case No.74 (CIS No.
    ARB/118/2017).
  6. On 21.12.2017, the Special Commercial Court, Gurugram allowed the
    application of the Petitioner, and returned the Section 34 petition for
    presentation to the proper court having jurisdiction in New Delhi. On
    15.02.2018, the Respondent filed an appeal under Section 37 of the
    Arbitration Act, 1996 read with Section 13(1) of the Commercial
    6
    Courts Act, 2015 before the High Court of Punjab and Haryana at
    Chandigarh. On 12.09.2018, the impugned judgment was delivered
    by the Punjab and Haryana High Court, in which it was held that the
    appeal filed under Section 37 of the Arbitration Act, 1996 was maintainable, and that Delhi being only a convenient venue where arbitral
    proceedings were held and not the seat of the arbitration proceedings, Faridabad would have jurisdiction on the basis of the cause of
    action having arisen in part in Faridabad. As a result, the appeal was
    allowed and the judgment of the Special Commercial Court, Gurugram was set aside.
  7. Dr. Abhishek Manu Singhvi, learned Senior Advocate appearing on
    behalf of the Petitioner in SLP (C) No.25618 of 2018, has assailed the
    impugned High Court judgment on both counts. According to him, on
    a combined reading of Section 13 of the Commercial Courts Act, 2015
    and Section 37 of the Arbitration Act, 1996, it becomes clear that Section 13 of the Commercial Courts Act, 2015 only provides the forum
    for challenge, whereas Section 37 of the Arbitration Act, 1996 – which
    is expressly referred to in the proviso to Section 13(1) of the Commercial Courts Act, 2015 – circumscribes the right of appeal. He contended that this when read with Section 5 of the Arbitration Act, 1996,
    7
    makes it clear that only certain judgments and orders are appealable,
    and no appeal lies under any provision outside Section 37 of the Arbitration Act, 1996. He contended that the High Court was manifestly
    wrong when it said that the present appeal was appealable under
    Section 37(1)(c) of the Arbitration Act, 1996 as being an appeal
    against an order refusing to set aside an arbitral award under Section
    34 of the Arbitration Act, 1996. According to Dr. Singhvi, an order
    which allows an application under Section 151 read with Order VII
    Rule 10 of the CPC can by no stretch of the imagination amount to an
    order refusing to set aside an arbitral award under Section 34 of the
    Arbitration Act, 1996. For this proposition, he strongly relied upon on
    our judgment in Kandla Export Corporation & Anr. v. M/s OCI Corporation & Anr. (2018) 14 SCC 715. On the second point, he read
    out the impugned judgment in detail, and stated that the ultimate conclusion that New Delhi was only a “venue” and not the “seat” of the arbitration was incorrect, as the parties have chosen to have sittings at
    New Delhi, as a result of which it is clear that the Arbitral Tribunal considered that the award made at New Delhi would be made at “the
    seat” of the arbitral proceedings between the parties. He further
    added that it was clear that even if both New Delhi and Faridabad had
    8
    jurisdiction, New Delhi being the choice of the parties, the principle
    contained in Hakam Singh v. M/s. Gammon (India) Ltd., (1971) 1
    SCC 286, would govern. He referred in copious detail to many judgments of this Court, including the Five Judge Bench in Bharat Aluminium Co. (BALCO) v. Kaiser Aluminium Technical Service, Inc.,
    (2012) 9 SCC 552, Indus Mobile Distribution Private Limited v.
    Datawind Innovations Private Limited & Ors., (2017) 7 SCC 678,
    and various other judgments to buttress his submissions. According
    to him, the recent judgment delivered in Union of India v. Hardy Exploration and Production (India) Inc. 2018 SCC Online SC 1640
    queers the pitch, in that it is directly contrary to the Five Judge bench
    decision in BALCO (supra). It is only as a result of the confusion
    caused by judgments such as Hardy Exploration and Production
    (India) Inc. (supra) that the impugned judgment has arrived at the
    wrong conclusion that New Delhi is not the “seat”, but only the
    “venue” of the present arbitral proceedings. He, therefore, in the
    course of his submissions argued that this confusion should be removed, and exhorted us to declare that Hardy Exploration and Production (India) Inc. (supra) was not correctly decided, being contrary
    to the larger bench in BALCO (supra).
    9
  8. Dr. Singhvi in the course of his submissions also referred pointedly to
    paragraph 96 of BALCO (supra), and argued that not only was the
    example given in the said paragraph contrary to the theory of concurrent jurisdiction propounded therein, but was also contrary to subsequent paragraphs in the said judgment, in which it was clearly held
    that a clause in an agreement stating the “seat” of arbitration is akin to
    an exclusive jurisdiction clause, which would put paid to any theory of
    concurrent jurisdiction. As a matter of fact, two subsequent decisions
    have understood the ratio of BALCO (supra) to be that once the
    “seat” is indicated in an arbitration agreement, it is akin to an exclusive jurisdiction clause, which would oust the jurisdiction of courts
    other than courts at the seat. For this purpose he expressly referred
    to and relied upon Reliance Industries Ltd. v. Union of India (2014)
    7 SCC 603 and Indus Mobile Distribution Pvt. Ltd. (supra).
  9. Shri Arunabh Chowdhury, appearing in SLP (Civil) No. 25848 of 2018,
    argued that unlike the first SLP argued by Dr. Singhvi, in his case, the
    Notice for Arbitration was sent to the Assam site-office of the Respondent, and not routed through the Assam office to be sent to the Head
    Office at Faridabad, thereby making the observations based on Section 21 of the Arbitration Act,1996 in the impugned judgment inappli10
    cable on the facts of his case. He supported Dr. Singhvi’s argument
    that the appeal filed under Section 37 of the Arbitration Act, 1996
    would not be maintainable, and cited several judgments, which will be
    dealt with a little later.
  10. Shri Ankit Chaturvedi, appearing in SLP (Civil) No. 28062 of 2018,
    stressed one important difference in the facts of his case, which is,
    that the arbitral award made in his case expressly referred to Section
    31(4) of the Arbitration Act, 1996, and stated that the place of arbitration, as determined in accordance with Section 20 of the Arbitration
    Act, 1996, was New Delhi. Therefore, this being the “seat” as determined by the Arbitral Tribunal in this case, a challenge under Section
    34 of the Arbitration Act, 1996 could only be made in the courts at
    New Delhi.
  11. Smt. Maninder Acharya, learned Additional Solicitor General, supported the judgment under appeal. She first argued that the reasoning
    of the impugned judgment, that an order passed under Section 151
    read with Order VII Rule 10 of the CPC would amount to a refusal to
    set aside an arbitral award, is correct, and relied heavily upon a Division Bench judgment of the Delhi High Court in Antrix Corporation
    Ltd. v. Devas Multimedia Pvt. Ltd. 2018 SCC Online Del 9338 for
    11
    this purpose. On the second point, she argued that the arbitration
    clause did not expressly state that either New Delhi or Faridabad was
    to be the seat of the Arbitral Tribunal. Therefore, the arbitration clause
    only referred to a convenient venue, and the fact that the sittings were
    held at New Delhi, therefore, would not make New Delhi the seat of
    the arbitration under Section 20(1) of the Arbitration Act, 1996. According to her, since the agreements in the present case were signed
    in Faridabad, and since notices were sent by the Petitioners to the
    Respondent’s Faridabad office, part of the cause of action clearly
    arose in Faridabad, as a result of which the courts in Faridabad would
    be clothed with jurisdiction to decide a Section 34 application. She
    stressed the fact that in BALCO (supra), even assuming that New
    Delhi was the seat of arbitration, both New Delhi and Faridabad would
    have concurrent jurisdiction – New Delhi being a neutral forum in
    which no part of the cause of action arose, and Faridabad being a
    chosen forum where a part of the cause of action has arisen. When
    read with Section 42 of the Arbitration Act, 1996, since the Court at
    Faridabad was first approached by filing an application under Section
    34 of the Arbitration Act,1996, that Court alone would have jurisdiction, as a result of which the impugned judgment ought to be affirmed.
    12
    Maintainability of the appeals under Section 37 of the Arbitration
    Act, 1996
  12. Section 37(1) of the Arbitration Act, 1996 reads as follows:
    “37. Appealable Orders.-
    (1)An appeal shall lie from the following orders (and
    from no others) to the Court authorised by law to
    hear appeals from original decrees of the Court
    passing the order, namely:-
    (a)refusing to refer the parties to arbitration under
    section 8;
    (b)granting or refusing to grant any measure under
    section 9;
    (c)setting aside or refusing to set aside an arbitral
    award under section 34.”
  13. Section 13 of the Commercial Courts Act, 2015 reads as follows:
    “13. Appeals from decrees of Commercial Courts
    and Commercial Divisions.-
    (1)Any person aggrieved by the judgment or order of
    a Commercial Court below the level of a District
    Judge may appeal to the Commercial Appellate
    Court within a period of sixty days from the date of
    judgment or order.
    (1A)Any person aggrieved by the judgment or order of
    a Commercial Court at the level of District Judge
    exercising original civil jurisdiction or, as the case
    may be, Commercial Division Bench of a High
    Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty
    days from the date of the judgment of order:
    13
    Provided that an appeal shall lie from such orders
    passed by the Commercial Division or a Commercial Court that are specifically enumerated in Order
    XLIII of the Code of Civil Procedure, 1908 (5 of
    1908) as amended by this Act and Section 37 of
    the Arbitration and Conciliation Act, 1996 (26 of
    1996).
    (2)Notwithstanding anything contained in any other
    law for the time being in force or Letters Patent of
    a High Court, no appeal shall lie from any other order or decree of a Commercial Division or Commercial Court otherwise than in accordance with
    the provisions of the Act.”
  14. The interplay between Section 37 of the Arbitration Act, 1996 and
    Section 13 of the Commercial Courts Act, 2015, has been laid down
    in some detail in the judgment in Kandla Export Corporation
    (supra). The precise question that arose in Kandla Export Corporation (supra) was as to whether an appeal, which was not maintainable under Section 50 of the Arbitration Act,1996, is nonetheless
    maintainable under Section 13(1) of the Commercial Courts Act,
  15. In this context, after setting out various provisions of the Commercial Courts Act, 2015 and the Arbitration Act, 1996, this Court
    held:
    “13. Section 13(1) of the Commercial Courts Act, with
    which we are immediately concerned in these appeals, is in two parts. The main provision is, as has
    been correctly submitted by Shri Giri, a provision
    14
    which provides for appeals from judgments, orders
    and decrees of the Commercial Division of the High
    Court. To this main provision, an exception is carved
    out by the proviso…”
  16. The proviso goes on to state that an appeal shall
    lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order 43 of the Code of Civil Procedure
    Code, 1908, and Section 37 of the Arbitration Act. It
    will at once be noticed that orders that are not specifically enumerated under Order 43 CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are
    appeals that can be made to the Commercial Appellate Division of a High Court.
  17. Thus, an order which refers parties to arbitration
    under Section 8, not being appealable under Section
    37(1)(a), would not be appealable under Section
    13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2)
    and (3) of Section 16 of the Arbitration Act would
    equally not be appealable under Section 37(2)(a)
    and, therefore, under Section 13(1) of the Commercial Courts Act.
    xxx xxx xxx
  18. Given the judgment of this Court in Fuerst Day
    Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports
    Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] ,
    which Parliament is presumed to know when it enacted the Arbitration Amendment Act, 2015, and given
    the fact that no change was made in Section 50 of the
    Arbitration Act when the Commercial Courts Act was
    brought into force, it is clear that Section 50 is a provision contained in a self-contained code on matters
    pertaining to arbitration, and which is exhaustive in
    nature. It carries the negative import mentioned in
    15
    para 89 of Fuerst Day Lawson [Fuerst Day Lawson
    Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011)
    4 SCC (Civ) 178] that appeals which are not mentioned therein, are not permissible. This being the
    case, it is clear that Section 13(1) of the Commercial
    Courts Act, being a general provision vis-à-vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by
    Section 50 of the Arbitration Act.
  19. However, the question still arises as to why Section 37 of the Arbitration Act was expressly included in
    the proviso to Section 13(1) of the Commercial Courts
    Act, which is equally a special provision of appeal
    contained in a self-contained code, which in any case
    would be outside Section 13(1) of the Commercial
    Courts Act. One answer is that this was done ex
    abundanti cautela. Another answer may be that as
    Section 37 itself was amended by the Arbitration
    Amendment Act, 2015, which came into force on the
    same day as the Commercial Courts Act, Parliament
    thought, in its wisdom, that it was necessary to emphasise that the amended Section 37 would have
    precedence over the general provision contained in
    Section 13(1) of the Commercial Courts Act. Incidentally, the amendment of 2015 introduced one more
    category into the category of appealable orders in the
    Arbitration Act, namely, a category where an order is
    made under Section 8 refusing to refer parties to arbitration. Parliament may have found it necessary to
    emphasise the fact that an order referring parties to
    arbitration under Section 8 is not appealable under
    Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the Commercial Courts
    Act. Whatever may be the ultimate reason for including Section 37 of the Arbitration Act in the proviso to
    Section 13(1), the ratio decidendi of the judgment
    in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC
    (Civ) 178] would apply, and this being so, appeals
    16
    filed under Section 50 of the Arbitration Act would
    have to follow the drill of Section 50 alone.
  20. This, in fact, follows from the language of Section
    50 itself. In all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides an
    appeal. Having provided for an appeal, the forum of
    appeal is left “to the Court authorised by law to hear
    appeals from such orders”. Section 50 properly read
    would, therefore, mean that if an appeal lies under
    the said provision, then alone would Section 13(1) of
    the Commercial Courts Act be attracted as laying
    down the forum which will hear and decide such an
    appeal.
    xxx xxx xxx
  21. The matter can be looked at from a slightly different angle. Given the objects of both the statutes, it is
    clear that arbitration itself is meant to be a speedy
    resolution of disputes between parties. Equally, enforcement of foreign awards should take place as
    soon as possible if India is to remain as an equal
    partner, commercially speaking, in the international
    community. In point of fact, the raison d’être for the
    enactment of the Commercial Courts Act is that commercial disputes involving high amounts of money
    should be speedily decided. Given the objects of both
    the enactments, if we were to provide an additional
    appeal, when Section 50 does away with an appeal
    so as to speedily enforce foreign awards, we would
    be turning the Arbitration Act and the Commercial
    Courts Act on their heads. Admittedly, if the amount
    contained in a foreign award to be enforced in India
    were less than Rs 1 crore, and a Single Judge of a
    High Court were to enforce such award, no appeal
    would lie, in keeping with the object of speedy enforcement of foreign awards. However, if, in the same
    fact circumstance, a foreign award were to be for Rs
    1 crore or more, if the appellants are correct, enforce17
    ment of such award would be further delayed by providing an appeal under Section 13(1) of the Commercial Courts Act. Any such interpretation would lead to
    absurdity, and would be directly contrary to the object
    sought to be achieved by the Commercial Courts Act
    viz. speedy resolution of disputes of a commercial nature involving a sum of Rs 1 crore and over. For this
    reason also, we feel that Section 13(1) of the Commercial Courts Act must be construed in accordance
    with the object sought to be achieved by the Act. Any
    construction of Section 13 of the Commercial Courts
    Act, which would lead to further delay, instead of an
    expeditious enforcement of a foreign award must,
    therefore, be eschewed. Even on applying the doctrine of harmonious construction of both statutes, it is
    clear that they are best harmonised by giving effect to
    the special statute i.e. the Arbitration Act, vis-à-vis the
    more general statute, namely, the Commercial Courts
    Act, being left to operate in spheres other than arbitration.”
  22. Given the fact that there is no independent right of appeal under Section 13(1) of the Commercial Courts Act, 2015, which merely provides
    the forum of filing appeals, it is the parameters of Section 37 of the Arbitration Act,1996 alone which have to be looked at in order to determine whether the present appeals were maintainable. Section 37(1)
    makes it clear that appeals shall only lie from the orders set out in
    sub-clauses (a), (b) and (c) and from no others. The pigeonhole that
    the High Court in the impugned judgement has chosen to say that the
    appeals in the present cases were maintainable is sub-clause (c). According to the High Court, even where a Section 34 application is or18
    dered to be returned to the appropriate Court, such order would
    amount to an order “refusing to set aside an arbitral award under Section 34”.
