Union of India v. M/s Jyoti Enterprises

Mr. V.K. Kaparuwan, Advocate for the petitioner/Union of India. Hon’ble Ravindra Maithani, J. (Oral) JUDGMENT The challenge in this petition is made to the order dated 17.01.2025, passed in Misc. Case No.115 of 2024, Union of India Vs. M/s Jyoti Enterprises, by the court of I Additional District Judge, Commercial Court, Haldwani, District Nainital. By it, it was held that the court has no jurisdiction to hear the petition under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”).

#2. Heard learned counsel for the petitioner and perused the record.

#3. The respondent responded to an online tender issued by the petitioner for the work of construction of Income Tax Building and Residential Quarters including internal sanitary installation, water supply and drainage at Kashipur, District Udham Singh Nagar. The respondent was the successful bidder. He was awarded the work. Some dispute arose and the matter was referred to the arbitration. The arbitration gave its award on 28.09.2024. An application under Section 34 of the Act was filed in the court of I Additional District Judge, Commercial Court, Haldwani. The court held that in the instant matter, the arbitrator, with the consent of both the parties, determined that Delhi NCR is the seat of arbitration. In view of it, the court, in the impugned order, held that that court has no 2 jurisdiction to hear the application under Section 34 of the Act. It is impugned.

#4. Learned counsel for the petitioner would submit that in the agreement, as such, no seat has been defined. Only place of arbitration has been given. Therefore, the application under Section 34 of the Act is maintainable in the court at Haldwani, because the part of cause of action has occurred within the local jurisdiction of the court.

#5. There is one clause in the agreement with regard to place of arbitration. It is clause no.25.7. It reads as follows:- “25.7 Place of Arbitration: The place of arbitration shall preferably be as mentioned in Schedule F. However, the Arbitral Tribunal may decide the place in consultation with both the parties.”

#6. A reading of the above clause makes it clear that the place of arbitration may be decided by the Arbitral Tribunal consultation with both the parties.

#7. In Para 7 of the award, the arbitrator records that the seat of arbitration is Delhi NCR. This Para 7 reads as follows:- “II Place of Arbitration: 7. During the preliminary hearing held on 18th Oct. 2022, with the consent of both the parties, it was decided that the place of Arbitration in terms of section 20 of the Arbitration and Conciliation Act, 1996 will be “”Delhi NCR”. The Seat of Arbitration is therefore “Delhi NCR”.”

#8. In the case of BGS SGS Soma JV Vs. NHPC Limited, (2020) 4 SCC 234, this aspect has been extensively examined by the Hon’ble Supreme Court, and the law has been settled in Para 18 of it, which reads as follows:- “82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the “venue” of the arbitration proceedings, the expression “arbitration proceedings” would make it clear that the “venue” is really the “seat” of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an 3 award at that place. This language has to be contrasted with language such as “tribunals are to meet or have witnesses, experts or the parties” where only hearings are to take place in the “venue”, which may lead to the conclusion, other things being equal, that the venue so stated is not the “seat” of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings “shall be held” at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a “venue” and not the “seat” of the arbitral proceedings, would then conclusively show that such a clause designates a In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that “the venue”, so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the “stated venue”, which then becomes the “seat” for the purposes of arbitration.” the arbitral proceedings. “seat” of

#9. In the instant case, the arbitrator has categorically, with the consent of both the parties, determined the seat of arbitration, and observed that it is Delhi NCR. In view of it, the court at Haldwani, has no jurisdiction to entertain the application under Section 34 of the Act. Accordingly, the impugned order does not warrant any interference. Therefore, the writ petition deserves to be dismissed at the stage of admission itself.

#10. The writ petition is dismissed in limine. Ravi Bisht (Ravindra Maithani, J.)

01.04.2025