Use Of The Word 'Seat' Is Not Compulsory In An Arbitration Clause: Delhi High Court

The bench of Justice Pratibha M. Singh held that there would be no seat and venue dichotomy when the jurisdiction conferred on other courts is made subject to the arbitration agreement. It held that in absence of any contrary Indicia, the referred place would be the seat of arbitration.

Facts

The parties entered into a Unit Buyer Agreement dated 17.10.2013 wherein the petitioner booked a flat in the Respondent's complex. Clause 17 of the agreement provided for resolution of dispute through arbitration.

A dispute arose between the parties, accordingly, the petitioner invoked arbitration vide a letter dated 26.08.2023. Upon the failure of the parties to mutually appoint the arbitrator, the petitioner filed an application under Section 11 of the A&C Act seeking appointment of the arbitrator.

Objections

The respondent objected to the maintainability of the petition on the following ground(s):

• The arbitration clause does not provide for a seat of arbitration, it merely designate New Delhi as the place where the arbitration proceedings would be held.
• Clause 17.3 of the agreement confers exclusive jurisdiction on the Courts at Noida, therefore, the petition is not maintainable.

Analysis by the Court

The Court observed that Clause 17.3 which confers exclusive jurisdiction on Courts at Noida is subject to the arbitration clause. Further, it expressly provides that recourse to Court would be taken only in matters not covered by arbitration.

The Court held that the use of word 'seat' in an arbitration clause is not compulsory to determine the jurisdiction of the Court(s) which would have jurisdiction over the proceedings arising out of the arbitration agreement.

The Court held that there would be no seat and venue dichotomy when the jurisdiction conferred on other courts is made subject to the arbitration agreement. It held that in absence of any contrary Indicia, the referred place would be the seat of arbitration.

Accordingly, the Court rejected the objection and appointed the arbitrator.

Case Title: Anju Jain v. M/s WTC Noida Development Company Pvt Ltd

Citation: 2024 LiveLaw (Del) 439

Date: 08.04.2024

Counsel for the Petitioner: Mr Manan Aggarwal & Ms Ananya Kumar, Advs

Counsel for the Respondent: Mr. Shunak Kashyap, Adv.

Click Here To Read/Download Order