  23. Interestingly, under the proviso to Section 13(1A) of the Commercial
    Courts Act, 2015, Order XLIII of the CPC is also mentioned. Order
    XLIII Rule(1)(a) reads as follows:
    “1. Appeal from orders.- An appeal shall lie from the
    following orders under the provisions of Section 104,
    namely-
    (a)an order under Rule 10 of Order VII returning a
    plaint to be presented to the proper Court except
    where the procedure specified in rule 10A of Order
    VII has been followed;”
  24. This provision is conspicuous by its absence in Section 37 of the Arbitration Act, 1996, which alone can be looked at for the purpose of filing appeals against orders setting aside, or refusing to set aside
    awards under Section 34. Also, what is missed by the impugned judgment is the words “under Section 34”. Thus, the refusal to set aside
    an arbitral award must be under Section 34, i.e., after the grounds set
    out in Section 34 have been applied to the arbitral award in question,
    and after the Court has turned down such grounds. Admittedly, on
    the facts of these cases, there was no adjudication under Section 34
    of the Arbitration Act, 1996 – all that was done was that the Special
    19
    Commercial Court at Gurugram allowed an application filed under
    Section 151 read with Order VII Rule 10 CPC, determining that the
    Special Commercial Court at Gurugram had no jurisdiction to proceed further with the Section 34 application, and therefore, such application would have to be returned to the competent court situate at
    New Delhi.
  25. Shri Anurabh Chowdhury referred to a number of judgments in which
    a well-settled proposition was elucidated, i.e. that an appeal is a creature of statute, and must either be found within the four corners of the
    statute, or not be there be at all. In support thereof, he referred to Municipal Corporation of Delhi & Ors. v. International Security & Intelligence Agency Ltd. (2004) 3 SCC 250 (at paragraphs 14 and
    15), and Arcot Textile Mills Ltd. v. Regional Provident Fund Commissioner and Ors. (2013) 16 SCC 1 (at paragraph 20). He also referred to a recent Delhi High Court judgment reported as South Delhi
    Municipal Corporation v. Tech Mahindra EFA (OS) (Comm.) 3 of
    2019, in which the Delhi High Court held that an order of a Single
    Judge, which directed the deposit of 50% of the awarded amount,
    would not be appealable under Section 37 of the Arbitration Act, 1996
    20
    read with the Commercial Courts Act, 2015. In the course of discussion the Delhi High Court said:
    “12. In view of the above discussions, we conclude
    that the present appeal is not maintainable. The appellant’s remedy clearly lies elsewhere. An attempt
    was made to urge that no litigant can be deprived of
    remedy if there is a grievance: ubi jus ibi remedium;
    however, that argument is wholly without substance
    because an appeal, it has been repeatedly emphasised, is a specific creation of statute and cannot be
    claimed as a matter of right. This was explained
    pithily in Ganga Bai v. Vijay Kumar, (1974) 2 SCC
    393, in the following terms:
    “There is a basic distinction between the right of suit
    and the right of appeal. There is an inherent right in
    every person to bring suit of a civil nature and unless
    the suit is barred by statute one may, at one’s peril,
    bring a suit of one’s choice. It is no answer to a suit
    howsoever frivolous the claim, that the law confers no
    right to sue. A suit for its maintainability requires no
    authority of law and it is enough that no statute bars
    the suit. But the position in regard to appeals is quite
    the opposite. The right of appeal inheres in no one
    and therefore an appeal for its maintainability must
    have the clear authority of law. That explains why the
    right of appeal is described as a creature of statute.
  26. In view of the above discussion, it is held that the
    present appeal is plainly not maintainable by virtue of
    provisions of the Commercial Courts Act, 2015; the
    appeal is therefore dismissed. No costs.”
  27. Shri Chowdhury also referred to another Delhi High Court judgment
    reported as Hamanprit Singh Sidhu v. Arcadia Shares & Stock
    Brokers Pvt. Ltd 2016 234 DLT 30 (DB), in which a learned Single
    21
    Judge of the Delhi High Court allowed an application for condonation
    of delay in filing a Section 34 petition. The Division Bench, in holding
    that an appeal against such an order would not be maintainable under
    Section 37 of the Arbitration Act, 1996, read with the Commercial
    Courts Act, 2015 held:
    “10. Coming to Section 37(1), it is evident that an appeal can lie from Coming to Section 37(1), it is evident that an appeal can lie from only the orders specified in clauses (a), (b) or (c). In other words, an appeal under Section 37 would only be maintainable
    against (a) an order refusing to refer the parties to arbitration under Section 8 of the A&C Act; (b) an order
    granting or refusing to grant any measure under Section 9 of the A&C Act; or (c) an order setting aside or
    refusing to set aside an arbitral award under Section
    34 of the A&C Act. The impugned order is clearly not
    relatable to Sections 8 or 9 of the A&C Act. It was
    sought to be contended by the learned counsel for
    the appellant that the present appeal would fall within
    Section 37(1) (c) which relates to an order “setting
    aside” or “refusing to set aside” an arbitral award under Section 34. We are unable to accept this proposition. By virtue of the impugned order, the arbitral
    award dated 10.09.2013 has not been set aside. Nor
    has the court, at this stage, refused to set aside the
    said arbitral award under Section 34 of the A&C Act.
    In fact, the appellant in whose favour the award has
    been made, would only be aggrieved if the award
    were to have been set aside in whole or in part. That
    has not happened. What the learned single Judge
    has done is to have condoned the delay in re-filing of
    the petition under Section 34. This has not, in any
    way, impacted the award.”
    22
  28. The reasoning in this judgment commends itself to us, as a distinction
    is made between judgments which either set aside, or refuse to set
    aside, an arbitral award after the court applies its mind to Section 34
    of the Arbitration Act, 1996, as against preliminary orders of condonation of delay, which do not in any way impact the arbitral award that
    has been assailed.
  29. However, Smt. Acharya relied heavily upon the Division Bench judgment of the Delhi High Court in Antrix Corporation Ltd. (supra). On
    the facts of that case, on 28.02.2017, a learned Single Judge of the
    Delhi High Court ruled that Antrix’s petition under Section 9 of the Arbitration Act, 1996 before the Bangalore Court was not maintainable,
    and that Devas’ petition under Section 9 was maintainable, the bar
    under Section 42 of the Arbitration Act, 1996 being inapplicable. The
    order also held that consequently, Antrix’s petition under Section 34 of
    the Arbitration Act, 1996 before the Bangalore City Civil Court would
    not be maintainable, inasmuch as Devas’ petition filed in Delhi under
    Section 9 was filed earlier. The learned Single Judge then listed the
    matter for hearing on merits and directed Antrix to file an affidavit of
    an authorised officer, enclosing therewith its audited Balance Sheets,
    and Profit and Loss Accounts for the past three years. Antrix then ap23
    pealed against this order, to which a preliminary objection was taken,
    stating that this appeal would not be maintainable under Section 37 of
    the Arbitration Act, 1996. After setting out Section 13 of the Commercial Courts Act, 2015 and Sections 37 and 42 of the Arbitration Act,
    1996, the Division Bench noticed Hamanprit Singh Sidhu (supra) in
    paragraph 39, without at all adverting to paragraph 10 of the judgment
    (which is set out hereinabove). Thereafter, the Court held as follows:
    “42. While undeniably, the Learned Single Judge in
    the impugned order has not decided the Section 9 petition finally and had listed the matter for hearing on
    merits, Antrix states that the impugned order is indistinguishable from an order under Section 9. Devas
    however, argued that the sequence of events has not
    been completed. Antrix should face an adverse order
    under Section 9 before it can approach this court in
    appeal. On this issue, significant reliance has been
    placed on the decision of the Madras High Court
    in Samson Maritime (supra). In that case, the Court
    held:
    “Learned counsel appearing for the respondent made
    an attempt to contend that the application seeking for
    furnishing of details of assets cannot be construed as
    an interim measure or interim relief contemplated under section 9 of the said Act. I am not convinced to
    accept the said contention for the reason that those
    details are sought for by the applicant only to seek for
    consequential or follow up relief in the event of the respondent’s failure to furnish securities. Therefore, as
    the relief sought for in this application is having a direct bearing on the relief sought for in the other applications seeking for furnishing securities, it cannot be
    said that this relief seeking for details of the assets is
    24
    outside the scope of Section 9. Therefore, I find that
    the application filed seeking for details of the assets
    is also maintainable.”
  30. The Court in Samson Maritime (supra) reasoned
    that an application seeking for furnishing of details of
    assets would also amount to an interim measure under Section 9, because the reason that those details
    are sought are only to seek consequential or follow
    up relief in the event of the respondent’s failure to furnish securities. Therefore, an order mandating a party
    to disclose his assets or file his accounts would also
    be an interim measure within the meaning of Section
  31. In this case, through Paragraph 57 of the impugned order, the Learned Single Judge had directed
    Antrix to file an affidavit of an authorised officer, enclosing therewith its audited balance sheets and profit
    and loss accounts for the past three years. Keeping in
    mind the view of the Court in Samson Maritime (supra), which this Court is in agreement with,
    this would also in effect be a Section 9 order as those
    details are sought for the purpose of adjudicating
    whether consequential relief could be given to Devas
    of securing the amount due from the arbitral award
    against Antrix. Moreover, this Court cannot take a
    doctrinaire and unbending approach in this matter,
    when it is clear that Antrix has suffered all but one remaining blow through the impugned order, and therefore, the Court should not wait till it suffers the final
    blow (that of the final Section 9 order) before it can
    assume jurisdiction over the appeal. The court’s direction to Antrix furnish an affidavit along with the particulars sought, is to aid its order with respect to a
    possible distraint, attachment or further such consequential order towards interim relief. Such an order
    would not be made unless the court directs this as a
    prelude, or important step towards the inevitable interim order, which would be just consequential.
    Therefore, the Court finds that Antrix’s appeal against
    the impugned order is maintainable.
    25
  32. This court also finds merit in Antrix’s argument
    that as regards the single judge’s observations that
    the Bangalore court cannot proceed with the matter,
    the impugned order is really final. It precludes in effect, Antrix from proceeding with its Section 34 petition before that court (in turn based on the pending
    Section 9 petition before that court). If Antrix were to
    accept the ruling, the effect would be to denude the
    Bangalore court of jurisdiction. It was contended-and
    correctly, in this court’s opinion that whereas a court
    acts within jurisdiction in deciding whether it has or
    does not have jurisdiction over a cause of a matter,
    the declaration by it about the lack of jurisdiction of
    another court, based on the appreciation of the matter
    before the latter court is undeniably an adverse order.
    Allowing that to stand would prejudice Antrix for all
    times.”
  33. It can be seen that the reasoning in this judgment would have no application to the facts of the present case. The Division Bench held that
    directing Antrix to file an affidavit, enclosing therewith its audited Balance Sheets and Profit and Loss Account for the last three years, is itself an interim order passed under Section 9 of the Arbitration Act,
  34. The further reasoning of the Court that the direction to Antrix to
    furnish an affidavit is to aid a future interim order, which would be just
    consequential, does not commend itself to us. A step towards an interim order would not amount to granting, or refusing to grant, any
    measure under Section 9 of the Arbitration Act, 1996. The case is also
    distinguishable for the reason that, as regards the Bangalore Court,
    26
    which cannot proceed further with the matter, the impugned order
    therein is really final and would, therefore, also be appealable under
    Section 37. For all these reasons, this judgment is wholly distinguishable and would not apply to the facts of the present case. We may
    also advert to the fact that our judgment in Kandla (supra) was delivered on 07.02.2018, and was missed by the Division Bench in Antrix
    Corporation Ltd. (supra), as the Division Bench had reserved judgment on 06.12.2017, even though it ultimately pronounced the judgment on 30.05.2018. The judgment in South Delhi Municipal Corporation (supra) was decided after reference was made to Kandla
    (supra), resulting in a deposit order being held to be not appealable
    under Section 37 of the Arbitration Act, 1996.
  35. It is clear, therefore, that the appeals filed in the present case do not
    fall within Section 37 of the Arbitration Act,1996 and are not maintainable.
  36. We now examine the second part of the challenge made by the Petitioners to the impugned judgment, which relates to the determination
    of the “seat” of the arbitral proceedings between the parties. The impugned judgment of the Punjab and Haryana High Court referred to
    BALCO (supra) and Indus Mobile Distribution Pvt. Ltd. (supra),
    27
    and other judgments of this Court, in order to arrive at the conclusion
    that the arbitration clause in the present case does not refer to the
    “seat” of arbitration, but only refers to the “venue” of arbitration. Consequently, the impugned judgment holds that since a part of the
    cause of action had arisen in Faridabad, and the Faridabad Commercial Court was approached first, the Faridabad Court alone would
    have jurisdiction over the arbitral proceedings, and the courts at New
    Delhi would have no such jurisdiction. The correctness of these
    propositions has been vehemently assailed before us, and it is therefore important to lay down the law on what constitutes the “juridical
    seat” of arbitral proceedings, and whether, once the seat is delineated
    by the arbitration agreement, courts at the place of the seat would
    alone thereafter have exclusive jurisdiction over the arbitral proceedings.
    The juridical seat of the arbitral proceedings
    28
  37. The Arbitration Act, 1940 did not refer to the “juridical seat” of the arbitral proceedings at all. Under the scheme of the Arbitration Act, 1940,
    Section 14 stated as follows:
    “14. Award to be signed and filed.-
    (1)When the arbitrators or umpire have made their
    award, they shall sign it and shall give notice in
    writing to the parties of the making and signing
    thereof and of the amount of fees and charges
    payable in respect of the arbitration and award.
    (2)The arbitrators or umpire shall, at the request of
    any party to the arbitration agreement or any person claiming under such party or if so directed by
    the Court and upon payment of the fees and
    charges due in respect of the arbitration and
    award and of the costs and charges of filing the
    award, cause the award or a signed copy of it, together with any depositions and documents which
    may have been taken and proved before them, to
    be filed in Court, and the Court shall thereupon
    give notice to the parties of the filing of the award.
    (3) Where the arbitrators or umpire state a special
    case under clause (b) of Section 13, the Court, after giving notice to the parties and hearing them,
    shall pronounce its opinion thereon and such
    opinion shall be added to, and shall form part of,
    the award.
  38. When the award was signed and filed in Court, a judgment in terms of
    the award had then to be made as follows:
    “17. Judgment in terms of award.- Where the Court
    sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set
    aside the award, the Court shall, after the time for
    29
    making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgement according
    to the award, and upon the judgment so pronounced
    a decree shall follow, and no appeal shall lie from
    such a decree except on the ground that it is in excess of, or not otherwise in accordance with, the
    award.”
  39. It was in this setting that “Court” was defined by Section 2(c) of the Arbitration Act, 1940 as follows:
    “2. Definitions.- In this Act, unless there is anything
    repugnant in the subject or the context,
    xxx xxx xxx
    (c)“Court” means a Civil Court having jurisdiction to
    decide the questions forming the subject-matter of
    the reference if the same had been the subjectmatter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21,
    include a Small Cause Court;”
  40. Section 31, which dealt with the Court in which an award may be filed
    then stated as follows:
    “31. Jurisdiction.
    (1)Subject to the provisions of this Act, an award may
    be filed in any Court having jurisdiction in the matter to which the reference relates.
    (2)Notwithstanding anything contained in any other
    law for the time being in force and save as otherwise provided in this Act, all questions regarding
    the validity, effect or existence of an award or an
    arbitration agreement between the parties to the
    30
    agreement- or persons claiming under them shall
    be decided by the Court in which the award under
    the agreement has been, or may be, filed, and by
    no other Court.
    (3)All applications regarding the conduct of arbitration
    proceedings or otherwise arising out of such proceedings shall be made to the Court where the
    award has been, or may be, filed, and to no other
    Court.
    (4)Notwithstanding anything contained elsewhere in
    this Act or in any other law for the time being in
    force, where in any reference any application under this Act has been made in a Court competent
    to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings-, and all subsequent applications arising, out of that reference,
    and the arbitration proceedings shall be made in
    that Court and in no other Court.”
  41. It will be noticed that in this statutory setting, the “place” in which the
    award is made is not referred to at all. Given this fact, the “Court” was
    defined as any Civil Court having jurisdiction to decide questions
    forming the subject matter of the reference to arbitration if the same
    had been the subject matter of a suit.
