Where Arbitration Seat Is Fixed, Only Such Court Shall Have Exclusive Jurisdiction To Entertain Application Under Section 11 Of Arbitration Act: Delhi High Court

Brief Facts:

The present petitions have been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator to adjudicate the disputes between the parties. The petitioner has invoked the jurisdiction of this court for the appointment of a sole arbitrator following the service of notice under Section 21 of the Arbitration and Conciliation Act.

The matter pertained to builder-buyer agreements which contained an arbitration clause in clause 21. This clause stipulates that any disputes arising out of or related to the agreement shall be settled amicably by mutual discussion, failing which they shall be resolved through arbitration governed by the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The arbitration proceedings are to be conducted by a sole arbitrator appointed by the company, with the location of the proceedings specified as Noida/Delhi and jurisdiction confined exclusively to the courts at Noida. The Petitioner approached the Delhi High Court (“High Court”) and filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) for the appointment of an arbitrator.

The Respondent contended that, based on the arbitration clause, the courts at Noida have exclusive jurisdiction over matters arising from the agreement. The specific language of the clause emphasizes that the courts at Noida have exclusive jurisdiction, which the Respondent argued precluded the High Court from adjudicating the petition for the appointment of an arbitrator.

Observations by the High Court:

Referring to the arbitration clause, the High Court held that while the arbitration proceedings could be held at Noida or Delhi, the courts at Noida were explicitly granted exclusive jurisdiction over all matters arising from or related to the agreements, irrespective of where the agreements were executed.

The High Court emphasized that the property in question was located in Noida, and the builder-buyer agreements were also executed in Noida. The High Court referred to its decision CVS Insurance and Investments v. Vipul IT Infrasoft Pvt. Ltd., which dealt with a similar jurisdictional clause. In that case, the arbitration clause specified Noida/New Delhi as the venue for arbitration but granted exclusive jurisdiction to the courts in Noida for any related legal matters.

The High Court held that the designation of a single arbitration seat confers exclusive jurisdiction to the corresponding court, while venues might vary for convenience. It held that the seat of arbitration determines the jurisdiction under Sections 20(1) and 20(2) of the Arbitration Act, with venue pertaining to convenience under Section 20(3).

Therefore, the High Court held that the jurisdictional clause unequivocally mandated Noida's courts' exclusive jurisdiction. Consequently, it dismissed the petition.

Case Title: Abhimanyu Through Special Power Of Attorney Holder Vs Parmesh Construction Co. Ltd

Citation: 2024 LiveLaw (Del) 656

Case Number: ARB.P. 322/2024

Advocate for the Petitioner: Mr. Anil Kumar

Advocate for the Respondent: Mr. Govind Keshav

Click Here To Read/Download Order or Judgment