BGS SGS SOMA JV v. NHPC LTD.

A 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: B “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: C “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 D judgment as though they were 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)

44Copy pinpoint44. More recently, this Court in Union of India v. Amrit Lal E 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.” H (emphasis supplied)

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[R. F. NARIMAN, J.]

45Copy pinpoint45. In any case, a judgment must be read as a whole, so that A 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 Denning B 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 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 C 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 D 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 E 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 F 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 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 G 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 H

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46Copy pinpoint46. 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) 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), B 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.

47Copy pinpoint47. 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) D would refer to the “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 E 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.

48Copy pinpoint48. This Court in Indus Mobile Distribution Private Limited (supra), after referring to Sections 2(1)(e) and 20 of the Arbitration Act, F 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 G recommended the following: “Amendment of Section 20

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 H liberty to adopt the reasoning which appears to us to be correct.”

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[R. F. NARIMAN, J.]

In Section 20, delete the word “Place” and add the words “Seat A 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” (ii) In Sub-section (3), after the words “meet at any” delete the word “place” and add word “venue”. B

[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] C seat” from a “[mere] venue” of arbitration.] Amendment of Section 31

17. In Section 31 (i) In Sub-section (4), after the words “its date and the” delete the word “place” and add the word “seat”.”

18. 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.

19. 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 G the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in 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 H

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A 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 B agreement between the parties.

49Copy pinpoint49. 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

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[R. F. NARIMAN, J.]

where such a High Court does not exercise ordinary civil A 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 B

1. 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- C ” add sub-section (i) beginning with the words “in the case of an arbitration other than international commercial arbitration,” before the 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 D 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 subject-matter of the arbitration if the same had been the subject-matter of a suit, E 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.” F [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 G not exercise ordinary original civil jurisdiction.]”

50Copy pinpoint50. 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 H

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A of the cause of action may have arisen within the jurisdiction of such High Court, such High Court not having ordinary original jurisdiction. In 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.

51Copy pinpoint51. 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 E applications 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 F 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. G

52Copy pinpoint52. 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 H Roger Shashoua (supra) as follows:

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[R. F. NARIMAN, J.]

“126. Examining the fact situation in the case, the Court A in Shashoua case [Shashoua v. Sharma, (2009) 2 Lloyd’s Law Rep 376] 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 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.”

53Copy pinpoint53. The Court then concluded: “138. Once the seat of arbitration has been fixed in India, it would be in the nature of exclusive jurisdiction to exercise the supervisory powers over the arbitration...” H

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54Copy pinpoint54. 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 B 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 C 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 D 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

55Copy pinpoint55. 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 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) H “Primary conclusion

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[R. F. NARIMAN, J.]

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 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. D 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 conflicting decisions which the parties cannot have contemplated.”

56Copy pinpoint56. 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 G 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 H

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A 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.””

55. 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 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.

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[R. F. NARIMAN, J.]

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 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 C 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 G 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 and the H

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A Court where the arbitration takes place. This is evident from the example which is contained in the above quoted extract from the decision.”

57Copy pinpoint57. Having so stated, the Division Bench then went on to give a restricted meaning to Indus Mobile Distribution Private Ltd. (supra) B 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…”

58Copy pinpoint58. The Court then went on to state: E “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. F 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 exercise 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.

59Copy pinpoint59. This court is of opinion that, holding otherwise would in effect render Section 42 of the Arbitration Act ineffective and useless.

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[R. F. NARIMAN, J.]

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” D 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 E 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 case, is the Bangalore City Civil Court, cannot be said to have been excluded therefore. Accordingly, question (ii) is also answered F in favour of Antrix...”

59. 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 G 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 H

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A 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 B subsequent paragraphs in BALCO (supra), which clearly and unmistakably state that the choosing of a “seat” amounts to the choosing of 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).

60Copy pinpoint60. 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).