  42. The UNCITRAL Model Law on International Commercial Arbitration
    (as adopted by the United Nations Commission on International Trade
    Law on 21 June 1985) (hereinafter referred to as the “UNCITRAL
    Model Law”) was then adopted by this country. The UNCITRAL Model
    31
    Law introduced the concept of “place” or “seat” of the arbitral proceedings as follows:
    “Article 1. Scope of application
    xxx xxx xxx
    (2)The provisions of this Law, except articles 8, 9, 35
    and 36, apply only if the place of arbitration is in
    the territory of this State.
    xxx xxx xxx
    Article 2. Definitions and rules of interpretation
    xxx xxx xxx
    (c)“court” means a body or organ of the judicial system of a State;
    xxx xxx xxx
    Article 6. Court or other authority for certain functions of arbitration assistance and supervision
    The functions referred to in articles 11(3), 11(4),
    13(3), 14, 16(3) and 34(2) shall be performed by …
    [Each State enacting this model law specifies the
    court, courts or, where referred to therein, other authority competent to perform these functions.]
    xxx xxx xxx
    Article 20. Place of arbitration
    (1) The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by the arbitral tribunal having
    32
    regard to the circumstances of the case, including the
    convenience of the parties.
    (2) Notwithstanding the provisions of paragraph (1) of
    this article, 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 goods, other property or documents.
    xxx xxx xxx
    Article 31. Form and contents of award
    xxx xxx xxx
    (3) The award shall state its date and the place of arbitration as determined in accordance with article
    20(1). The award shall be deemed to have been
    made at that place.”
  43. The Arbitration Act, 1996 repealed the Arbitration Act, 1940. As is
    stated in its preamble, the Arbitration Act, 1996 adopted provisions of
    the UNCITRAL Model Law, as they had made a significant contribution to the establishment of a unified legal framework for the fair and
    efficient settlement of disputes arising in international commercial relations.
  44. The Arbitration Act, 1996 refers to “the place” of arbitration and defines ‘Court’, and indicates which Courts have jurisdiction in relation to
    arbitral proceedings in several sections in Part I. Section 2(1)(e) and
    Section 2(2) of the Arbitration Act, 1996 are as follows:
    33
    “2.Definitions.-
    (1) In this Part, unless the context otherwise requires,-
    xxx xxx xxx
    (e)“Court” means-
    (i) in case of an arbitration other than international 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;
    (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 a suit 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;
    xxx xxx xxx
    (2) 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 (a) 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
    34
    made or to be made in such place is enforceable
    and recognised under the provisions of Part II of
    this Act.
  45. Sections 20, 31(4) and 42 of the Arbitration Act, 1996 read as follows:
    “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.”
    “31. Form and contents of arbitral award.-
    xxx xxx xxx
    (4)The arbitral award shall state its date and the place of
    arbitration as determined in accordance with section
    20 and the award shall be deemed to have been
    made at that place.”
    “42. Jurisdiction.- Notwithstanding anything contained
    elsewhere in this Part or 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
    any 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 no other Court.”
    35
  46. It will thus be seen that the new provisions contained in Sections 20
    and 31(4) of the Arbitration Act, 1996 are a replication of Articles 20
    and 31(3) of the UNCITRAL Model Law, in which pride of place is
    given to the juridical seat of the arbitral proceedings. However, the
    definition of “court” in Section 2(1)(e) of the Arbitration Act, 1996 continues the definition contained in the Arbitration Act, 1940, but replaces any and every civil court by only the principal civil court of original jurisdiction in a district, and includes the High Court in exercise of
    its ordinary civil jurisdiction. Section 42 of the Arbitration Act, 1996
    also substantially follows the drill of Section 31(4) of the Arbitration
    Act, 1940.
  47. It can thus be seen that given the new concept of “juridical seat” of
    the arbitral proceedings, and the importance given by the Arbitration
    Act, 1996 to this “seat”, the arbitral award is now not only to state its
    date, but also the place of arbitration as determined in accordance
    with Section 20. However, the definition of “Court” contained in Section 2(1)(c) of the Arbitration Act, 1940, continued as such in the Arbitration Act, 1996, though narrowed to mean only principal civil court
    and the High Court in exercise of their original ordinary civil jurisdiction. Thus, the concept of juridical seat of the arbitral proceedings and
    36
    its relationship to the jurisdiction of courts which are then to look into
    matters relating to the arbitral proceedings – including challenges to
    arbitral awards – was unclear, and had to be developed in accordance
    with international practice on a case by case basis by this Court.
  48. Some of the early decisions of this Court did not properly distinguish
    between “seat” and “venue” of an arbitral proceeding. The Five Judge
    Bench in BALCO (supra) dealt with this problem as follows:
    “75. We are also unable to accept the submission of
    the learned counsel for the appellants that the Arbitration Act, 1996 does not make seat of the arbitration
    as the centre of gravity of the arbitration. On the contrary, it is accepted by most of the experts that in
    most of the national laws, arbitrations are anchored to
    the seat/place/situs of arbitration. Redfern in Para
    3.54 concludes that “the seat of the arbitration is thus
    intended to be its centre of gravity.” [Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and
    Hunter on International Arbitration (5th Edn., Oxford
    University Press, Oxford/New York 2009).] This, however, does not mean that all the proceedings of the
    arbitration have to take place at the seat of the arbitration. The arbitrators at times hold meetings at more
    convenient locations. This is necessary as arbitrators
    often come from different countries. It may, therefore,
    on occasions be convenient to hold some of the
    meetings in a location which may be convenient to all.
    Such a situation was examined by the Court of Appeal in England in Naviera Amazonica Peruana
    S.A. v. Compania International de Seguros del
    Peru [(1988) 1 Lloyd’s Rep 116 (CA)] wherein at p.
    121 it is observed as follows:
    37
    “The preceding discussion has been on the basis that
    there is only one ‘place’ of arbitration. This will be the
    place chosen by or on behalf of the parties; and it will
    be designated in the arbitration agreement or the
    terms of reference or the minutes of proceedings or in
    some other way as the place or ‘seat’ of the
    arbitration. This does not mean, however, that the
    Arbitral Tribunal must hold all its meetings or hearings
    at the place of arbitration. International commercial
    arbitration often involves people of many different
    nationalities, from many different countries. In these
    circumstances, it is by no means unusual for an
    Arbitral Tribunal to hold meetings—or even hearings
    —in a place other than the designated place of
    arbitration, either for its own convenience or for the
    convenience of the parties or their witnesses…. It
    may be more convenient for an Arbitral Tribunal
    sitting in one country to conduct a hearing in another
    country — for instance, for the purpose of taking
    evidence…. In such circumstances each move of the
    Arbitral Tribunal does not of itself mean that the seat
    of arbitration changes. The seat of arbitration remains
    the place initially agreed by or on behalf of the
    parties.”
  49. It must be pointed out that the law of the seat or
    place where the arbitration is held, is normally the law
    to govern that arbitration. The territorial link between
    the place of arbitration and the law governing that
    arbitration is well established in the international
    instruments, namely, the New York Convention of
    1958 and the UNCITRAL Model Law of 1985. It is true
    that the terms “seat” and “place” are often used
    interchangeably. In Redfern and Hunter on
    International Arbitration [ Blackaby, Partasides,
    Redfern and Hunter (Eds.), Redfern and Hunter on
    International Arbitration (5th Edn., Oxford University
    Press, Oxford/New York 2009).] (Para 3.51), the seat
    theory is defined thus: “The concept that an
    arbitration is governed by the law of the place in
    38
    which it is held, which is the ‘seat’ (or ‘forum’ or locus
    arbitri) of the arbitration, is well established in both
    the theory and practice of international arbitration. In
    fact, the Geneva Protocol, 1923 states:
    “2. The arbitral procedure, including the constitution
    of the Arbitral Tribunal, shall be governed by the will
    of the parties and by the law of the country in whose
    territory the arbitration takes place.”
    The New York Convention maintains the reference to
    “the law of the country where the arbitration took
    place” [Article V(1)(d)] and, synonymously to “the law
    of the country where the award is made” [Articles V(1)
    (a) and (e)]. The aforesaid observations clearly show
    that the New York Convention continues the clear
    territorial link between the place of arbitration and the
    law governing that arbitration. The author further
    points out that this territorial link is again maintained
    in the Model Law which provides in Article 1(2) that:
    “1. (2) the provision of this Law, except Articles 8, 9,
    35 and 36, apply only if the place of arbitration is in
    the territory of the State.”
    Just as the Arbitration Act, 1996 maintains the
    territorial link between the place of arbitration and its
    law of arbitration, the law in Switzerland and England
    also maintain a clear link between the seat of
    arbitration and the lex arbitri. The Swiss Law states:
    “176(I). (1) The provision of this chapter shall apply to
    any arbitration if the seat of the Arbitral Tribunal is in
    Switzerland and if, at the time when the arbitration
    agreement was concluded, at least one of the parties
    had neither its domicile nor its habitual residence in
    Switzerland.” [See the Swiss Private International
    Law Act, 1987, Ch. 12, Article 176 (I)(1).]
    39
    These observations were subsequently followed
    in Union of India v. McDonnell Douglas
    Corpn. [(1993) 2 Lloyd’s Rep 48]
    xxx xxx xxx
  50. Learned Counsel for the Appellants have submitted that Section 2(1)(e), Section 20 and Section 28
    read with Section 45 and Section 48(1)(e) make it
    clear that Part I is not limited only to arbitrations
    which take place in India. These provisions indicate
    that Arbitration Act, 1996 is subject matter centric and
    not exclusively seat centric. Therefore, “seat” is not
    the “centre of gravity” so far as the Arbitration Act,
    1996 is concerned. We are of the considered opinion
    that the aforesaid provisions have to be interpreted by
    keeping the principle of territoriality at the forefront.
    We have earlier observed that Section 2(2) does not
    make Part I applicable to arbitrations seated or held
    outside India. In view of the expression used in Section 2(2), the maxim expressum facit cessare tacitum,
    would not permit by interpretation to hold that Part I
    would also apply to arbitrations held outside the territory of India. The expression “this Part shall apply
    where the place of arbitration is in India” necessarily
    excludes application of Part I to arbitration seated or
    held outside India. It appears to us that neither of the
    provisions relied upon by the Learned Counsel for the
    Appellants would make any section of Part I applicable to arbitration seated outside India. It will be apposite now to consider each of the aforesaid provisions
    in turn.
  51. Section 2(1)(e) of the Arbitration Act, 1996 reads
    as under:
    “2. Definitions
    (1) In this Part, unless the context otherwise requires
    40
    (e) “Court” means 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.”
    We are of the opinion, the term “subject matter of the
    arbitration” cannot be confused with “subject matter
    of the suit”. The term “subject matter” in Section 2(1)
    (e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers
    to a court which would essentially be a court of the
    seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping
    in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the Learned Counsel for the
    Appellants would, in fact, render Section 20 nugatory.
    In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have
    jurisdiction where the cause of action is located and
    the courts where the arbitration takes place. This was
    necessary as on many occasions the agreement may
    provide for a seat of arbitration at a place which
    would be neutral to both the parties. Therefore, the
    courts where the arbitration takes place would be required to exercise supervisory control over the arbitral
    process. For example, if the arbitration is held in
    Delhi, where neither of the parties are from Delhi,
    (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from
    Kolkata) and the tribunal sitting in Delhi passes an interim order Under Section 17 of the Arbitration Act,
    1996, the appeal against such an interim order under
    Section 37 must lie to the Courts of Delhi being the
    41
    Courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to
    take place in Delhi. In such circumstances, both the
    Courts would have jurisdiction, i.e., the Court within
    whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which
    the dispute resolution, i.e., arbitration is located.
    xxx xxx xxx
  52. We now come to Section 20, which is as under:
  53. 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, good or other property.”
    A plain reading of Section 20 leaves no room for
    doubt that where the place of arbitration is in India,
    the parties are free to agree to any “place” or “seat”
    within India, be it Delhi, Mumbai etc. In the absence
    of the parties’ agreement thereto, Section 20(2) authorizes the tribunal to determine the place/seat of
    such arbitration. Section 20(3) enables the tribunal to
    meet at any place for conducting hearings at a place
    of convenience in matters such as consultations
    42
    among its members for hearing witnesses, experts or
    the parties.
  54. The fixation of the most convenient “venue” is
    taken care of by Section 20(3). Section 20, has to be
    read in the context of Section 2(2), which places a
    threshold limitation on the applicability of Part I,
    where the place of arbitration is in India. Therefore,
    Section 20 would also not support the submission of
    the extra-territorial applicability of Part I, as canvassed by the Learned Counsel for the Appellants, so
    far as purely domestic arbitration is concerned.”
    (emphasis supplied)
  55. The Court then went on to refer to several English judgments and
    specifically italicised several parts of the judgment in Roger
    Shashoua & Ors. v. Mukesh Sharma [2009] EWHC 957 (Comm) as
    follows:
    “110. Examining the fact situation in the case, the
    Court observed as follows:
    The basis for the court’s grant of an anti-suit injunction of the kind sought depended upon the seat of the
    arbitration. An agreement as to the seat of an arbitration brought in the law of that country as the curial
    law and was analogous to an exclusive jurisdiction
    clause. Not only was there agreement to the curial
    law of the seat, but also to the Courts of the seat having supervisory jurisdiction over the arbitration, so
    that, by agreeing to the seat, the parties agreed that
    any challenge to an interim or final award was to be
    made only in the courts of the place designated as
    the seat of the arbitration.
    Although, ‘venue’ was not synonymous with ‘seat’, in
    an arbitration clause which provided for arbitration to
    be conducted in accordance with the Rules of the ICC
    in Paris (a supranational body of rules), a provision
    43
    that ‘the venue of arbitration shall be London, United
    Kingdom’ did amount to the designation of a juridical
    seat…”
    In Paragraph 54, it is further observed as follows:
    There was a little debate about the possibility of the
    issues relating to the alleged submission by the
    claimants to the jurisdiction of the High Court of Delhi
    being heard by that court, because it was best fitted
    to determine such issues under Indian Law. Whilst I
    found this idea attractive initially, we are persuaded
    that it would be wrong in principle to allow this and
    that it would create undue practical problems in any
    event. On the basis of what I have already decided,
    England is the seat of the arbitration and since this
    carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court
    should not decide matters which are for this Court to
    decide in the context of an anti-suit injunction.
    In making the aforesaid observations, the Court relied
    on judgments of the Court of Appeal in C v. D (2007)
    EWCA Civ 1282 (CA).”
    (emphasis in original)
  56. Finally, the conclusion drawn in paragraph 116 was as follows:
    “116. The legal position that emerges from a conspectus of all the decisions, seems to be, that the
    choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that
    country relating to the conduct and supervision of arbitrations will apply to the proceedings
  57. Also, in paragraph 123, the Court held as follows:
    “123. Thus, it is clear that the regulation of conduct of
    arbitration and challenge to an award would have to
    be done by the courts of the country in which the
    arbitration is being conducted. Such a court is then
    the supervisory court possessed of the power to
    44
    annul the award. This is in keeping with the scheme
    of the international instruments, such as the Geneva
    Convention and the New York Convention as well as
    the UNCITRAL Model Law. It also recognises the
    territorial principle which gives effect to the sovereign
    right of a country to regulate, through its national
    courts, an adjudicatory duty being performed in its
    own country. By way of a comparative example, we
    may reiterate the observations made by the Court of
    Appeal, England in C v. D [2008 Bus LR 843 : 2007
    EWCA Civ 1282 (CA)] wherein it is observed that:
    “It follows from this that a choice of seat for the
    arbitration must be a choice of forum for remedies
    seeking to attack the award.”
    In the aforesaid case, the Court of Appeal had
    approved the observations made in A v. B [(2007) 1
    All ER (Comm) 591 : (2007) 1 Lloyd’s Rep 237]
    wherein it is observed that:
    “… an agreement as to the seat of an arbitration is
    analogous to an exclusive jurisdiction clause. Any
    claim for a remedy … as to the validity of an existing
    interim or final award is agreed to be made only in
    the courts of the place designated as the seat of
    arbitration.”
  58. The Court then concluded in paragraph 194 as follows:
  59. In view of the above discussion, we are of the
    considered opinion that the Arbitration Act, 1996 has
    accepted the territoriality principle which has been
    adopted in the UNCITRAL Model Law. Section 2(2)
    makes a declaration that Part I of the Arbitration Act,
    1996 shall apply to all arbitrations which take place
    within India. We are of the considered opinion that
    Part I of the Arbitration Act, 1996 would have no application to international commercial arbitration held outside India. Therefore, such awards would only be
    45
    subject to the jurisdiction of the Indian courts when
    the same are sought to be enforced in India in accordance with the provisions contained in Part II of the
    Arbitration Act, 1996. In our opinion, the provisions
    contained in the Arbitration Act, 1996 make it crystal
    clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act,
    1996.
  60. A reading of paragraphs 75, 76, 96, 110, 116, 123 and 194 of BALCO
    (supra) would show that where parties have selected the seat of arbitration in their agreement, such selection would then amount to an exclusive jurisdiction 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 paragraph 96 buttresses this proposition, and is
    supported by the previous and subsequent paragraphs pointed out
    hereinabove. The BALCO judgment (supra), 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 arbitration1
    .
