ARCIS CLEAN ENERGY PVT. LTD. v. PARSHVA INNOVATION

2026 INSC 1109 REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. OF 2026 (Arising out of SLP Civil No. 35915 of 2025)

ARCIS CLEAN ENERGY PVT. LTD. …APPELLANT(S)

VERSUS

PARSHVA INNOVATION …RESPONDENT(S)

JUDGMENT

MANOJ MISRA, J.

1. Leave granted.

2. This appeal impugns the order of the Delhi High

Court1 dated 11th November 2025, whereby, in exercise

of its jurisdiction under Section 11(6) of the Arbitration

and Conciliation Act, 19962, the High Court appointed

an arbitrator to resolve disputes inter se parties arising

out of a “Franchise Agreement”3 dated 03rd August 2023.

Signature Not Verified

Digitally signed by CHETAN ARORA Date: 2026.10.12 14:03:05 IST Reason:

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3. Clause 32 of the Agreement carries the arbitration

clause in the following terms:

“32. ARBITRATION AND DISPUTE RESOLUTION

32.1. Any dispute or difference between the Parties arising out of or in connection with this Agreement, including any question regarding its interpretation, existence, performance, validity, or termination, either during the term of the Agreement or at anytime thereafter, will be settled between the Parties through friendly consultations and negotiations.

32.2. If no settlement can be reached though friendly consultations and negotiations as discussed according to terms of this Agreement within thirty (30) days of one Party delivering a notice of the dispute or difference to the other Party, then such dispute will be finally settled by arbitration.

32.3. The arbitration proceedings will be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”).

32.4. The dispute or difference shall be referred to a panel of sole arbitrator to be appointed mutually by Parties. In the event of the parties not being able to concur on the appointment of a sole arbitrator then such sole arbitrator to be appointed by mutual consent of both parties as per the provisions of the Arbitration and Conciliation Act, 1996 and as amended from time to time. The precise location of the arbitration shall be within Delhi and the appointment of the sole arbitrator shall be in accordance with the rules prescribed under Arbitration and Conciliation Act, 1996.

32.5. The arbitration proceedings will be held in Goa and the language to be used in the arbitral proceedings will be English.

32.6. The prevailing Party in the arbitration proceedings will be awarded reasonable attorney’s fees, if any, and all other costs and expenses in relation to the arbitration proceedings unless the arbitrators for good cause determine otherwise.”

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4. Invoking the aforesaid clause, the respondent

proposed name of a sole arbitrator vide notice dated 25th

March 2025. The said proposal was rejected by the

appellant vide response letter dated 19th April, 2025.

Consequently, the respondent applied to the High Court

for appointing an arbitrator under Section 11(6) of the

1996 Act.

5. By the impugned order, the High Court

appointed the arbitrator and left it open for him to select

venue for the hearings in consultation with the parties.

Submissions on behalf of the appellant

6. The appellant has questioned the impugned

order on the ground that the Delhi High Court lacked

jurisdiction as the juridical seat of arbitration is in Goa.

It is submitted that the agreement between the parties

clearly discloses that the parties shall submit to the

exclusive jurisdiction of the competent court in Goa,

therefore the juridical seat would be Goa. In support of

his submission, besides the arbitration clause, our

attention was invited to Clause 38 of the Agreement,

which reads as under:-

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“38. GOVERNING LAW AND JURISDICTION

“This Agreement shall be interpreted and construed exclusively in accordance with the laws of India and parties shall agree to submit to the exclusive jurisdiction of competent courts in Goa, India.”

7. By relying on Clauses 32 and 38 of the

Agreement, the learned counsel for the appellant

submits that Clause 32.4, which provides for location of

the arbitration within Delhi, is about the venue whereas

Clauses 32.5 and 38 of the Agreement determine the

juridical seat. It is urged that the High Court mistook

venue as the juridical seat; therefore, the impugned

order is liable to be set aside. In support of his

submissions, the learned counsel for the appellant has

placed reliance on the following decisions:

(i) Arif Azim Company Limited v. Micromax

Informatics FZE4;

(ii) Indus Mobile Distribution Private Limited v.

Datawind Innovations Private Limited and

others5;

4 (2025) 9 SCC 750 5 (2017) 7 SCC 678

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(iii) Swastik Gases (P) Ltd. v. Indian Oil Corporation

Ltd.6;

(iv) BGS SGS SOMA JV v. NHPC LIMITED7; and

(iv) Activitas Management Advisor Private Limited v.

