Court At Designated Venue In Arbitration Agreement Can Entertain Application U/S 11 Of Arbitration Act: Bombay High Court

Brief Facts:

The present application under section 9 of the Arbitration Act has been filed seeking various interlocutory reliefs in connection with disputes and differences said to have arisen between Keller Ground Engineering India Private Limited, the Petitioner (“Keller”) on the one hand, and Arcon Powerinfra India Pvt. Ltd., Respondent No.1 and Chhabra's Associates, Respondent No. 2 (“Respondents”).

Another application under section 11 of the Arbitration Act has also been filed seeking appointment of the Arbitrator.

Indian Oil gave a work order to Respondent No.2, and Respondent No.2 sub-contracted it with Keller. Thereafter, the parties agreed that Respondent No.2 would commission the work to Respondent No.1, which would then sub-contract it to Keller – all for the very same work.

Another Work Order pertaining to the very same work and activity was subsequently executed between Respondent No. 1 and Keller on November 15, 2019.

Contentions:

Respondent No.1 submitted that nothing in the activity envisaged in the Work Orders has been carried out in the State of Maharashtra. Merely because the arbitration clause refers to Mumbai as the venue of arbitration,it would not follow that this Court has jurisdiction to exercise powers under Section 11 of the Arbitration Act.

It was also argued that Respondent No.1 is not located in Mumbai and therefore, no part of the cause of action claimed against the Respondent has arisen in Mumbai. Consequently, this Court will not have jurisdiction under Section 11 of the Arbitration Act.

Respondent No.2 submitted that Respondent No. 2 is not privy to the arbitration agreement in the work order which was executed on November 15, 2019. All work was carried out for Respondent No. 1 under its work order with Keller and no work was carried out under any Word Order signed by Respondent No. 2.

Observations:

The court rejected the submission that the court does not have territorial jurisdiction to entertain the present application under section 11 of the Arbitration Act on the ground that the parties have chosen consciously in their agreement that the venue for the arbitration proceedings shall be Mumbai.

It also observed that whether the document executed is a valid document is a matter to be decided by the Arbitrator and not by the court under section 11 of the Arbitration Act. Furthermore, whether the work that has been carried out is with respect to one work or both requires adjudication on merits which can be decided by the Arbitrator.

The Supreme Court in Ravi Ranjan Developers (P) Ltd. Vs. Aditya Kumar Chatterjee, 2022 held that an application under section 11 of the Arbitration Act has to be made only before the High Court but that does not mean that such an application can be filed before any High Court which does not even have territorial jurisdiction. Section 11 should be read harmoniously with section 2(1)(e) of the Arbitration Act and the application under section 11 should be filed before the High Court which has supervisory jurisdiction over the court which has jurisdiction to decide the issue.

The court said that the above judgment would not aid the respondent as the decision was rendered on the premise that in the absence of any designated seat in the arbitration agreement, the court first approached for seeking relief would have jurisdiction to entertain further applications arising out of such arbitration in view of section 42 of the Arbitration Act.

However, in the present case, the court noted that in the work orders, mumbai has been designated as venue for the arbitration proceedings therefore in view of the Supreme Court judgment in BGS SGS SOMA JV Vs. NHPC, (2020) the designated venue shall become the seat of the arbitration proceedings in absence of any contrary indicia indicating that the seat of the arbitration proceedings was at a different place. Additionally, any other court has also not been approached in the facts of the present case.

The court concluded that “each arbitration agreement stipulates Mumbai as the agreed venue of arbitration. Neither is any other indicia present to displace Mumbai as the seat of arbitration, nor has any other court been approached for relief under Section 9, to press Section 42 into service to displace the jurisdiction of this Court under Section 11.”

Accordingly, the present petition was allowed.

Case Number: Keller Ground Engineering India Private Limited Versus Archon Powerinfra India Pvt. Ltd. & Ors.

Citation: 2025 LiveLaw (Bom) 62

Mr. Shyam Kapadia a/w. Ravitej Chilumuri, Aishwarya Singh, Kanika Sharma i/b. Khaitan & Co., Advocate for Petitioner.

Mr. Abhileen Chaturvedi a/w. Mr. Mohit Prabhu, Mr. Sayyad Saqib Ali & Mr. Sparsh Khosia i/b. Cyril Amarchand Mangaldas, Advocate for Respondent No.1.

Mr. Mahalakshmi Ganapathy a/w. Rahul Dhawan, Tanmay Bhave & Apoorv Bansal, Advocates for Respondent No.2.

Mr. Chirag Modi, Counsel a/w. Mr. Sunil Gangan i/b. RMG Law Associates, Advocates for Respondent No.3.