    1 Section 3 of the English Arbitration Act, 1996 defines “seat” as follows:
    46
  61. However, this proposition is contradicted when paragraph 96 speaks
    of the concurrent jurisdiction of Courts within whose jurisdiction the
    cause of action arises wholly or in part, and Courts within the jurisdiction of which the dispute resolution i.e. arbitration, is located.
  62. Paragraph 96 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
    “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.
    47
    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 to state that this
    would be irrespective of the fact that the obligations 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.
  63. This Court has held that judgments of Courts are not to be construed
    as statutes, neither are they to be read as Euclid’s theorems. All observations made must be read in the context in which they appear.
    This was felicitously put in Amar Nath Om Prakash v. State of Punjab (1985) 1 SCC 345, where this Court stated:
    “10. There is one other significant sentence in Sreenivasa General Traders v. State of A.P [(1983) 4 SCC
    353 : AIR 1983 SC 1246] with which we must express
    our agreement, It was said: (SCC p. 377, para 27)
    48
    “With utmost respect, these observations of the
    learned Judge are not to be read as Euclid’s theorems, nor as provisions of a statute. These observations must be read in the context in which they appear.”
    We consider it proper to say, as we have already said
    in other cases, that judgments of courts are not to be
    construed as statutes. To interpret words, phrases
    and provisions of a statute, it may become necessary
    for Judges to embark into lengthy discussions but the
    discussion is meant to explain and not to define.
    Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words
    are not to be interpreted as statutes.
    In London Graving Dock Co. Ltd. v. Horton [1951 AC
    737, 761 : (1951)-2 All ER 1, 14 (HL)] Lord MacDermott observed:
    “The matter cannot, of course, be settled merely by
    treating the ipsissima verba of Willes, J., as though
    they were part of an Act of Parliament and applying
    the rules of interpretation appropriate thereto. This is
    not to detract from the great weight to be given to the
    language actually used by that most distinguished
    Judge….
    In Home Office v. Dorset Yacht Co. Ltd. [(1970) 2 All
    ER 294 : (1970) 2 WLR 1140 : 1970 AC 1004 (HL)]
    Lord Reid said:
    “Lord Atkin’s speech [Donoghue v. Stevension, 1932
    All ER Rep 1, 11 : 1932 AC 562, 580 : 101 LJPC
    119 : 147 LT 281 (HL)] … is not to be treated as if it
    was a statutory definition. It will require qualification in
    new circumstances.”
    Megarry, J. in (1971) 1 WLR 1062 observed:
    “One must not, of course, construe even a reserved
    judgment of even Russell, L.J. as if it were an Act of
    Parliament.”
    And, in Herrington v. British Railways Board [(1972) 2
    WLR 537: (1972) 1 All Er 749 : 1972 AC 877 (HL)]
    Lord Morris said: “There is always peril in treating the
    words of a speech or a judgment as though they were
    49
    words in a legislative enactment, and it is to be remembered that judicial utterances are made in the
    setting of the facts of a particular case.”
    (emphasis supplied)
  64. More recently, this Court in Union of India v. Amrit Lal Manchanda
    (2004) 3 SCC 75 held as follows:
    “15. Cases involving challenges to orders of detention
    before and after execution of the order stand on different footings. Courts should not place reliance on
    decisions without discussing as to how the factual situation fits in with the fact situation of the decision on
    which reliance is placed. Observations of courts are
    neither to be read as Euclid’s theorems nor as provisions of the statute and that too taken out of their
    context. These observations must be read in the context in which they appear to have been stated. Judgments of courts are not to be construed as statutes.
    To interpret words, phrases and provisions of a
    statute, it may become necessary for judges to embark into lengthy discussions but the discussion is
    meant to explain and not to define. Judges interpret
    statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.”
    (emphasis supplied)
  65. In any case, a judgment must be read as a whole, so that conflicting
    parts may be harmonised to reveal the true ratio of the judgment.
    However, if this is not possible, and it is found that the internal conflicts within the judgment cannot be resolved, then the first endeavour
    that must be made is to see whether a ratio decidendi can be culled
    out without the conflicting portion. If not, then, as held by Lord Den50
    ning in Harper and Ors. v. National Coal Board (1974) 2 All ER 441,
    the binding nature of the precedent on the point on which there is a
    conflict in a judgment, comes under a cloud.2
  66. If paragraphs 75, 76, 96, 110, 116, 123 and 194 of BALCO (supra)
    are to be read together, what becomes clear is that Section 2(1)(e)
    2
    In Harper (supra), the decision in Central Asbestos Co. Ltd. vs. Dodd (1972) 2
    All ER 1135, a House of Lords judgment, had to be applied. It was found that two
    learned Law Lords decided the question of law in favour of Dodd, whereas two
    learned Law Lords decided the question of law against Dodd, stating that his
    claim was barred. As Lord Denning stated, the fifth Law Lord, Lord Pearson, was
    the odd man out, in that he agreed with the two learned Law Lords that the law
    did not support Dodd’s case, but agreed with the minority judges that Dodd’s
    claim was not barred. This being the case, Lord Denning spoke of the
    precedential value of Dodd’s case as follows:
    “How then do we stand on the law? We have listened to a most helpful
    discussion by Mr. McCullough on the doctrine of precedent. One thing is clear.
    We can only accept a line of reasoning which supports the actual decision of the
    House of Lords. By no possibility can we accept any reasoning which would
    show the decision itself to be wrong. The second proposition is that if we can
    discover the reasoning on which the majority based their decision, then we
    should accept that as binding upon us. The third proposition is that, if we can
    discover the reasoning on which the minority base their decision, we should
    reject it. It must be wrong because it led them to the wrong result. The fourth
    proposition is that, if we cannot discover the reasoning on which the majority
    based their decision, we are not bound by it. We are free to adopt any reasoning
    which appears to us to be correct, so long as it supports the actual decision of
    the House.
    In support of those propositions, I would refer to the speech of Lord
    Dunedin in Great Western Railway Co. v. Owners of S.S. Mostyn [1928] A.C. 57,
    73–74, and of Lord MacDermott in Walsh v. Curry [1955] N.I. 112, 124–125, and
    of Viscount Simonds in Midland Silicones Ltd. v. Scruttons Ltd. [1962] A.C. 446,
    468–469. Applying the propositions to Smith v. Central Asbestos Co. Ltd.
    [Dodd’s case] [1973] A.C. 518, the position stands thus: (1) the actual decision of
    the House in favour of Dodd must be accepted as correct, We cannot accept any
    line of reasoning which would show it to be wrong. We cannot therefore accept
    51
    has to be construed keeping in view Section 20 of the Arbitration Act,
    1996, which gives recognition to party autonomy – the Arbitration Act,
    1996 having accepted the territoriality principle in Section 2(2), following the UNCITRAL Model Law. The narrow construction of Section
    2(1)(e) was expressly rejected by the Five Judge bench in BALCO
    (supra). This being so, what has then to be seen is what is the effect
    Section 20 would have on Section 2(1)(e) of the Arbitration Act, 1996.
  67. It was not until this Court’s judgment in Indus Mobile Distribution
    Private Limited (supra) that the provisions of Section 20 were properly analysed in the light of the 246th Report of the Law Commission
    of India titled, ‘Amendments to the Arbitration and Conciliation Act,
    1996’ (August, 2014) (hereinafter referred to as the “Law Commission
    Report, 2014”), under which Section 20(1) and (2) would refer to the
    the reasoning of a minority of two — Lord Simon of Glaisdale and Lord Salmon
    — on the law. It must be wrong because it led them to the wrong result. (2) We
    ought to accept the reasoning of the three in the majority if we can discover it.
    But it is not discoverable. The three were divided. Lord Reid and Lord Morris of
    Borth-y-Gest took one view of the law. Lord Pearson took another. We cannot
    say that Lord Reid and Lard Morris of Borth-y-Gest were correct: because we
    know that their reasoning on the law was in conflict with the reasoning of the
    other three. We cannot say that Lord Pearson was correct: because we know
    that the reasoning which he accepted on the law led the other two (Lord Simon
    of Glaisdale and Lord Salmon) to a wrong conclusion. So we cannot say that any
    of the three in the majority was correct. (3) The result is that there is no
    discernible ratio among the majority of the House of Lords. In these
    circumstances I think we are at liberty to adopt the reasoning which appears to
    us to be correct.”
    52
    “seat” of the arbitration, and Section 20(3) would refer only to the
    “venue” of the arbitration. Given the fact that when parties, either by
    agreement or, in default of there being an agreement, where the arbitral tribunal determines a particular place as the seat of the arbitration
    under Section 31(4) of the Arbitration Act, 1996, it becomes clear that
    the parties having chosen the seat, or the arbitral tribunal having determined the seat, have also chosen the Courts at the seat for the
    purpose of interim orders and challenges to the award.
  68. This Court in Indus Mobile Distribution Private Limited (supra), after referring to Sections 2(1)(e) and 20 of the Arbitration Act, 1996,
    and various judgments distinguishing between the “seat” of an arbitral
    proceeding and “venue” of such proceeding, referred to the Law Commission Report, 2014 and the recommendations made therein as follows:
    “17. In amendments to be made to the Act, the Law
    Commission recommended the following:
    “Amendment of Section 20
    In Section 20, delete the word “Place” and add the
    words “Seat and Venue” before the words “of arbitration”.
    (i) In Sub-section (1), after the words “agree on the”
    delete the word “place” and add words “seat and
    venue”
    53
    (ii) In Sub-section (3), after the words “meet at any”
    delete the word “place” and add word “venue”.
    [NOTE: The departure from the existing phrase
    “place” of arbitration is proposed to make the
    wording of the Act consistent with the international
    usage of the concept of a “seat” of arbitration, to
    denote the legal home of the arbitration. The
    amendment further legislatively distinguishes between the “[legal] seat” from a “[mere] venue” of
    arbitration.]
    Amendment of Section 31
  69. In Section 31
    (i) In Sub-section (4), after the words “its date and
    the” delete the word “place” and add the word
    “seat”.”
  70. The amended Act, does not, however, contain the
    aforesaid amendments, presumably because the
    BALCO judgment in no uncertain terms has referred
    to “place” as “juridical seat” for the purpose of Section
    2(2) of the Act. It further made it clear that Section
    20(1) and 20 (2) where the word “place” is used,
    refers to “juridical seat”, whereas in Section 20 (3),
    the word “place” is equivalent to “venue”. This being
    the settled law, it was found unnecessary to expressly
    incorporate what the Constitution Bench of the
    Supreme Court has already done by way of construction of the Act.
  71. A conspectus of all the aforesaid provisions
    shows that the moment the seat is designated, it is
    akin to an exclusive jurisdiction clause. On the facts
    of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear
    that jurisdiction exclusively vests in the Mumbai
    courts. Under the Law of Arbitration, unlike the Code
    of Civil Procedure which applies to suits filed in
    54
    courts, a reference to “seat” is a concept by which a
    neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the
    classical sense have jurisdiction – that is, no part of
    the cause of action may have arisen at the neutral
    venue and neither would any of the provisions of Section 16 to 21 of the Code of Civil Procedure be attracted. In arbitration law however, as has been held
    above, the moment “seat” is determined, the fact that
    the seat is at Mumbai would vest Mumbai courts with
    exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties.
  72. It is well settled that where more than one court
    has jurisdiction, it is open for parties to exclude all
    other courts. For an exhaustive analysis of the case
    law, see Swastik Gases Private Limited v. Indian Oil
    Corporation Limited (2013) 9 SCC 32. This was followed in a recent judgment in B.E. Simoese Von
    Staraburg Niedenthal and Anr. v. Chhattisgarh Investment Limited: (2015) 12 SCC 225. Having regard to
    the above, it is clear that Mumbai courts alone have
    jurisdiction to the exclusion of all other courts in the
    country, as the juridical seat of arbitration is at Mumbai. This being the case, the impugned judgment is
    set aside. The injunction confirmed by the impugned
    judgment will continue for a period of four weeks from
    the date of pronouncement of this judgment, so that
    the Respondents may take necessary steps Under
    Section 9 in the Mumbai Court. Appeals are disposed
    of accordingly.”
    This judgment has recently been followed in Brahmani River Pellets
    Ltd. v. Kamachi Industries Ltd. 2019 SCC Online SC 929 at paragraph 15.
    55
  73. In fact, the Law Commission Report, 2014 also recommended an
    amendment in the definition of “Court” under Section 2(1)(e) of the Arbitration Act, 1996, so that in the case of international commercial arbitrations held in India, the High Court alone should be the “Court” for
    the purposes of the Arbitration Act, 1996, even where such a High
    Court does not exercise ordinary original jurisdiction. The recommendation made by the Law Commission, which was followed, leading to
    an amendment of the Arbitration Act, 1996, is as follows:
    “26. It is recommended that in case of international
    commercial arbitrations, where there is a significant
    foreign element to the transaction and at least one of
    the parties is foreign, the relevant “Court” which is
    competent to entertain proceedings arising out of the
    arbitration agreement, should be the High Court, even
    where such a High Court does not exercise ordinary
    civil jurisdiction. It is expected that this would ensure
    that international commercial arbitrations, involving
    foreign parties, will be heard expeditiously and by
    commercial oriented judges at the High Court level…”
    Amendment of Section 2
  74. In Section 2 of the Arbitration and Conciliation Act,
    1996 (hereinafter referred to as the principal Act),-
    xxx xxx xxx
    (ii) In sub-section (1), clause (e), after the words
    “Court means-” add sub-section (i) beginning with
    the words “in the case of an arbitration other than
    international commercial arbitration,” before the
    56
    words “the principal Civil Court of original jurisdiction”
    In sub-section (1), clause (e) replace sub-clause
    (ii) by following:
    “(ii) in the case of an international commercial arbitration, the High Court exercising jurisdiction over
    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 subjectmatter of the arbitration if the same had been the
    subject-matter of a suit, but does not include any
    Court of a grade inferior to such High Court, or in
    cases involving grant of interim measures in respect of arbitrations outside India, the High Court
    exercising jurisdiction over the court having jurisdiction to grant such measures as per the laws of
    India, and includes the High Court in exercise of its
    ordinary original civil jurisdiction.”
    [NOTE: This is to solve the problem of conflict of
    jurisdiction that would arise in cases where interim
    measures are sought in India in cases of arbitrations seated outside India. This also ensures that
    in International Commercial Arbitrations, jurisdiction is exercised by the High Court, even if such
    High Court does not exercise ordinary original civil
    jurisdiction.]”
  75. The aforesaid amendment carried out in the definition of “Court” is
    also a step showing the right direction, namely, that in international
    commercial arbitrations held in India, the High Court alone is to exercise jurisdiction over such proceedings, even where no part of the
    cause of action may have arisen within the jurisdiction of such High
    Court, such High Court not having ordinary original jurisdiction. In
    57
    such cases, the “place” where the award is delivered alone is looked
    at, and the High Court given jurisdiction to supervise the arbitration
    proceedings, on the footing of its jurisdiction to hear appeals from decrees of courts subordinate to it, which is only on the basis of territorial jurisdiction which in turn relates to the “place” where the award is
    made. In the light of this important change in the law, Section 2(1)(e)
    (i) of the Arbitration Act, 1996 must also be construed in the manner
    indicated by this judgment.
  76. Take the consequence of the opposite conclusion, in the light of the
    facts of a given example, as follows. New Delhi is specifically designated to be the seat of the arbitration in the arbitration clause between the parties. Part of the cause of action, however, arises in several places, including where the contract is partially to be performed,
    let us say, in a remote part of Uttarakhand. If concurrent jurisdiction
    were to be the order of the day, despite the seat having been located
    and specifically chosen by the parties, party autonomy would suffer,
    which BALCO (supra) specifically states cannot be the case. Thus, if
    an application is made to a District Court in a remote corner of the Uttarakhand hills, which then becomes the Court for the purposes of
    Section 42 of the Arbitration Act, 1996 where even Section 34 applica58
    tions have then to be made, the result would be contrary to the stated
    intention of the parties – as even though the parties have contemplated that a neutral place be chosen as the seat so that the Courts of
    that place alone would have jurisdiction, yet, any one of five other
    Courts in which a part of the cause of action arises, including Courts
    in remote corners of the country, would also be clothed with jurisdiction. This obviously cannot be the case. If, therefore, the conflicting
    portion of the judgment of BALCO (supra) in paragraph 96 is kept
    aside for a moment, the very fact that parties have chosen a place to
    be the seat would necessarily carry with it the decision of both parties
    that the Courts at the seat would exclusively have jurisdiction over the
    entire arbitral process.
