Use Of Word ‘Seat’ Not Compulsory In Arbitration Agreement; Should Decipher It From Intention Of Parties: Delhi HC
The Delhi High Court observed that the use of the word ‘seat’ is not compulsory in an arbitration agreement to determine the jurisdiction in arbitration proceedings.
The Court clarified that the agreement between the parties clearly outlined the resolution of legal disputes through arbitration, as specified in the agreement's arbitration clause. The arbitration clause explicitly stated that arbitration proceedings would take place in New Delhi.
Therefore, the “seat and venue dichotomy” had no applicability as per the Court.
A Single Bench of Justice Prathiba M. Singh observed, “Insofar as arbitration is concerned, clearly, the seat is in New Delhi. The use of the word ‘seat’ is not compulsory in a particular clause, the Court has to decipher the intention of the parties. The Respondent has its registered office in Delhi. Further, the said Agreement has been executed in Delhi, both the parties are located within the territorial jurisdiction of this Court. Therefore, there is no impediment in appointing an arbitrator in the present matter.”
Advocate Manan Aggarwal represented the petitioners, while Advocate Shunak Kashyap appeared for the respondent.
A Unit Buyer Agreement was executed between the parties for a flat in Noida. The petitioners had sought relief under Section 11 of the Arbitration and Conciliation Act, 1996, alleging non-payment of rent.
M/s. WTC NOIDA Development (Company) raised an objection related to territorial jurisdiction arguing that the said petition was not maintainable since the seat of arbitration was in Noida, and not Delhi.
“Clearly in the arbitration clause, the arbitration proceedings are to be held at Delhi. The seat and venue dichotomy, which is sought to be raised in the present case, has no applicability,” the Court clarified.
The Court further clarified that “if the matter is not to be referred to arbitration, or if there are other disputes which have to be entertained by Civil Courts and other Tribunals, then courts in Noida- i.e. Gautam Budh Nagar, would have the exclusive jurisdiction.”
Consequently, the Court appointed a sole arbitrator and directed for the arbitration proceedings to take place under the Delhi International Arbitration Centre.
Accordingly, the High Court disposed of the petition.
Cause Title: Anju Jain & Anr. v. M/S. WTC Noida Development Company Private Limited (Neutral Citation: 2024:DHC:2849)
Appearance:
Petitioners: Advocates Manan Aggarwal and Ananya Kumar
Respondent: Advocate Shunak Kashyap