61Copy pinpoint61. 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

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[R. F. NARIMAN, J.]

require that all applications under Part I be made only in the Court A where the seat is located, and that Court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered ineffective or useless. Also, where it is found on the facts of a particular case that either no “seat” is designated by agreement, or the so-called “seat” B is only a convenient “venue”, then there may be several Courts where a part of the cause of action arises that may have jurisdiction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a case where parties have not agreed on the “seat” of arbitration, and before such “seat” may have been determined, on the facts of a C 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” 62.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 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 H

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A 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.”

63Copy pinpoint63. It will thus be seen that wherever there is an express B 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.

64Copy pinpoint64. 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 D reasonable expenses (including reasonable fees of counsel) to the Party(ies) that substantially prevail on merit. The provisions of the Indian Arbitration and Conciliation Act, 1996 shall apply.”

65Copy pinpoint65. The Court began its discussion on the “seat” of the arbitration by referring to Roger Shashoua (supra), and then referring to ‘The E 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 F 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” . G 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 H “significant contrary indicia” (using the language of Cooke J.)

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so as to place the “seat” of the arbitration in India. A similar issue A 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 B 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 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)

66Copy pinpoint66. 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 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 H

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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 B 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 C 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. D 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, E 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.” F (emphasis supplied)

67Copy pinpoint67. 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 G 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).

68Copy pinpoint68. In Shagang South-Asia (Hong Kong) Trading Co. Ltd. H v. Daewoo Logistics [2015] EWHC 194, the Queen’s Bench Division

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(Commercial Courts) dealt with a ‘Fixture Note’ in which the A 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.”

69Copy pinpoint69. After referring to Roger Shashoua (supra) and Enercon B 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 C the arbitration and of the application of Hong Kong law as the curial law. Clear words or ‘significant contrary indicia’ are necessary to establish that some other seat or curial law has been agreed.”

70Copy pinpoint70. In Process and Indusrial Developments Ltd. v. Nigeria D [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 E 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 F 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. … G 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 H

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A 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.”

71Copy pinpoint71. The Court then held that the gas supply agreement provided B 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 arbitration would continue up to and including the final award. Clause 20 does not refer to C 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 represented an anchoring of the entire arbitration to London rather than providing that the hearings should take place there. D 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 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 H England, unless the parties agree to change it. This would still

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allow the arbitrators to decide where particular hearings should A take place, while providing for an anchor to England for supervisory purposes, unless changed.” (emphasis supplied)

72Copy pinpoint72. Coming to the judgments of our Courts, this Court in Dozco B 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 C 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 D the International Chamber of Commerce.”

73Copy pinpoint73. 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 E (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 of the decision in Naviera Amazonica Peruana S.A. v. Compania F 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 G 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).” H

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A 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.

B 19. 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 C 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’: D ‘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 E 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 F 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, G 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 H Judge’s construction of this policy.”

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It would be clear from this that the bracketed portion in the A 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 B Peru [(1988) 1 Lloyd’s Rep 116 (CA)] supports this inference.

20. 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 C 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 D Ltd. v. Equinox 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.”

74Copy pinpoint74. 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 G 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.” H

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75Copy pinpoint75. 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 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.

D 21. 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. E 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.”

76Copy pinpoint76. 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 Internacional De Seguros Del Peru (1988) 1 Lloyd’s H Rep 116 (CA) case, that the lex fori of the arbitral proceedings, namely,

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the place in which arbitration is to be held, must be considered to be A 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 B 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) F Ltd. [1970 AC 583 : (1970) 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 G law in India is the same.

77Copy pinpoint77. 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: H

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A “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 D 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.”

78Copy pinpoint78. The Court then made a reference to C v. D [2007] EWCA E 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) F “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 G 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 H could not say (and did not say) that English judicial remedies for

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lack of jurisdiction on procedural irregularities under Sections 67 A 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 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.

17. 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.”