  77. In fact, subsequent Division Benches of this Court have understood
    the law to be that once the seat of arbitration is chosen, it amounts to
    an exclusive jurisdiction clause, insofar as the Courts at that seat are
    concerned. In Enercon (India) Ltd. and Ors. v. Enercon GmbH and
    Anr. (2014) 5 SCC 1, this Court approved the dictum in Roger
    Shashoua (supra) as follows:
    “126. Examining the fact situation in the case, the
    Court in Shashoua case [Shashoua v. Sharma,
    (2009) 2 Lloyd’s Law Rep 376] observed as
    follows:
    59
    “The basis for the court’s grant of an anti-suit
    injunction of the kind sought depended upon
    the seat of the arbitration. An agreement as to the
    seat of an arbitration brought in the law of that
    country as the curial law and was analogous to an
    exclusive jurisdiction clause. Not only was there
    agreement to the curial law of the seat, but also to
    the courts of the seat having supervisory
    jurisdiction over the arbitration, so that, by
    agreeing to the seat, the parties agreed that any
    challenge to an interim or final award was to be
    made only in the courts of the place designated as
    the seat of the arbitration.
    Although, ‘venue’ was not synonymous with ‘seat’,
    in an arbitration clause which provided for
    arbitration to be conducted in accordance with the
    Rules of the ICC in Paris (a supranational body of
    rules), a provision that ‘the venue of arbitration
    shall be London, United Kingdom’ did amount to
    the designation of a juridical seat….”
    In para 54, it is further observed as follows:
    “There was a little debate about the possibility of
    the issues relating to the alleged submission by
    the claimants to the jurisdiction of the High Court
    of Delhi being heard by that Court, because it was
    best fitted to determine such issues under the
    Indian law. Whilst I found this idea attractive
    initially, we are persuaded that it would be wrong
    in principle to allow this and that it would create
    undue practical problems in any event. On the
    basis of what I have already decided, England is
    the seat of the arbitration and since this carries
    with it something akin to an exclusive jurisdiction
    clause, as a matter of principle the foreign court
    should not decide matters which are for this Court
    to decide in the context of an anti-suit injunction.”
  78. The Court then concluded:
    “138. Once the seat of arbitration has been fixed in
    India, it would be in the nature of exclusive jurisdic60
    tion to exercise the supervisory powers over the arbitration…”
  79. In Reliance Industries Ltd. (supra), this Court held:
    “45. In our opinion, it is too late in the day to contend
    that the seat of arbitration is not analogous to an exclusive jurisdiction clause. This view of ours will find
    support from numerous judgments of this Court. Once
    the parties had consciously agreed that the juridical
    seat of the arbitration would be London and that the
    arbitration agreement will be governed by the laws of
    England, it was no longer open to them to contend
    that the provisions of Part I of the Arbitration Act
    would also be applicable to the arbitration agreement.
    This Court in Videocon Industries Ltd. [(2011) 6 SCC
    161 : (2011) 3 SCC (Civ) 257] has clearly held as follows: (SCC p. 178, para 33)
    “33. In the present case also, the parties had agreed
    that notwithstanding Article 33.1, the arbitration
    agreement contained in Article 34 shall be governed
    by laws of England. This necessarily implies that the
    parties had agreed to exclude the provisions of Part I
    of the Act. As a corollary to the above conclusion, we
    hold that the Delhi High Court did not have the jurisdiction to entertain the petition filed by the respondents under Section 9 of the Act and the mere fact
    that the appellant had earlier filed similar petitions
    was not sufficient to clothe that High Court with the jurisdiction to entertain the petition filed by the respondents.”
    xxx xxx xxx
  80. The effect of choice of seat of arbitration was
    considered by the Court of Appeal in C v. D [2008
    Bus LR 843 : (2008) 1 Lloyd’s Law 239 : 2007 EWCA
    Civ 1282] . This judgment has been specifically
    approved by this Court in Balco [BALCO v. Kaiser
    Aluminium Technical Services Inc., (2012) 9 SCC 552
    : (2012) 4 SCC (Civ) 810] and reiterated
    61
    in Enercon [Enercon (India) Ltd. v. Enercon GmbH,
    (2014) 5 SCC 1 : (2014) 3 SCC (Civ) 59 : (2014) 1
    ALR 257] . In C v. D [2008 Bus LR 843 : (2008) 1
    Lloyd’s Law 239 : 2007 EWCA Civ 1282] , the Court
    of Appeal has observed: (Bus LR p. 851, para 16)
    “Primary conclusion
  81. I shall deal with Mr Hirst’s arguments in due
    course but, in my judgment, they fail to grapple with
    the central point at issue which is whether or not, by
    choosing London as the seat of the arbitration, the
    parties must be taken to have agreed that
    proceedings on the award should be only those
    permitted by English law. In my view they must be
    taken to have so agreed for the reasons given by the
    Judge. The whole purpose of the balance achieved
    by the Bermuda form (English arbitration but applying
    New York law to issues arising under the policy) is
    that judicial remedies in respect of the award should
    be those permitted by English law and only those so
    permitted. Mr Hirst could not say (and did not say)
    that English judicial remedies for lack of jurisdiction
    on procedural irregularities under Sections 67 and 68
    of the 1996 Act were not permitted; he was reduced
    to saying that New York judicial remedies
    were also permitted. That, however, would be a
    recipe for litigation and (what is worse) confusion
    which cannot have been intended by the parties. No
    doubt New York law has its own judicial remedies for
    want of jurisdiction and serious irregularity but it could
    scarcely be supposed that a party aggrieved by one
    part of an award could proceed in one jurisdiction and
    a party aggrieved by another part of an award could
    proceed in another jurisdiction. Similarly, in the case
    of a single complaint about an award, it could not be
    supposed that the aggrieved party could complain in
    one jurisdiction and the satisfied party be entitled to
    ask the other jurisdiction to declare its satisfaction
    with the award. There would be a serious risk of
    parties rushing to get the first judgment or of
    62
    conflicting decisions which the parties cannot have
    contemplated.”
  82. The aforesaid observations in C v. D [2008 Bus
    LR 843 : (2008) 1 Lloyd’s Law 239 : 2007 EWCA Civ
    1282] were subsequently followed by the High Court
    of Justice, Queen’s Bench Division, Commercial
    Court (England) in Sulamerica Cia Nacional de
    Seguros SA v. Enesa Engelharia SA —
    Enesa [(2013) 1 WLR 102 : 2012 EWCA Civ 638 :
    2012 WL 14764] . In laying down the same
    proposition, the High Court noticed that the issue in
    that case depended upon the weight to be given to
    the provision in Condition 12 of the insurance policy
    that “the seat of the arbitration shall be London,
    England”. It was observed that this necessarily
    carried with it the English Court’s supervisory
    jurisdiction over the arbitration process. It was
    observed that:
    “this follows from the express terms of the Arbitration
    Act, 1996 and, in particular, the provisions of Section
    2 which provide that Part I of the Arbitration Act, 1996
    applies where the seat of the arbitration is in England
    and Wales or Northern Ireland. This immediately
    establishes a strong connection between the
    arbitration agreement itself and the law of England. It
    is for this reason that recent authorities have laid
    stress upon the locations of the seat of the arbitration
    as an important factor in determining the proper law
    of the arbitration agreement.””
  83. In Indus Mobile Distribution Private Limited and Ors. (supra), after
    clearing the air on the meaning of Section 20 of the Arbitration Act,
    1996, the Court in paragraph 19 (which has already been set out
    hereinabove) made it clear that the moment a seat is designated by
    agreement between the parties, it is akin to an exclusive jurisdiction
    63
    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.
  84. Despite the aforesaid judgments of this Court, discordant notes have
    been struck by some of the High Courts. In Antrix Corporation Ltd.
    (supra), a Division Bench of the Delhi High Court, after setting out
    paragraph 96 of BALCO (supra), then followed the reasoning of
    judgements of the Bombay High Court, in stating that the ratio decidendi of the 5 Judge Bench in BALCO (supra) is that Courts would
    have concurrent jurisdiction, notwithstanding the designation of the
    seat of arbitration by agreement between the parties. The Delhi High
    Court stated:
    “52. Having held that the statement in paragraph 96
    of BALCO (supra) would apply to the present case as
    well, this court has to examine its legal consequence
    in light of the law declared in BALCO (supra). It is
    important to note that in the said paragraph (extracted
    above), the Supreme Court has noted that Section
    2(1)(e) of the Arbitration Act confers jurisdiction to two
    courts over the arbitral process – the courts having
    subject matter jurisdiction and the courts of the seat.
    This is evident both from the substantive holding of
    the paragraph as well as the example given by the
    Court. The Court notes that “the legislature has
    intentionally given jurisdiction to two courts i.e. the
    court which would have jurisdiction where the cause
    of action is located and the courts where the
    arbitration takes place.” This is further reinforced by
    64
    the example that the Court gave later in the same
    paragraph. In the example where the parties are from
    Mumbai and Kolkata and the obligations under the
    contract are to be performed at either Mumbai or
    Kolkata, and the parties have designated Delhi as the
    seat of the arbitration, in such a situation, both courts
    would have jurisdiction, i.e. within whose jurisdiction
    the subject matter of the suit is situated (either
    Mumbai or Kolkata) and the court within the
    jurisdiction of which the dispute resolution, i.e.,
    arbitration is located (which is Delhi). Moreover, the
    fact that the court interpreted the term “subject matter
    of the suit” in the paragraph, also gives credence to
    the interpretation that the court recognized that
    Section 2(1)(e) gives jurisdiction to both the cause of
    action courts, and the court at the seat of the
    arbitration. If the Court were of the opinion that only
    the courts at the seat would have jurisdiction under
    Section 2(1)(e) and no other court, then it would be
    wholly unnecessary for the court to interpret the
    term “subject matter of the suit”, since that court
    would anyway not have jurisdiction. In sum therefore,
    paragraph 96 of BALCO (supra) gives jurisdiction to
    both courts at the seat and the courts within whose
    jurisdiction the cause of action arises, if the dispute
    were the subject matter of a suit. This is what the
    Bombay High Court in Konkola Copper Mines (supra)
    also interpreted BALCO (supra) as holding:
    “The Supreme Court held that the provisions of
    Section 2(1)(e) are purely jurisdictional in nature and
    can have no relevance to the question whether any
    part of the cause of action has taken place outside
    India. The observations which have been extracted
    above, clearly establish that the Court where the
    arbitration takes place would be required to exercise
    supervisory control over the arbitral process. The
    Supreme Court has held that Parliament has given
    jurisdiction to two courts – the Court which would
    have jurisdiction where the cause of action is located
    65
    and the Court where the arbitration takes place. This
    is evident from the example which is contained in the
    above quoted extract from the decision.”
  85. Having so stated, the Division Bench then went on to give a restricted
    meaning to Indus Mobile Distribution Private Ltd. (supra) in paragraph 56 as follows:
    “56. In Datawind (supra), as the facts and the question framed by the Court in the second paragraph of
    its decision suggest, the Court was faced with a situation where the parties had designated both the
    seat and specified an exclusive forum selection
    clause. Therefore, its findings have to be interpreted
    in that light. In fact, were this Court to find otherwise,
    and interpret Datawind (supra) as holding that the
    designation of seat alone would amount to an exclusive forum selection clause in domestic arbitrations,
    then this would run contrary to the five-Judge decision in BALCO (supra), which as noticed above, gave
    jurisdiction under Section 2(1)(e) to two courts – one
    of which was the court of the seat, thereby clearly implying that the designation of a seat would not
    amount to an exclusive forum selection clause…”
  86. The Court then went on to state:
    “58. The court is of the opinion that in this case, only
    if the parties had designated the seat as New
    Delhi and also provided an exclusive forum selection
    clause in favour of the courts at New Delhi, could it be
    said that this court would have exclusive jurisdiction
    over all applications filed under the Arbitration Act. Indeed, it is open to parties to an arbitration to designate a particular forum as the exclusive forum to
    which all applications under the Act would lie. This
    would merely be an exercise of the right of the parties
    to choose one among multiple competent forums as
    the exclusive forum. This is a clearly permissible ex66
    ercise of the right of party autonomy as held by the
    Supreme Court in Swastik Gases v. Indian Oil Corporation Ltd., (2013) 9 SCC 32. Conversely, merely
    choosing a seat, cannot amount to exercising such a
    right of exclusive forum selection.
  87. This court is of opinion that, holding otherwise
    would in effect render Section 42 of the Arbitration Act
    ineffective and useless. Section 42 of the Act presupposes that there is more than one competent forum to
    hear applications under the Arbitration Act, and hence
    to ensure efficacy of dispute resolution, this provision
    enacts that the court, which is first seized of any such
    application under the Act, would be the only court
    possessing jurisdiction to hear all subsequent applications. If seat were equivalent to an exclusive forum
    selection clause in Part-I arbitrations, then every time
    parties would designate a seat, that would in effect
    mean that Section 42 would have no application.
    Thus, only those few situations where parties do not
    actually designate any seat (and thus no exclusive
    competence is conferred on one forum) would Section 42 have any role. In fact, often, when parties do
    not agree upon a seat in the arbitration agreement,
    for convenience, the arbitral tribunal designates a
    particular seat of the arbitration, or the agreement
    vests the discretion in the tribunal to decide the seat
    (and not just the “venue”). In all those circumstances
    then as well, the decision of the tribunal to agree
    upon a “seat” would amount to an exclusive jurisdiction clause and Section 42 would have no application.
    This would dilute Section 42 and would accordingly,
    be contrary to Parliamentary intent. Undoubtedly, in
    the present case, the parties have only chosen the
    seat as New Delhi and have not specified an exclusive forum selection clause. Therefore, it cannot be
    said that the courts in Delhi have exclusive competence to entertain applications under the Arbitration
    Act in the present dispute. The jurisdiction of the
    courts where the cause of action arises, which in this
    67
    case, is the Bangalore City Civil Court, cannot be said
    to have been excluded therefore. Accordingly, question (ii) is also answered in favour of Antrix…”
  88. The view of the Delhi High Court in Antrix Corporation Ltd. (supra),
    which followed judgments of the Bombay High Court, does not commend itself to us. First and foremost, it is incorrect to state that the example given by the Court in paragraph 96 of BALCO (supra) reinforces the concurrent jurisdiction aspect of the said paragraph. As
    has been pointed out by us, the conclusion that the Delhi as well as
    the Mumbai or Kolkata Courts would have jurisdiction in the example
    given in the said paragraph is wholly incorrect, given the sentence,
    “This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or
    at Kolkata, and only arbitration is to take place in Delhi”. The sentence which follows this is out of sync with this sentence, and the
    other paragraphs of the judgment. Thus, BALCO (supra) does not
    “unmistakably” hold that two Courts have concurrent jurisdiction, i.e.,
    the seat Court and the Court within whose jurisdiction the cause of
    action arises. What is missed by these High Court judgments is the
    subsequent paragraphs in BALCO (supra), which clearly and unmistakably state that the choosing of a “seat” amounts to the choosing of
    68
    the exclusive jurisdiction of the Courts at which the “seat” is located.
    What is also missed are the judgments of this Court in Enercon (India) Ltd. (supra) and Reliance Industries (supra).
  89. Equally, the ratio of the judgment in Indus Mobile Distribution Private Ltd. (supra), is contained in paragraphs 19 and 20. Two separate and distinct reasons are given in Indus Mobile Distribution Private Ltd. (supra) for arriving at the conclusion that the Courts at
    Mumbai alone would have jurisdiction. The first reason, which is independent of the second, is that as the seat of the arbitration was designated as Mumbai, it would carry with it the fact that Courts at Mumbai
    alone would have jurisdiction over the arbitration process. The second
    reason given was that in any case, following the Hakam Singh
    (supra) principle, where more than one Court can be said to have jurisdiction, the agreement itself designated the Mumbai Courts as having exclusive jurisdiction. It is thus wholly incorrect to state that Indus
    Mobile Distribution Private Ltd. (supra) has a limited ratio decidendi contained in paragraph 20 alone, and that paragraph 19, if read
    by itself, would run contrary to the 5 Judge Bench decision in BALCO
    (supra).
    69
  90. Equally incorrect is the finding in Antrix Corporation Ltd. (supra)
    that Section 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 socalled “seat” is only a convenient “venue”, then there may be several
    Courts where a part of the cause of action arises that may have juris70
    diction. 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 Bombay and Delhi High Courts in this
    regard is incorrect and is overruled.