Mind Plus Healthcare Private Limited8.

8. Per contra, the learned counsel for the

respondent supported the impugned order by

submitting that the arbitration agreement clause is

considered independent of other parts of the contract;

therefore, Clause 38 of the Agreement would not

determine the juridical seat for the purposes of

arbitration. More so, when Clause 32 of the Agreement

specifically states that location of the arbitration shall be

in Delhi. Thus, for the purposes of arbitration, the

juridical seat would be Delhi and not Goa. He further

contends that Clause 32.5 would not override Clause

32.4 because Clause 32.4 comes first and would prevail

over any subsequent clause in the Agreement. He,

therefore, prays that the appeal be dismissed.

6 (2013) 9 SCC 32 7 (2020) 4 SCC 234 8 2025 SCC Online SC 3069

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9. In support of his submissions, the learned counsel

for the respondent relied on the following decisions:

(i) Sasan Power Ltd. v. North American

Coal Corporation (India) Pvt. Ltd.9;

(ii) M/s. Cable Corporation of India Ltd. v.

M/s. Jay Pee Sports International Ltd.

and Another10;

(iii) Sunil Kumar Chandra v. Spire Techpark

(P) Ltd.11;

(iv) Ramkishorelal and Another v. Kamal

Narayan12;

(v) Shree Bhowani Cotton Mills v. Union

Textile Traders13 ;

(vi) M/s Lyrus Life Sciences Pvt. Ltd. v. M/s

Acme Generics LLP14

10. We have accorded due consideration to the rival

submissions and have perused the materials placed on

record.

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Analysis

11. Before we proceed to interpret the Agreement in

question for the purposes of determining whether the

Delhi High Court had the jurisdiction to appoint the

arbitrator, it would be useful to consider a few decisions

wherein a distinction between the “seat” of arbitration

and the “venue” for arbitral proceedings has been carved

out.

12. In Indus Mobile (supra), this Court held that

seat is akin to an exclusive jurisdiction clause. It was

held that under 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

agreement. The neutral venue may not, in the classical

sense, have jurisdiction, that is, no part of the cause of

action may have arisen at the neutral venue, and neither

would any of the provisions of Sections 16 to 21 of CPC

be attracted. However, the moment the “seat” is

determined, the courts wherein the seat is located would

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have exclusive jurisdiction for purposes of regulating

arbitral proceedings arising out of the agreement

between the parties15.

13. In Swastik Gases (supra), the arbitration clause

in question was clause 17 of the agreement. It was in the

following terms:

“17. Arbitration

If any dispute or difference(s) of any kind whatsoever shall arise between the parties hereto in connection with or arising out of this Agreement, the parties hereto shall in good faith negotiate with a view to arriving at an amicable resolution and settlement. In the event no settlement is reached within a period of 30 days from the date of arising of the dispute(s)/difference(s), such dispute(s)/difference(s) shall be referred to 2 (two) Arbitrators, appointed one each by the parties and the Arbitrators, so appointed shall be entitled to appoint a third Arbitrator who shall act as a presiding Arbitrator and the proceedings thereof shall be in accordance with the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof in force. The existence of any dispute(s)/difference(s) or initiation/continuation of arbitration proceedings shall not permit the parties to postpone or delay the performance of or to abstain from performing their obligations pursuant to this Agreement.”

Clause 18 of the agreement conferring jurisdiction

was in the following terms:

“18. Jurisdiction The agreement shall be subject to jurisdiction of the courts at Kolkata.”

15 Paragraph 19 of the judgment in Indus Mobile (supra)

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After considering various decisions, this Court held as

under:

“31. In the instant case, the appellant does not dispute that part of cause of action has arisen in Kolkata. What appellant says is that part of cause of action has also arisen in Jaipur and, therefore, Chief Justice of the Rajasthan High Court or the designate Judge has jurisdiction to consider the application made by the appellant for the appointment of an arbitrator under Section 11. Having regard to Section 11(12)(b) and Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there remains no doubt that the Chief Justice or the designate Judge of the Rajasthan High Court has jurisdiction in the matter. The question is, whether parties by virtue of clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur or, in other words, whether in view of clause 18 of the agreement, the jurisdiction of Chief Justice of the Rajasthan High Court has been excluded?

32. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like ‘alone’, ‘only’, ‘exclusive’ or “exclusive jurisdiction” have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties - by having Clause 18 in the agreement – is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended

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to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner.” (Emphasis supplied)

14. In Brahmani River Pellets Ltd. v. Kamachi

Industries Ltd16, this Court, after considering various

decisions including Swastik Gases (supra) and Indus

Mobile (supra), held:

“18. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter as 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.”

15. Following the decision of this Court in

Brahmani River Pellets (supra), in Activitas

Management (supra), this Court set aside the order of

the High Court of Punjab and Haryana appointing an

arbitrator in exercise of its power under Section 11 of the

1996 Act upon finding that clause 10 of the agreement

relating to the Governing Law had vested exclusive

jurisdiction to the courts located in Mumbai.

16 (2020) 5 SCC 462

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16. Clause 10 which was interpreted in Activitas

Management (supra) provided as under:

“10. Governing Law - This letter shall be governed by and construed in accordance with the Indian Law. Client hereby submits to the exclusive jurisdiction of the Mumbai High Courts located in Mumbai in connection with any dispute related to this letter or any of the matters contemplated hereby. In case any dispute arises between the parties with respect to the above-mentioned agreement, parties hereby agree to appoint sole arbitrator by consent of either party as per section 11 of Arbitration and Conciliation Act, 1996, and can amicably resolve the dispute as per the procedure laid down in Arbitration and Conciliation Act, 1996 before approaching appropriate court for the same.”

17. Interpreting the aforesaid clause, in Activitas

Management (supra) it was held:

“8. Though clause 10 does not use the expression ‘seat’ or ‘venue’, we are of the opinion that the ‘jurisdiction’ is mentioned in the context of resolution of the disputes through arbitration and as such the agreement between the parties that, “client hereby submits to the exclusive jurisdiction of the Mumbai High Courts located in Mumbai” must be understood in the context of arbitration and therefore the seat of the arbitration must be taken to be Mumbai.”

18. The aforesaid decisions make it clear that

parties, by agreement, can choose their own place for

arbitration and may confer exclusive jurisdiction upon

court(s) located at a particular place for the purpose of

regulating the arbitral proceedings arising out of the

agreement between the parties regardless of any part of

cause of action arising within its territorial jurisdiction.

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19. However, when an agreement specifies the place

of arbitration and simultaneously confers exclusive

jurisdiction on courts located at a place other than the

one specified for arbitration, a question would arise

whether the place of arbitration is just a “venue” or the

“juridical seat”.

20. In Arif Azim Company Limited (supra),

following an earlier three-Judge Bench judgment of this

Court in BGS SGS SOMA (supra), a three-Judge Bench

of this Court delineated the tests as to when “venue” can

be construed as “seat” of arbitration. The relevant

paragraphs of the judgment are extracted below:

“58. Thus, this court in BGS SJS SOMA laid down a three-condition test as to when “venue” can be construed as “seat” of arbitration. The conditions that are required to be fulfilled are as under: (i) The arbitration agreement or clause in question should designate or mention only one place; (ii) Such place must have anchored the arbitral proceedings i.e. the arbitral proceedings must have been fixed to that place alone without any scope of change; and (iii) There must be no other significant contrary indicia to show that the place designated is merely the venue and not the seat.

59. Where the aforesaid conditions are fulfilled, then the place that has been designated as “venue” can be construed as the “seat” of arbitration. It is clarified that, while applying the aforesaid test, it must be borne in mind that where a supranational body of rules has been stipulated in an arbitration agreement or clause, such stipulation is not to be regarded as a contrary indicium,

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such stipulation does not mean that no seat has been designated rather such stipulation is a positive indicia that the place so designated is actually the “seat”.”

21. In the present case, a plain reading of the

arbitration clause would indicate that Delhi is not the

only place specified for arbitration. Both Delhi and Goa

are mentioned as places for holding arbitration. Thus,

when we apply the tests laid down in BGS SGS SOMA

(supra), which have been affirmed in Arif Azim (supra),

the place specified i.e. venue for arbitral proceeding

would not automatically be the seat of arbitration. In

such a situation, the Governing Law clause i.e., Clause

38 of the Agreement would be helpful in determining the

juridical seat. Since Clause 38 of the Agreement confers

exclusive jurisdiction to the courts at Goa and Clause

32.5 provides that arbitration proceedings will be held in

Goa, it is clear that the parties have agreed that Goa

shall be the juridical seat, Delhi is just a venue.