79Copy pinpoint79. Reference was made to Roger Shashoua (supra) in paragraphs 124 to 128, and then to various other judgments, including BALCO (supra), as follows: F “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 G York 2009), in Para 3.54 concludes that “the seat of the arbitration is thus intended to be its centre of gravity”. In B AL C O [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 H

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80Copy pinpoint80. 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 H international commercial arbitration, venue can often be different

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from the seat of arbitration. In such circumstances, the hearing A 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) B : 2008 EWHC 426 (TCC)] . Therefore, in the present case, the seat would remain in India.”

81Copy pinpoint81. 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: C “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 D 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 E Arbitration Association.”

82Copy pinpoint82. 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 F 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 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 G 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 H

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A 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.”

83Copy pinpoint83. 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 D 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. Considering 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.

19. 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.”

84Copy pinpoint84. 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 H or particular hearing, but the arbitration proceedings as a whole,

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including the making of an award at that place. This language has to be contrasted with language such as “tribunals are to meet or have witnesses, experts or the parties” where only hearings are to take place in the “venue”, which may lead to the conclusion, other things being equal, that the venue so stated is not the “seat” of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings “shall be held” at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a “venue” and not the “seat” of 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”, D which then becomes the “seat” for the purposes of arbitration. Correctness of the judgment in Hardy Exploration and Production (India) Ltd.

85Copy pinpoint85. Roger Shashoua (supra) was expressly referred to in paragraphs 108 and 109 of BALCO (supra), and followed in paragraph E 110 as extracted 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.

117. 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 H

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A 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.”

86Copy pinpoint86. In Roger Shashoua & Ors. v. Mukesh Sharma & Ors., B (2017) 14 SCC 722, a Division Bench of this Court, after referring to a number of judgments, referred to the English Shashoua judgment 3 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 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.”

87Copy pinpoint87. 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 3 H [2009] EWHC 957 (Comm).

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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.”

88Copy pinpoint88. The Court then set out the arbitration clause and the governing law on the facts of the case as follows: C “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 D thus:

14. ARBITRATION 14.¹ ...Each party shall nominate one arbitrator and in the event of any difference between the two arbitrators, a third arbitrator/ E 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. F 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.” G

70. 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.” H

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89Copy pinpoint89. The court then went on to state: “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 B 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, C 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

76. 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.” G

90Copy pinpoint90. The stage is now set for consideration of the recent judgment of a Three Judge Bench of this Court in Hardy Exploration and Production (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 H Sumitomo Heavy Industries Ltd. v. ONGC Ltd. & Ors. (1998) 1

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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 C 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.

28. Thus, we answer the reference accordingly.”

91Copy pinpoint91. 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: “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 F 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 G 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.” H

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92Copy pinpoint92. 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 B 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: C “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 D 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. E

41. 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.”

93Copy pinpoint93. 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.

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94Copy pinpoint94. As we have seen hereinabove, the judgement of Cooke, J. A in Roger Shashoua and Ors. v. Mukesh Sharma 4, 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 B 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 C 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 D 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 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), G this Court has proceeded on a number of occasions to annul an award on the basis that parties had chosen Indian law to govern

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A 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.” D

95Copy pinpoint95. The Five Judge Bench then went on to state: “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 E 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, F 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.”

96Copy pinpoint96. The decision in Hardy Exploration and Production (India) G 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, H but also subject to challenge under Section 34 of Part I of the Arbitration

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Act, 1996, which would lead to the chaos spoken of in paragraph 143 A 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 Convention and the UNCITRAL Model Law. We, therefore, declare B 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.

97Copy pinpoint97. 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. C 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, D 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.

98Copy pinpoint98. We have extracted the arbitration agreement in the present case (as contained in Clause 67.3 of the agreement between the parties) E 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 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 F 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 G 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, 1996. As such H

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A 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. B

99Copy pinpoint99. 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, C 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. F

100Copy pinpoint100. 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, G 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 H Courts of the “seat” are concerned.

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101Copy pinpoint101. Consequently, the impugned judgment is set aside, and the A 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.

102Copy pinpoint102. The appeals are allowed in the aforesaid terms. B Kalpana K. Tripathy Appeals allowed.