    Tests for determination of “seat”
  91. The judgments of the English Courts have examined the concept of
    the “juridical seat” of the arbitral proceedings, and have laid down
    several important tests in order to determine whether the “seat” of the
    arbitral proceedings has, in fact, been indicated in the agreement between the parties. The judgment of Cooke, J., in Roger Shashoua
    (supra), states:
    “34. “London Arbitration is a well known phenomenon
    which is often chosen by foreign nationals with a different law, such as the law of New York, governing
    71
    the substantive rights of the parties. This is because
    of the legislative framework and supervisory powers
    of the courts here which many parties are keen to
    adopt. When therefore there is an express designation of the arbitration venue as London 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, to my mind, that London is the
    juridical seat and English law the curial law. In my
    judgment it is clear that either London has been designated by the parties to the arbitration agreement as
    the seat of the arbitration, or, having regard to the
    parties’ agreement and all the relevant circumstances, it is the seat to be determined in accordance
    with the final fall back provision of section 3 of the arbitration act.”
  92. 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.
  93. In Enercon GmbH v. Enercon (India) Ltd. [2012] EWHC 689, the
    arbitration clause between the parties read as follows:
    “18.3 All proceedings in such arbitration shall be conducted in English. The venue of the arbitration proceedings shall be London. The arbitrators may (but
    shall not be obliged to) award costs and reasonable
    expenses (including reasonable fees of counsel) to
    the Party(ies) that substantially prevail on merit. The
    72
    provisions of the Indian Arbitration and Conciliation
    Act, 1996 shall apply.”
  94. The Court began its discussion on the “seat” of the arbitration by
    referring to Roger Shashoua (supra), and then referring to ‘The Conflict of Laws’, Dicey, Morris & Collins, 14th Ed. as follows:
    “Moreover, as Cooke J. noted, this conclusion is consistent with the views expressed in The Conflict of
    Laws, Dicey, Morris & Collins, 14th Edition at ¶16–
    035 where the authors state that the seat “is in most
    cases sufficiently indicated by the country chosen as
    the place of the arbitration. For such a choice of place
    not to be given effect as a choice of seat, there will
    need to be clear evidence that the parties … agreed
    to choose another seat for the arbitration and that
    such a choice will be effective to endow the courts of
    that country with jurisdiction to supervise and support
    the arbitration” .
    Apart from the last sentence in clause 18.3 (ie “The
    provisions of the Indian Arbitration and Conciliation
    Act 1996 shall apply”), it seems to me that the conclusion that London is the “seat” of any arbitration thereunder is beyond any possible doubt. Thus the main
    issue is whether this last sentence is to be regarded
    as “significant contrary indicia” (using the language of
    Cooke J.) so as to place the “seat” of the arbitration in
    India. A similar issue was considered by Saville J in
    Union v of India v McDonnell [1993] 2 Lloyd’s Rep 48
    which, of course, pre-dates the English 1996 Act .
    The arbitration agreement in that case provided as
    follows: “In the event of a dispute arising out of or in
    connection with this agreement…the same shall be
    referred to an Arbitration Tribunal…The arbitration
    shall be conducted in accordance with the procedure
    provided in the Indian Arbitration Act of 1940 or any
    enactment or modification thereof. The arbitration
    73
    shall be conducted in the English language…The
    seat of the arbitration proceedings shall be London,
    United Kingdom.” Saville J expressed the view that
    the arguments on both sides were “finely balanced”
    but in effect concluded that the reference to the Indian Arbitration Act 1940 did not have the effect of
    changing the “seat” of the arbitration designated by
    the parties. Rather, the phrase referring to the 1940
    Act was to be reconciled with the rest of the clause by
    reading it as referring to the internal conduct of the arbitration as opposed to the external supervision of the
    arbitration by the Courts.”
    (emphasis supplied)
  95. The Court then held that although the word “venue” is not synonymous with “seat”, on the facts of that case, London – though described
    as the “venue” – was really the “seat” of the arbitration. This was for
    the reason that London was a neutral place in which neither party
    worked for gain, and in which no part of the cause of action arose. It
    was thus understood to be a neutral place in which the proceedings
    could be “anchored”. Secondly, the Court stressed on the expression
    “arbitration proceedings” in clause 18.3, which the Court held to be an
    expression which included not just one or more individual hearings,
    but the arbitral proceedings as a whole, culminating in the making of
    an award. The Court held:
    “Second, the language in clause 18.3 refers to the
    “arbitration proceedings”. That is an expression which
    includes not just one or more individual or particular
    hearings but the arbitration proceedings as a whole
    74
    including the making of an award. In other words the
    parties were anchoring the whole arbitration process
    in London right up to and including the making of an
    award. The place designated for the making of an
    award is a designation of seat. Moreover the language in clause 18.3 does not refer to the venue of all
    hearings “taking place” in London. Clause 18.3 instead provides that the venue of the arbitration proceedings “shall be” London. This again suggests the
    parties intended to anchor the arbitration proceedings
    to and in London rather than simply physically locating the arbitration hearings in London. Indeed in a
    case where evidence might need to be taken or perhaps more likely inspected in India it would make no
    commercial sense to construe the provision as mandating all hearings to take place in a physical place as
    opposed to anchoring the arbitral process to and in a
    designated place. All agreements including an arbitration agreement should be construed to accord with
    business common sense. In my view, there is no
    business common sense to construe the arbitration
    agreement (as contended for by EIL) in a manner
    which would simply deprive the arbitrators of an important discretion that they possess to hear evidence
    in a convenient geographical location.
    Third, Mr Joseph QC submitted that the last sentence
    of clause 18.3 can be reconciled with the choice of
    London as the seat. First, he submitted that it can be
    read as referring simply to Part II of the Indian 1996
    Act ie the enforcement provisions. Mr Edey QC’s response was that if that is all the last sentence meant,
    then it would be superfluous. However, I do not consider that any such superfluity carries much, if any,
    weight. Alternatively, Mr Joseph QC submitted that it
    can be read as referring only to those provisions of
    the Indian 1996 Act which were not inconsistent with
    the English 1996 Act.”
    (emphasis supplied)
    75
  96. The Court then held that the reference to the Indian Arbitration Act,
    1996 would not make London the “venue” and India the “seat” of the
    arbitral process for several reasons, including the fact that in earlier
    agreements between the same parties, the seat of arbitral proceedings was India, which was changed by this agreement to London – the
    explanation for this change being to render an award enforceable in
    India under the provisions of the Convention on the Recognition and
    Enforcement of Foreign Arbitral Awards (New York, 1958).
  97. In Shagang South-Asia (Hong Kong) Trading Co. Ltd. v. Daewoo
    Logistics [2015] EWHC 194, the Queen’s Bench Division (Commercial Courts) dealt with a ‘Fixture Note’ in which the Respondent
    agreed to charter a vessel to Shangang, China. The Fixture Note provided:
    “Clause 23. ARBITRATION TO BE HELD IN
    HONGKONG. ENGLISH LAW TO BE APPLIED.”
  98. After referring to Roger Shashoua (supra) and Enercon GmbH
    (supra), the Court held:
    “In my judgment the approach adopted in Shashoua v
    Sharma and in other cases is appropriate in this case
    also. An agreement that the arbitration is ‘to be held
    in Hong Kong’ would ordinarily carry with it an implied
    choice of Hong Kong as the seat of the arbitration and of the application of Hong Kong law as the
    curial law. Clear words or ‘significant contrary indicia’
    76
    are necessary to establish that some other seat or curial law has been agreed.”
  99. In Process and Indusrial Developments Ltd. v. Nigeria [2019]
    EWHC 2241 the Court was concerned with a dispute that arose out of
    a gas supply and processing agreement. The arbitration clause in that
    case read as follows:
    “The Parties agree that if any difference or dispute
    arises between them concerning the interpretation or
    performance of this Agreement and if they fail to settle such difference or dispute amicably, then a Party
    may serve on the other a notice of arbitration under
    the rules of the Nigerian Arbitration and Conciliation
    Act (Cap A18 LFN 2004) which, except as otherwise
    provided herein, shall apply to any dispute between
    such Parties under this Agreement. Within thirty (30)
    days of the notice of arbitration being issued by the
    initiating Party, the Parties shall each appoint an arbitrator and the arbitrators thus appointed by the Parties shall within fifteen (15) days from the date the
    last arbitrator was appointed, appoint a third arbitrator to complete the tribunal. …
    The arbitration award shall be final and binding upon
    the Parties. The award shall be delivered within two
    months after the appointment of the third arbitrator or
    within such extended period as may be agreed by the
    Parties. The costs of the arbitration shall be borne
    equally by the Parties. Each Party shall, however,
    bear its own lawyers’ fees. The venue of the arbitration shall be London, England or otherwise as agreed
    by the Parties. The arbitration proceedings and
    record shall be in the English language.”
    77
  100. The Court then held that the gas supply agreement provided for the
    seat of the arbitration to be in London, inter alia, for the following reasons:
    “ It is significant that clause 20 refers to the venue “of
    the arbitration” as being London. The arbitra-
    tion would continue up to and including the final
    award. Clause 20 does not refer to London as being
    the venue for some or all of the hearings. It does not
    use the language used in s. 16(2) ACA of where the
    tribunal may “meet” or may “hear witnesses, experts
    or the parties”. I consider that the provision repre-
    sented an anchoring of the entire arbitration to London rather than providing that the hearings should
    take place there.
    Clause 20 provides that the venue of the arbitration “shall be” London “or otherwise as agreed between the parties”. If the reference to venue was simply to where the hearings should take place, this
    would be an inconvenient provision and one which
    the parties are unlikely to have intended. It would
    mean that hearings had to take place in London, however inconvenient that might be for a particular hearing, unless the parties agreed otherwise. The question of where hearings should be conveniently held is,
    however, one which the arbitrators ordinarily have the
    power to decide, as indeed is envisaged in s. 16(2)
    ACA. That is likely to be a much more convenient arrangement. Clearly if the parties were in agreement
    as to where a particular hearing were to take place,
    that would be likely to be very influential on the arbitral tribunal. But if for whatever reason they were not
    in agreement, and it is not unknown for parties to arbitration to become at loggerheads about very many
    matters, then it is convenient for the arbitrators to be
    able to decide. If that arrangement was to be displaced it would, in my judgment, have to be spelled
    78
    out clearly. Accordingly, the reference to the “venue”
    as being London or otherwise as agreed between the
    parties, is better read as providing that the seat of
    the arbitration is to be England, unless the parties
    agree to change it. This would still allow the arbitrators to decide where particular hearings should take
    place, while providing for an anchor to England for
    supervisory purposes, unless changed.”
    (emphasis supplied)
  101. Coming to the judgments of our Courts, this Court in Dozco India (P)
    Ltd. v. Doosan Infracore Co. Ltd. (2011) 16 SCC 179, was concerned with the following arbitration clause contained in the agreement between the parties:
    “Article 22. Governing Laws — 22.1: This agreement
    shall be governed by and construed in accordance
    with the laws of The Republic of Korea.
    Article 23. Arbitration — 23.1: All disputes arising in
    connection with this agreement shall be finally settled
    by arbitration in Seoul, Korea (or such other place as
    the parties may agree in writing), pursuant to the
    rules of agreement then in force of the International
    Chamber of Commerce.”
  102. The Court then held:
    “18. In my opinion, there is essential difference between
    the clauses referred to in Citation Infowares
    Ltd. v. Equinox Corpn. [(2009) 7 SCC 220] as also
    in Indtel Technical Services (P) Ltd. v. W.S. Atkins Rail
    Ltd. [(2008) 10 SCC 308] on one hand and Article 23.1
    in the present case, on the other. Shri Gurukrishna
    Kumar rightly pointed out that the advantage of the
    bracketed portion cannot be taken, particularly, in view
    79
    of the decision in Naviera Amazonica Peruana
    S.A. v. Compania International de Seguros del
    Peru [(1988) 1 Lloyd’s Rep 116 (CA)] wherein it was
    held:
    “All contracts which provide for arbitration and contain a
    foreign element may involve three potentially relevant
    systems of law: (1) the law governing the substantive
    contract; (2) the law governing the agreement to
    arbitrate and the performance of that agreement; (3) the
    law governing the conduct of the arbitration. In the
    majority of the cases all three will be the same, but (1)
    will often be different from (2) and (3) and occasionally,
    but rarely, (2) may also differ from (3).”
    That is exactly the case here. The language of Article
    23.1 clearly suggests that all the three laws are the laws
    of The Republic of Korea with the seat of arbitration in
    Seoul, Korea and the arbitration to be conducted in
    accordance with the Rules of the International Chamber
    of Commerce.
  103. In respect of the bracketed portion in Article 23.1,
    however, it is to be seen that it was observed in Naviera
    case [(1988) 1 Lloyd’s Rep 116 (CA)] :
    “… It seems clear that the submissions advanced below
    confused the legal ‘seat’, etc. of an arbitration with the
    geographically convenient place or places for holding
    hearings. This distinction is nowadays a common
    feature of international arbitrations and is helpfully
    explained in Redfern and Hunter [Ed.: Redfern and
    Hunter on International Arbitration.] in the following
    passage under the heading ‘The Place of Arbitration’:
    ‘The preceding discussion has been on the basis that
    there is only one “place” of arbitration. This will be the
    place chosen by or on behalf of the parties; and it will be
    designated in the arbitration agreement or the terms of
    reference or the minutes of proceedings or in some
    80
    other way as the place or “seat” of the arbitration. This
    does not mean, however, that the Arbitral Tribunal must
    hold all its meetings or hearings at the place of
    arbitration. International commercial arbitration often
    involves people of many different nationalities, from
    many different countries. In these circumstances, it is by
    no means unusual for an Arbitral Tribunal to hold
    meetings — or even hearings — in a place other than
    the designated place of arbitration, either for its own
    convenience or for the convenience of the parties or
    their witnesses….
    It may be more convenient for an Arbitral Tribunal sitting
    in one country to conduct a hearing in another country
    — for instance, for the purpose of taking evidence…. In
    such circumstances, each move of the Arbitral Tribunal
    does not of itself mean that the seat of the arbitration
    changes. The seat of the arbitration remains the place
    initially agreed by or on behalf of the parties.’
    These aspects need to be borne in mind when one
    comes to the Judge’s construction of this policy.”
    It would be clear from this that the bracketed portion in
    the article was not for deciding upon the seat of the
    arbitration, but for the convenience of the parties in case
    they find to hold the arbitration proceedings somewhere
    else than Seoul, Korea. The part which has been quoted
    above from Naviera Amazonica Peruana
    S.A. v. Compania International de Seguros del
    Peru [(1988) 1 Lloyd’s Rep 116 (CA)] supports this
    inference.
  104. In that view, my inferences are that:
    (i) The clear language of Articles 22 and 23 of the
    distributorship agreement between the parties in this
    case spells out a clear agreement between the parties
    excluding Part I of the Act.
    (ii) The law laid down in Bhatia International v. Bulk
    Trading S.A. [(2002) 4 SCC 105] and Indtel Technical
    Services (P) Ltd. v. W.S. Atkins Rail Ltd. [(2008) 10 SCC
    308] , as also in Citation Infowares Ltd. v. Equinox
    81
    Corpn. [(2009) 7 SCC 220] is not applicable to the
    present case.
    (iii) Since the interpretation of Article 23.1 suggests that
    the law governing the arbitration will be Korean Law and
    the seat of arbitration will be Seoul in Korea, there will
    be no question of applicability of Section 11(6) of the Act
    and the appointment of arbitrator in terms of that
    provision.”
  105. In Videocon Industries Ltd. v. Union of India (2011) 6 SCC 161,
    this Court was concerned with an arbitration agreement between the
    parties as follows:
    “34.12. Venue and law of arbitration agreement.—The
    venue of sole expert, conciliation or arbitration
    proceedings pursuant to this article, unless the parties
    otherwise agree, shall be Kuala Lumpur, Malaysia, and
    shall be conducted in the English language. Insofar as
    practicable, the parties shall continue to implement the
    terms of this contract notwithstanding the initiation of
    arbitral proceedings and any pending claim or dispute.
    Notwithstanding the provisions of Article 33.1, the
    arbitration agreement contained in this Article 34 shall
    be governed by the laws of England.”
