Exclusive Jurisdiction Clause Prevails Over Arbitrator's Procedural Order In Determining 'Seat' Of Arbitration: Delhi High Court

Brief Facts:

M/s Viva Infraventure Private Limited (“Petitioner”) was awarded the work related to Construction of 60 meter wide road from Sector 115, 112 Hindon, Pusta to Sector 1, Tech Zone – 4, Greater Noida, Bisrakh Road, Hindon Road, Noida (“Contract”) by New Okhla Industrial Development Authority (“Respondent”). Certain disputes arose under the Contract. Clause 32 of the Contract expressly provided that the courts at Gautam Budh Nagar, Uttar Pradesh shall have jurisdiction in matters arising under the Contract.

The Petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”) before the Allahabad High Court seeking appointment of an arbitrator. The Allahabad High Court appointed a Sole Arbitrator.

In the first procedural order, the Sole Arbitrator specified that the seat of arbitration would be 'New Delhi'. The mandate of the Sole Arbitrator expired during the arbitral proceedings. The Petitioner thus approached the Court seeking extension of the mandate of the Sole Arbitrator under Section 29A(5).

Issue:

Whether the determination of the seat of arbitration as New Delhi in the first procedural order by the Sole Arbitrator would override the choice of seat expressed in the exclusive jurisdiction clause present in the arbitration agreement?

Observations:

The Court held that where an arbitration agreement contains an 'exclusive jurisdiction clause' for the enforcement of the arbitration agreement, the place identified in the exclusive jurisdiction clause will be the 'seat' of arbitration, and the competent court(s) therein shall exercise supervisory jurisdiction. The court observed that when parties vest jurisdiction in a particular court for any dispute arising out of the arbitration clause, it must be presumed that they intended that place to be the 'seat' of arbitration as per Section 20(1) of the Act.

The court observed that the phrase 'Any suit or application for the enforcement of this arbitration clause shall be filed in the competent court at Gautam Budh Nagar, no other court or any other district or Pradesh or outside Uttar Pradesh shall have any jurisdiction in the matter' in Clause 32 of the Contract unequivocally reflected the intention of partis to confer exclusive jurisdiction solely on the courts at Gautam Budh Nagar 'for enforcement of the arbitration clause'.

The Court noted that although the arbitrator had fixed the seat as Delhi in the Procedural Order, the respondent had not consented to it. It noted that the respondent had already filed an application before the Arbitrator seeking clarification/review/modification of the Procedural Order to the limited extent that New Delhi is merely the venue.

The Court held that “the discretion of the arbitrator to fix the venue of arbitration can only be under section 20(3)”. The Sole Arbitrator cannot override the terms of the Contract without the express written consent of the parties. It therefore ruled that Delhi was only the 'venue' for hearings, not the juridical seat. Accordingly, it dismissed the petition owing to a lack of territorial jurisdiction.

Case Title: M/S Viva Infraventure Pvt. Ltd. vs. New Okhla Industrial Development Authority

Case Number: O.M.P.(MISC.)(COMM.) 606/2024

Counsel for the Petitioner: Mr. Suhail Dutt, Senior Advocate, along with Mr. Vikas Tiwari, Mr. Kumar Deepraj and Ms. Arushi Rathore, Advocates.

Counsel for the Respondent: Mr. Suvigya Awasthy, along with Mr. Vivek Joshi and Mr. Rohan Gulati, Advocates (PSL Advocates and Solicitors).

Date of Judgment: 01.07.2025