Mere Expression 'Place Of Arbitration' Is Not The Basis To Determine 'Seat Of Arbitration': SC [Read Judgment]

The Supreme Court has observed that mere expression "place of arbitration" cannot be the basis to determine the 'Seat of Arbitration'.

The bench of Justices R. Banumathi, AS Bopanna and Hrishikesh Roy observed that the intention of the parties as to the "seat" should be determined from other clauses in the agreement and the conduct of the parties. The court was concerned with a petition seeking appointment of an arbitrator.

The bench said that, in this even though the arbitration agreement entered into between the parties provides Hong Kong as the place of arbitration that by itself will not lead to the conclusion that parties have chosen Hong Kong as the seat of arbitration.

The seat of arbitration is a vital aspect of any arbitration proceedings. Significance of the seat of arbitration is that it determines the applicable law when deciding the arbitration proceedings and arbitration procedure as well as judicial review over the arbitration award. The situs is not just about where an institution is based or where the hearings will be held. But it is all about which court would have the supervisory power over the arbitration proceedings.

It is well-settled that "seat of arbitration" and "venue of arbitration" cannot be used inter-changeably. It has also been established 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 and the conduct of the parties

Referring to the other clauses, the bench said that. on a plain reading of the arbitration agreement, it is clear that the reference to Hong Kong as "place of arbitration" is not a simple reference as the "venue" for the arbitral proceedings; but a reference to Hong Kong is for final resolution by arbitration administered in Hong Kong.

The bench, taking note that the Section 11 has no application to "International Commercial Arbitrations" seated outside India, held that the petition filed by under Section 11(6) of the Act is not maintainable as the arbitration is seated at Hong Kong. 

Case name: MANKASTU IMPEX PRIVATE LIMITED vs. AIRVISUAL LIMITED
Case no.: ARBITRATION PETITION NO. 32 OF 2018
Coram: Justices R. Banumathi, AS Bopanna and Hrishikesh Roy 
Counsel: Adv Vikas Dutta and Sr. Adv Ritin Rai

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