  106. Referring to Sections 3 and 53 of the English Arbitration Act, 1996,
    the Court held:
    “20. We shall first consider the question whether Kuala
    Lumpur was the designated seat or juridical seat of
    arbitration and the same had been shifted to London. In
    terms of Article 34.12 of the PSC entered into by 5
    parties, the seat of arbitration was Kuala Lumpur,
    Malaysia. However, due to outbreak of epidemic SARS,
    the Arbitral Tribunal decided to hold its sittings first at
    Amsterdam and then at London and the parties did not
    82
    object to this. In the proceedings held on 14-10-2003
    and 15-10-2003 at London, the Arbitral Tribunal
    recorded the consent of the parties for shifting the
    juridical seat of arbitration to London. Whether this
    amounted to shifting of the physical or juridical seat of
    arbitration from Kuala Lumpur to London? The decision
    of this would depend on a holistic consideration of the
    relevant clauses of the PSC.
  107. Though, it may appear repetitive, we deem it
    necessary to mention that as per the terms of
    agreement, the seat of arbitration was Kuala Lumpur. If
    the parties wanted to amend Article 34.12, they could
    have done so only by a written instrument which was
    required to be signed by all of them. Admittedly, neither
    was there any agreement between the parties to the
    PSC to shift the juridical seat of arbitration from Kuala
    Lumpur to London nor was any written instrument
    signed by them for amending Article 34.12. Therefore,
    the mere fact that the parties to the particular arbitration
    had agreed for shifting of the seat of arbitration to
    London cannot be interpreted as anything except
    physical change of the venue of arbitration from Kuala
    Lumpur to London.”
  108. In Enercon (India) Ltd. (supra), this Court was concerned with an
    arbitration clause which stated that the venue shall be in London. The
    Court held, on the facts of that case, that since the substantive law of
    the contract, the curial law of the proceedings, and the law governing
    the arbitration agreement were all India, the seat would be India –
    London only being the venue for holding meetings. The Court then
    held, following the Naviera Amazonica Peruana S.A. v. Compania
    83
    Internacional De Seguros Del Peru (1988) 1 Lloyd’s Rep 116 (CA)
    case, that the lex fori of the arbitral proceedings, namely, the place in
    which arbitration is to be held, must be considered to be the seat of
    the arbitral proceedings, other things being equal, as follows:
    “100. On the facts of the case, it was observed
    in Naviera Amazonica case [Naviera Amazonica
    Peruana S.A. v. Compania Internacional De Seguros
    Del Peru, (1988) 1 Lloyd’s Rep 116 (CA)] that since
    there was no contest on Law 1 and Law 2, the entire
    issue turned on Law 3, “the law governing the conduct
    of the arbitration”. This is usually referred to as
    the curial or procedural law, or the lex fori. Thereafter,
    the Court approvingly quoted the following observation
    from Dicey & Morris on the Conflict of Laws (11th Edn.):
    “English law does not recognise the concept of a
    delocalised arbitration or of arbitral procedures floating
    in the transnational firmament, unconnected with any
    municipal system of law.” It is further held that
    “accordingly every arbitration must have a ‘seat’ or
    ‘locus arbitri’ or ‘forum’ which subjects its procedural
    rules to the municipal law which is there in force”. The
    Court thereafter culls out the following principle:
    “Where the parties have failed to choose the law
    governing the arbitration proceedings, those
    proceedings must be considered, at any rate prima
    facie, as being governed by the law of the country in
    which the arbitration is held, on the ground that it is the
    country most closely connected with the proceedings.”
    The aforesaid classic statement of the conflict of law
    rules as quoted in Dicey & Morris on the Conflict of
    Laws (11th Edn.), Vol. 1, was approved by the House of
    Lords in James Miller & Partners Ltd. v. Whitworth
    Street Estates (Manchester) Ltd. [1970 AC 583 : (1970)
    84
    2 WLR 728 : (1970) 1 All ER 796 : (1970) 1 Lloyd’s Rep
    269 (HL)] and Mustill, J. in Black Clawson International
    Ltd. v. Papierwerke Waldhof-Aschaffenburg A.G. [(1981)
    2 Lloyd’s Rep 446 at p. 453] , a little later characterised
    the same proposition as “the law of the place where the
    reference is conducted, the lex fori”. The position of law
    in India is the same.
  109. The Court then examined Braes of Doune Wind Farm (Scotland) v.
    Alfred McAlpine Business Services Ltd. [2008] EWHC 436 (TCC)
    in some detail, and concluded in paragraph 118 as follows:
    “118. In Braes of Doune [Braes of Doune Wind Farm
    (Scotland) Ltd. v. Alfred McAlpine Business Services
    Ltd., [2008] Bus LR D 137 (QBD) : 2008 EWHC 426
    (TCC)] , detailed examination was undertaken by the
    Court to discern the intention of the parties as to
    whether the place mentioned refers to venue or
    the seat of the arbitration. The factual situation in the
    present case is not as difficult or complex as the parties
    herein have only designated London as a venue.
    Therefore, if one has to apply the reasoning and logic of
    Akenhead, J., the conclusion would be irresistible that
    the parties have designated India as the seat. This is
    even more so as the parties have not agreed that the
    courts in London will have exclusive jurisdiction to
    resolve any dispute arising out of or in connection with
    the contract, which was specifically provided in Clause
    1.4.1 of the EPC contract examined by Akenhead, J.
    in Braes of Doune [Braes of Doune Wind Farm
    (Scotland) Ltd. v. Alfred McAlpine Business Services
    Ltd., [2008] Bus LR D 137 (QBD) : 2008 EWHC 426
    (TCC)] . In the present case, except for London being
    chosen as a convenient place/venue for holding the
    meetings of the arbitration, there is no other factor
    connecting the arbitration proceedings to London.”
    85
  110. The Court then made a reference to C v. D [2007] EWCA Civ. 182,
    where the Court, following C v. D (supra), held:
    “122. Longmore, J. of the Court of Appeal observed:
    (C v. D case [[2008] Bus LR 843 : 2007 EWCA Civ
    1282] , Bus LR p. 851, paras 16-17)
    “16. I shall deal with Mr Hirst’s arguments in due course
    but, in my judgment, they fail to grapple with the central
    point at issue which is whether or not, by choosing
    London as the seat of the arbitration, the parties must
    be taken to have agreed that proceedings on the award
    should be only those permitted by English law. In my
    view they must be taken to have so agreed for the
    reasons given by the Judge. The whole purpose of the
    balance achieved by the Bermuda Form (English
    arbitration but applying New York law to issues arising
    under the policy) is that judicial remedies in respect of
    the award should be those permitted by English law and
    only those so permitted. Mr Hirst could not say (and did
    not say) that English judicial remedies for lack of
    jurisdiction on procedural irregularities under Sections
    67 and 68 of the Indian Arbitration Act, 1996 were not
    permitted; he was reduced to saying that New York
    judicial remedies were also [Ed.: The word “also” has
    been emphasised in original.] permitted. That, however,
    would be a recipe for litigation and (what is worse)
    confusion which cannot have been intended by the
    parties. No doubt New York law has its own judicial
    remedies for want of jurisdiction and serious irregularity
    but it could scarcely be supposed that a party aggrieved
    by one part of an award could proceed in one
    jurisdiction and a party aggrieved by another part of an
    award could proceed in another jurisdiction. Similarly, in
    the case of a single complaint about an award, it could
    not be supposed that the aggrieved party could
    complain in one jurisdiction and the satisfied party be
    entitled to ask the other jurisdiction to declare its
    86
    satisfaction with the award. There would be a serious
    risk of parties rushing to get the first judgment or of
    conflicting decisions which the parties cannot have
    contemplated.
  111. It follows from this that a choice of seat for the
    arbitration must be a choice of forum for remedies
    seeking to attack the award.”
    On the facts of the case, the Court held that the seat of
    the arbitration was in England and accordingly
    entertained the challenge to the award.”
  112. Reference was made to Roger Shashoua (supra) in paragraphs 124
    to 128, and then to various other judgments, including BALCO
    (supra), as follows:
    “134. It is accepted by most of the experts in the law
    relating to international arbitration that in almost all the
    national laws, arbitrations are anchored to
    the seat/place/situs of arbitration. Redfern and Hunter
    on International Arbitration (5th Edn., Oxford University
    Press, Oxford/New York 2009), in Para 3.54 concludes
    that “the seat of the arbitration is thus intended to be its
    centre of gravity”. In BALCO [Bharat Aluminium
    Co. v. Kaiser Aluminium Technical Services Inc., (2012)
    9 SCC 552 : (2012) 4 SCC (Civ) 810] , it is further
    noticed that this does not mean that all proceedings of
    the arbitration are to be held at the seat of arbitration.
    The arbitrators are at liberty to hold meetings at a place
    which is of convenience to all concerned. This may
    become necessary as arbitrators often come from
    different countries. Therefore, it may be convenient to
    hold all or some of the meetings of the arbitration in a
    location other than where the seat of arbitration is
    located. In BALCO, the relevant passage from Redfern
    and Hunter has been quoted which is as under: (SCC p.
    598, para 75)
    87
    “75. … ‘The preceding discussion has been on the basis
    that there is only one “place” of arbitration. This will be
    the place chosen by or on behalf of the parties; and it
    will be designated in the arbitration agreement or the
    terms of reference or the minutes of proceedings or in
    some other way as the place or “seat” of the arbitration.
    This does not mean, however, that the Arbitral
    Tribunal must hold all its meetings or hearings at the
    place of arbitration. International commercial arbitration
    often involves people of many different nationalities,
    from many different countries. In these circumstances, it
    is by no means unusual for an Arbitral Tribunal to hold
    meetings—or even hearings—in a place other than the
    designated place of arbitration, either for its own
    convenience or for the convenience of the parties or
    their witnesses…. It may be more convenient for an
    Arbitral Tribunal sitting in one country to conduct a
    hearing in another country — for instance, for the
    purpose of taking evidence…. In such circumstances
    each move of the Arbitral Tribunal does not of itself
    mean that the seat of arbitration changes. The seat of
    arbitration remains the place initially agreed by or on
    behalf of the parties.’ (Naviera case [Naviera
    Amazonica Peruana S.A. v. Compania Internacional De
    Seguros Del Peru, (1988) 1 Lloyd’s Rep 116 (CA)] ,
    Lloyd’s Rep p. 121)”
    These observations have also been noticed in Union of
    India v. McDonnell Douglas Corpn. [(1993) 2 Lloyd’s
    Rep 48]”
  113. The Court finally concluded:
    “135. In the present case, even though the venue of
    arbitration proceedings has been fixed in London, it
    cannot be presumed that the parties have intended
    the seat to be also in London. In an international
    commercial arbitration, venue can often be different
    from the seat of arbitration. In such circumstances, the
    88
    hearing of the arbitration will be conducted at
    the venue fixed by the parties, but this would not bring
    about a change in the seat of the arbitration. This is
    precisely the ratio in Braes of Doune [Braes of Doune
    Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business
    Services Ltd., [2008] Bus LR D 137 (QBD) : 2008
    EWHC 426 (TCC)] . Therefore, in the present case, the
    seat would remain in India.”
  114. In Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd. and
    Anr. (2015) 9 SCC 172, the Court dealt with an arbitration clause between the parties which read as follows:
    “5. If any dispute or difference should arise under this
    charter, general average/arbitration in London to apply,
    one to be appointed by each of the parties hereto, the
    third by the two so chosen, and their decision or that of
    any two of them, shall be final and binding, and this
    agreement may, for enforcing the same, be made a rule
    of court. Said three parties to be commercial men who
    are the members of the London Arbitrators Association.
    This contract is to be governed and construed according
    to the English law. For disputes where total amount
    claimed by either party does not exceed US $50,000 the
    arbitration should be conducted in accordance with
    small claims procedure of the London Maritime
    Arbitration Association.”
  115. After referring, in extenso, to a large number of English decisions and
    the decisions of this Court, the Court concluded:
    “48. In the present case, the agreement stipulates that
    the contract is to be governed and construed according
    to the English law. This occurs in the arbitration clause.
    Mr Viswanathan, learned Senior Counsel, would submit
    that this part has to be interpreted as a part of “curial
    89
    law” and not as a “proper law” or “substantive law”. It is
    his submission that it cannot be equated with the seat of
    arbitration. As we perceive, it forms as a part of the
    arbitration clause. There is ample indication through
    various phrases like “arbitration in London to apply”,
    arbitrators are to be the members of the “London
    Arbitration Association” and the contract “to be
    governed and construed according to the English law”.
    It is worth noting that there is no other stipulation
    relating to the applicability of any law to the agreement.
    There is no other clause anywhere in the contract. That
    apart, it is also postulated that if the dispute is for an
    amount less than US $50,000 then, the arbitration
    should be conducted in accordance with small claims
    procedure of the London Maritime Arbitration
    Association. When the aforesaid stipulations are read
    and appreciated in the contextual perspective, “the
    presumed intention” of the parties is clear as crystal that
    the juridical seat of arbitration would be London.”
  116. Most recently, in Brahmani River Pellets (supra), this Court in a domestic arbitration considered clause 18 – which was the arbitration
    agreement between the parties – and which stated that arbitration
    shall be under Indian Arbitration and Conciliation Act, 1996, and the
    venue of arbitration shall be Bhubaneswar. After citing several judgments of this Court and then referring to Indus Mobile Distribution
    (supra), the Court held:
    “18. Where the contract specifies the jurisdiction of
    the court at a particular place, only such court will
    have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the
    present case, the parties have agreed that the
    “venue” of arbitration shall be at Bhubaneswar. Con90
    sidering the agreement of the parties having
    Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As
    held in Swastik, non-use of words like “exclusive jurisdiction”, “only”, “exclusive”, “alone” is not decisive and
    does not make any material difference.
  117. When the parties have agreed to the have the
    “venue” of arbitration at Bhubaneshwar, the Madras
    High Court erred in assuming the jurisdiction under
    Section 11(6) of the Act. Since only the Orissa High
    Court will have the jurisdiction to entertain the petition
    filed under Section 11(6) of the Act, the impugned order is liable to be set aside.”
  118. 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
    91
    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
    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 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.
    Correctness of the judgment in Hardy Exploration and Production (India) Ltd.
  119. Roger Shashoua (supra) was expressly referred to in paragraphs
    108 and 109 of BALCO (supra), and followed in paragraph 110 as ex92
    tracted above. BALCO (supra) then summed up the legal position as
    follows:
    “116. The legal position that emerges from a conspectus of all the decisions, seems to be, that the
    choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that
    country relating to the conduct and supervision of arbitrations will apply to the proceedings.
  120. It would, therefore, follow that if the arbitration
    agreement is found or held to provide for a seat /
    place of arbitration outside India, then the provision
    that the Arbitration Act, 1996 would govern the arbitration proceedings, would not make Part I of the Arbitration Act, 1996 applicable or enable Indian Courts to
    exercise supervisory jurisdiction over the arbitration
    or the award. It would only mean that the parties have
    contractually imported from the Arbitration Act, 1996,
    those provisions which are concerned with the internal conduct of their arbitration and which are not inconsistent with the mandatory provisions of the English Procedural Law/Curial Law. This necessarily follows from the fact that Part I applies only to arbitrations having their seat / place in India.”
  121. In Roger Shashoua & Ors. v. Mukesh Sharma & Ors., (2017) 14
    SCC 722, a Division Bench of this Court, after referring to a number
    of judgments, referred to the English Shashoua judgment3
    as follows:
    “46. As stated earlier, in Shashoua Cooke, J., in the
    course of analysis, held that “London arbitration” is a
    well known phenomenon which is often chosen by
    foreign nationals with a different law, such as the law
    of New York, governing the substantive rights of the
    parties and it is because of the legislative framework
    and supervisory powers of the courts here which
    3
    [2009] EWHC 957 (Comm).
    93
    many parties are keen to adopt. The learned Judge
    has further held that when there is an express designation of the arbitration venue as London 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 London is the juridical seat and English law the curial law.”
  122. The Division bench then turned down an argument that BALCO
    (supra) had not expressly approved the Shashoua principle, as follows:
    “54. We had earlier extracted extensively from the
    said judgment, as we find, the Court after adverting to
    various aspects, has categorically held that the High
    Court had not followed Shashoua principle. The various decisions referred to in Enercon (India) Ltd.
    (supra), the analysis made and the propositions deduced leads to an indubitable conclusion that
    Shashoua principle has been accepted by Enercon
    (India) Ltd. (supra). It is also to be noted that in
    BALCO, the Constitution Bench has not merely reproduced few paragraphs from Shashoua but has also
    referred to other decisions on which Shashoua has
    placed reliance upon. As we notice, there is analysis
    of earlier judgments, though it does not specifically
    state that “propositions laid down in Shashoua are
    accepted”. On a clear reading, the ratio of the decision in BALCO, in the ultimate eventuate, reflects that
    the Shashoua principle has been accepted and the
    two-Judge Bench in Enercon (India) Ltd. (supra), after
    succinctly analyzing it, has stated that the said principles have been accepted by the Constitution Bench.