22. The submission on behalf of the appellant that

the arbitration agreement is independent of the main

contract and, therefore, the arbitration clause would

alone determine the juridical seat, and not the

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Governing Law clause, cannot be countenanced for the

simple reason that the arbitration clause itself mentions

two places, namely, Delhi and Goa. Besides, in

Mankastu Impex (P) Ltd. v. Airvisual Ltd.17, this Court

held “that mere expression “place of arbitration” cannot

be the basis to determine the intention of the parties that

they have intended that place as the “seat” of arbitration.

The intention of the parties as to the “seat” should be

determined from other clauses in the agreement, including

the conduct of the parties.” Importantly, both Clauses

32.4 and 32.5 are part of Clause 32 of the Agreement

which deals with arbitration and dispute resolution.

According to Clause 32.4, location of the arbitration

shall be within Delhi; whereas Clause 32.5 states that

arbitration proceedings will be held in Goa. This creates

an impression of conflict between the two clauses.

However, when we construe them harmoniously, to

ensure that none becomes redundant, and read them in

conjunction with clause 38 of the Agreement, which

17 (2020) 5 SCC 399, paragraph 20

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vests exclusive jurisdiction on courts at Goa, it is clear

that the juridical seat is at Goa, Delhi is just a venue.

23. Now we shall consider the decisions cited by the

learned counsel for the respondent. In Sasan Power

(supra), this Court held that arbitration agreement is an

independent agreement, and the arbitration clause is

not the one that governs rights and obligations arising

out of the substantive contract rather it only governs the

way of settling disputes between the parties. It was also

held that parties can agree upon the governing law but

may not have any agreement for settlement of dispute

through arbitration. There can be no quarrel with the

aforesaid proposition. Here, the arbitration clause itself

mentions two places. One of those two has been chosen

by the parties for the courts located therein to have

exclusive jurisdiction. In such a situation, to determine

the juridical seat, the Governing law clause 38 cannot

be ignored. Similarly, in the Delhi High Court decision

in M/s. Cable Corporation of India (supra), the

arbitration clause specifies only a single place and not

two places as is there in the present case. The said

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decision is therefore distinguishable. In the other

decision of the Delhi High Court rendered in Sunil

Kumar Chandra (supra), which has been cited on

behalf of the respondent, the arbitration clause has not

been extracted in the judgment. However, from the

judgment, it appears that one of the clauses of the

agreement made it clear that Delhi was chosen as the

seat of arbitration, but it was not clear whether the other

place specified therein was for arbitration. This decision

too is, therefore, distinguishable. Besides, here the

arbitration clause itself specifies two places for

arbitration. The Constitution Bench decision of this

Court in Ramkishorelal (supra) is on the general

principle that to construe an instrument, an effort must

be there to ascertain the intention of the parties after

considering all words. We fail to understand as to how

this decision would be of any help to the respondent. In

Shree Bhowani Cotton Mills (supra), another decision

cited on behalf of the respondent, it was held that mere

conferment of exclusive jurisdiction on courts at

Calcutta to entertain and try suits in respect of any

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claims or disputes would not nullify the arbitration

agreement. In the present case, there is no issue about

the existence of an arbitration agreement and, further,

there is no dispute that the arbitration agreement itself

specifies two places, namely, Delhi and Goa; in such

circumstances, in our view, the juridical seat would have

to be ascertained by reading the Agreement in its

entirety so as to decipher the true intention of the

parties. The last judgment relied on behalf of the

respondent is one rendered by the Karnataka High Court

in M/s Lyrus Life Sciences (supra). The said decision

holds that where precise location of arbitration is

specified as Bengaluru, the argument that the cause of

action had arisen in the State of Himachal Pradesh

would not be relevant for the purposes of arbitration.

This decision is of no relevance to the present case

because the arbitration clause itself specifies both Delhi

and Goa for arbitration. Therefore, whether the juridical

seat is Delhi or Goa would have to be ascertained on the

basis of intention of the parties as could be evinced from

a holistic reading of various clauses of the Agreement.

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24. Upon reading the Agreement in its entirety, we

find that the juridical seat of arbitration was at Goa,

therefore, we are of the view that the Delhi High Court

lacked jurisdiction to entertain the application under

sub-section (6) of Section 11 of the 1996 Act.

Consequently, the appeal is allowed. The order passed

by the High Court is set aside. The parties would be at

liberty to take recourse to appropriate proceedings

before the jurisdictional High Court.

25. Pending application(s), if any, shall stand

disposed of.

.................................J. (MANOJ MISRA)

.................................J. (VIJAY BISHNOI)

New Delhi; October 12, 2026

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