    Therefore, we are unable to accept the submission of
    Mr. Chidambaram that the finding recorded in Enercon (India) Ltd. (supra) that Shashoua principle has
    been accepted in BALCO should be declared as per
    incuriam.”
    94
  123. The Court then set out the arbitration clause and the governing law on
    the facts of the case as follows:
    “69. Though we have opined that Shashoua principle
    has been accepted in BALCO and Enercon (India)
    Ltd. (supra), yet we think it apt to refer to the clauses
    in the agreement and scrutinize whether there is any
    scope to hold that the courts in India could have entertained the petition. Clause 14 of the shareholders
    agreement (SHA) refers to arbitration. The said
    Clause reads thus:
  124. ARBITRATION
    14.1 …Each party shall nominate one arbitrator and in
    the event of any difference between the two arbitrators, a third arbitrator/umpire shall be appointed. The
    arbitration proceedings shall be in accordance with
    the Rules of Conciliation and Arbitration of the International Chamber of Commerce Paris.
    14.2 Proceedings in such arbitrations shall be conducted in the English language.
    14.3 The arbitration award shall be substantiated in
    writing and shall be final and binding on the parties.
    14.4 The venue of the arbitration shall be London,
    United Kingdom.”
  125. Clause 17.6 deals with governing law, which
    reads as follows:
    17.6 GOVERNING LAW
    This Agreement shall be governed by and construed
    in accordance with the laws of India.”
  126. The court then went on to state:
    95
    “72. It is worthy to note that the arbitration agreement
    is not silent as to what law and procedure is to be followed. On the contrary, Clause 14.1 lays down that
    the arbitration proceedings shall be in accordance
    with the Rules of Conciliation and Arbitration of the
    ICC. In Enercon (India) Ltd. (supra), the two-Judge
    Bench referring to Shashoua case accepted the view
    of Cooke, J. that the phrase “venue of arbitration shall
    be in London, UK” was accompanied by the provision
    in the arbitration Clause or arbitration to be conducted
    in accordance with the Rules of ICC in Paris. The
    two-Judge Bench accepted the Rules of ICC, Paris
    which is supernational body of Rules as has been
    noted by Cooke, J. and that is how it has accepted
    that the parties have not simply provided for the location of hearings to be in London. To elaborate, the
    distinction between the venue and the seat remains.
    But when a Court finds there is prescription for venue
    and something else, it has to be adjudged on the
    facts of each case to determine the juridical seat. As
    in the instant case, the agreement in question has
    been interpreted and it has been held that London is
    not mentioned as the mere location but the courts in
    London will have the jurisdiction, another interpretative perception as projected by the learned senior
    Counsel is unacceptable.
    xxx xxx xxx
  127. In view of the aforesaid analysis, we allow the appeals and set aside the judgment of the High Court of
    Delhi that has held that courts in India have jurisdiction, and has also determined that Gautam Budh Nagar has no jurisdiction and the petition Under Section
    34 has to be filed before the Delhi High Court. Once
    the courts in India have no jurisdiction, the aforesaid
    conclusions are to be nullified and we so do. In the
    facts and circumstances of the case, there shall be no
    order as to costs.”
  128. The stage is now set for consideration of the recent judgment of a
    Three Judge Bench of this Court in Hardy Exploration and Produc96
    tion (India) Inc. (supra). The precise question that had been referred
    to the Three Judge Bench in Hardy Exploration and Production (India) Inc. (supra) was as to whether the ratio of Sumitomo Heavy Industries Ltd. v. ONGC Ltd. & Ors. (1998) 1 SCC 305 – a judgment
    delivered under the Arbitration Act, 1940 – would have any impact on
    the “juridical seat” doctrine in arbitration law, as developed in England
    and by our courts. The Three Judge Bench answered the reference
    as follows:
    “27. In view of the aforesaid development of law,
    there is no confusion with regard to what the seat of
    arbitration and venue of arbitration mean. There is no
    shadow of doubt that the arbitration Clause has to be
    read in a holistic manner so as to determine the jurisdiction of the Court. That apart, if there is mention of
    venue and something else is appended thereto, depending on the nature of the prescription, the Court
    can come to a conclusion that there is implied exclusion of Part I of the Act. The principle laid down in
    Sumitomo Heavy Industries Ltd. (supra) has been referred to in Reliance Industries Limited (II) and distinguished. In any case, it has no applicability to a controversy under the Act. The said controversy has to
    be governed by the BALCO principle or by the agreement or by the principle of implied exclusion as has
    been held in Bhatia International.
  129. Thus, we answer the reference accordingly.”
  130. Having answered the reference, the Court then went on to consider
    the arbitration clause in the facts of that case, which was set out in
    paragraph 30 as follows:
    97
    “30. Article 33 deals with “Sole expert, conciliation
    and arbitrator”. Article 33.9 and 33.12 read thus:
    33.9 Arbitration proceedings shall be conducted in
    accordance with the UNICITRAL Model Law on
    International Commercial Arbitration of 1985 except
    that in the event of any conflict between the Rules
    and the provisions of this Article 33, the provisions of
    this Article 33 shall govern.
    xxx xxx xxx
    33.12 The venue of conciliation or arbitration
    proceedings pursuant to this Article unless the parties
    otherwise agree, shall be Kuala Lumpur and shall be
    conducted in English language. Insofar as practicable
    the parties shall continue to implement the terms of
    this contract notwithstanding the initiation of
    arbitration proceedings and any pending claim or
    dispute.”
  131. The Court then went on to see for itself Articles 20 and 31 of the
    UNCITRAL Model Law and then went on to state that under the
    UNCITRAL Model Law, either the juridical seat of the arbitral
    proceedings is indicated in the agreement between the parties, or if it
    is not, must be determined by the Arbitral Tribunal. Holding that the
    arbitration clause, on the facts of that case, referred to the “venue” as
    Kuala Lumpur, the Court went on to hold that there was no
    determination of any “juridical seat” by agreement, and would
    therefore have to be determined by the Arbitral Tribunal. As there was
    no such determination by the Arbitral Tribunal, the Court then
    concluded:
    98
    “40. The said test clearly means that the expression
    of determination signifies an expressive opinion. In
    the instant case, there has been no adjudication and
    expression of an opinion. Thus, the word ‘place’
    cannot be used as seat. To elaborate, a venue can
    become a seat if something else is added to it as a
    concomitant. But a place unlike seat, at least as is
    seen in the contract, can become a seat if one of the
    conditions precedent is satisfied. It does not ipso
    facto assume the status of seat. Thus understood,
    Kuala Lumpur is not the seat or place of arbitration
    and the interchangeable use will not apply in stricto
    sensu.
  132. In view of the aforesaid analysis, the irresistible
    conclusion is that the Courts in India have jurisdiction
    and, therefore, the order passed by the Delhi High
    Court is set aside. Resultantly, the appeal stands
    allowed and the High Court is requested to deal with
    the application preferred Under Section 34 of the Act
    as expeditiously as possible. There shall be no order
    as to costs.”
  133. The Three Judge Bench in Hardy Exploration and Production (India) Inc (supra) failed to apply the Shashoua principle to the arbitration clause in question. Had the Shashoua principle been applied, the
    answer would have been that Kuala Lumpur, which was stated to be
    the “venue” of arbitration proceedings, being governed by the UNCITRAL Model Law, would be governed by a supranational set of rules,
    and there being no other contrary indicator, it would be clear that
    Kuala Lumpur would therefore be the juridical “seat” of the arbitration.
    99
  134. As we have seen hereinabove, the judgement of Cooke, J. in Roger
    Shashoua and Ors. v. Mukesh Sharma4
    , was expressly approved by
    the 5-Judge Bench in BALCO (supra), as was stated by the Supreme
    Court of India in Roger Shashoua and Ors. v. Mukesh Sharma and
    Ors.5
    By failing to apply the Shashoua principle to the arbitration
    clause in question, the Three Judge Bench in Hardy Exploration and
    Production (India) Inc (supra) has not followed the law as to determination of a “juridical seat”, laid down by a Five Judge Bench of this
    Court in BALCO (supra). The result in Hardy Exploration and Production (India) Inc (supra) is that a foreign award that would be delivered in Kuala Lumpur, would now be liable to be challenged in the
    Courts at Kuala Lumpur, and also be challenged in the courts in India,
    under Section 34 of Part I of the Arbitration Act, 1996. This is exactly
    the situation that this Court encountered when it decided the case of
    Venture Global Engineering v. Satyam Computer Services Ltd. &
    Anr., (2008) 4 SCC 190. The Five Judge Bench in BALCO (supra)
    expressly overruled Venture Global Engineering (supra) as follows:
    “143…With these observations, the matter was remanded back to the trial court to dispose of the suit
    on merits. The submissions made by K.K. Venugopal,
    as noticed in para 42, epitomise the kind of chaos
    4
    [2009] EWHC 957 (Comm)
    5
    (2017) 14 SCC 722
    100
    which would be created by two court systems, in two
    different countries, exercising concurrent jurisdiction
    over the same dispute. There would be a clear risk of
    conflicting decisions. This would add to the problems
    relating to enforcement of such decisions. Such a situation would undermine the policy underlying the
    New York Convention or the UNCITRAL Model Law.
    Therefore, we are of the opinion that appropriate
    manner to interpret the aforesaid provision is that “alternative two” will become available only if “alternative
    one” is not available.
    xxx xxx xxx
    “154. At this stage, we may notice that in spite of the
    aforesaid international understanding of the second
    limb of Article V(1)(e), this Court has proceeded on a
    number of occasions to annul an award on the basis
    that parties had chosen Indian law to govern the substance of their dispute. The aforesaid view has been
    expressed in Bhatia International [(2002) 4 SCC 105]
    and Venture Global Engg. [(2008) 4 SCC 190] In our
    opinion, accepting such an interpretation would be to
    ignore the spirit underlying the New York Convention
    which embodies a consensus evolved to encourage
    consensual resolution of complicated, intricate and in
    many cases very sensitive international commercial
    disputes. Therefore, the interpretation which hinders
    such a process ought not to be accepted. This also
    seems to be the view of the national courts in different jurisdictions across the world. For the reasons
    stated above, we are also unable to agree with the
    conclusions recorded by this Court in Venture Global
    Engg. [(2008) 4 SCC 190] that the foreign award
    could be annulled on the exclusive grounds that the
    Indian law governed the substance of the dispute.
    Such an opinion is not borne out by the huge body of
    judicial precedents in different jurisdictions of the
    world.”
  135. The Five Judge Bench then went on to state:
    101
    “195. With utmost respect, we are unable to agree
    with the conclusions recorded in the judgments of this
    Court in Bhatia International (supra) and Venture
    Global Engineering (supra). In our opinion, the provision contained in Section 2(2) of the Arbitration Act,
    1996 is not in conflict with any of the provisions either
    in Part I or in Part II of the Arbitration Act, 1996. In a
    foreign seated international commercial arbitration, no
    application for interim relief would be maintainable
    under Section 9 or any other provision, as applicability of Part I of the Arbitration Act, 1996 is limited to all
    arbitrations which take place in India. Similarly, no
    suit for interim injunction simplicitor would be maintainable in India, on the basis of an international commercial arbitration with a seat outside India.”
  136. The decision in Hardy Exploration and Production (India) Inc.
    (supra) is therefore contrary to the Five Judge Bench in BALCO
    (supra), in that it failed to apply the Shashoua principle to the arbitration clause in question. The Hardy Exploration and Production (India) Inc. (supra) decision would lead to the result that a foreign award
    would not only be subject to challenge in the country in which it was
    made, but also subject to challenge under Section 34 of Part I of the
    Arbitration Act, 1996, which would lead to the chaos spoken of in
    paragraph 143 of BALCO (supra), with the concomitant risk of conflicting decisions, as held in Venture Global Engineering (supra)

[overruled in BALCO (supra)]

, which would add to problems relating
to enforcement, and undermine the policy underlying the New York
102
Convention and the UNCITRAL Model Law. We, therefore, declare
that the judgment in Hardy Exploration and Production (India) Inc.
(supra), being contrary to the Five Judge Bench in BALCO (supra),
cannot be considered to be good law. Coming to the impugned judgment in the present appeals, it is clear
that the reasoning followed stems from the subject-matter test that
flows from the definition of ‘court’ in Section 2(1)(e)(i) of the Act.
According to the impugned judgment, since the agreement was
executed at Faridabad, part of the cause of action would arise at
Faridabad, clothing Faridabad courts with jurisdiction for the purposes
of filing a Section 34 petition. The second part of the reasoning is that
Faridabad is the place where the request for reference to arbitration
was received, as a result of which part of the cause of action arose in
Faridabad, which ousts the jurisdiction of Courts of New Delhi, in
which no part of the cause of action arose. We have extracted the arbitration agreement in the present case (as
contained in Clause 67.3 of the agreement between the parties) in
paragraph 3 of this judgment. As per the arbitration agreement, in
case a dispute was to arise with a foreign contractor, clause 67.3(ii)
would apply. Under this sub-clause, a dispute which would amount to
103
an ‘international commercial arbitration’ within the meaning of Section
2(1)(f) of the Arbitration Act, 1996, would have to be finally settled in
accordance with the Arbitration Act, 1996 read with the UNCITRAL Arbitration Rules, and in case of any conflict, the Arbitration Act, 1996 is
to prevail (as an award made under Part I is considered a domestic
award under Section 2(7) of the Arbitration Act, 1996 notwithstanding
the fact that it is an award made in an international commercial arbitration). Applying the Shashoua principle delineated above, it is clear
that if the dispute was with a foreign contractor under Clause 67.3 of
the agreement, the fact that arbitration proceedings shall be held at
New Delhi/Faridabad, India in sub-clause (vi) of Clause 67.3, would
amount to the designation of either of these places as the “seat” of arbitration, as a supranational body of law is to be applied, namely, the
UNCITRAL Arbitration Rules, in conjunction with the Arbitration Act, As such arbitration would be an international commercial arbitration which would be decided in India, the Arbitration Act, 1996 is to
apply as well. There being no other contra indication in such a situation, either New Delhi or Faridabad, India is the designated “seat” under the agreement, and it is thereafter for the parties to choose as to
in which of the two places the arbitration is finally to be held.
104 Given the fact that if there were a dispute between NHPC Ltd. and a
foreign contractor, clause 67.3(vi) would have to be read as a clause
designating the “seat” of arbitration, the same must follow even when
sub-clause (vi) is to be read with sub-clause (i) of Clause 67.3, where
the dispute between NHPC Ltd. would be with an Indian Contractor.
The arbitration clause in the present case states that “Arbitration Proceedings shall be held at New Delhi/Faridabad, India…”, thereby signifying that all the hearings, including the making of the award, are to
take place at one of the stated places. Negatively speaking, the
clause does not state that the venue is so that some, or all, of the
hearings take place at the venue; neither does it use language such
as “the Tribunal may meet”, or “may hear witnesses, experts or parties”. The expression “shall be held” also indicates that the so-called
“venue” is really the “seat” of the arbitral proceedings. The dispute is
to be settled in accordance with the Arbitration Act, 1996 which, therefore, applies a national body of rules to the arbitration that is to be
held either at New Delhi or Faridabad, given the fact that the present
arbitration would be Indian and not international. It is clear, therefore,
that even in such a scenario, New Delhi/Faridabad, India has been
designated as the “seat” of the arbitration proceedings.
105
100.However, the fact that in all the three appeals before us the proceedings were finally held at New Delhi, and the awards were signed in
New Delhi, and not at Faridabad, would lead to the conclusion that
both parties have chosen New Delhi as the “seat” of arbitration under
Section 20(1) of the Arbitration Act, 1996. This being the case, both
parties have, therefore, chosen that the Courts at New Delhi alone
would have exclusive jurisdiction over the arbitral proceedings. Therefore, the fact that a part of the cause of action may have arisen at
Faridabad would not be relevant once the “seat” has been chosen,
which would then amount to an exclusive jurisdiction clause so far as
Courts of the “seat” are concerned.
101.Consequently, the impugned judgment is set aside, and the Section
34 petition is ordered to be presented in the Courts in New Delhi, as
was held by the learned Single Judge of the Special Commercial
Court at Gurugram.
102.The appeals are allowed in the aforesaid terms.
……………………………J.
(R.F. Nariman)
……………………………J.
(Aniruddha Bose)
……………………………J.
New Delhi; (V. Ramasubramanian)
December 10, 2019
106