High Court · 2025

referred to "Act of 1996"), Hon'ble Mr. Justice Janardan Sahai (a retired Judge of this Court) was appointed as the sole Arbitrator.

5. It is urged that at the relevant time, the private respondent had also invoked the powers of the Court under Section 9 of the Act of 1996 which was filed before the District Judge, Saharanpur bearing Case No.127 of 2014. It is further submitted that while the said application under Section 9 of the Act of 1996 remained pending before the District Judge, Saharanpur, in the meantime, the arbitral Tribunal so constituted considered the claims and counter claims of 3 the parties and by means of its award dated 10.8.2016 dismissed both the claims and counter claims. It is further urged that this Award dated 10.8.2016 was not assailed by any of the parties and as such the same attained finality.

6. It is further pointed out that once again certain disputes cropped up and this time too, the private respondent once again invoked the arbitration clause by filing a petition before the High Court of Judicature at Allahabad in Arbitration application no.122/2017 wherein this Court at Allahabad appointed Hon'ble Mr. Justice S.U.Khan, a Retired Judge of this Court as Arbitrator. The arbitration proceedings before the Tribunal was held by the Arbitral Tribunal at Lucknow and a preliminary award dated 8.4.2020 was passed issuing interim directions. Later a final award on

24.9.2020 was passed.

7. The aforesaid two awards i.e. preliminary and final awards came to be challenged before the Commercial Court-I, at Lucknow by the petitioners. The Commercial Court-I at Lucknow on 2.11.2021 dismissed the application under Section 34 of the Act of 1996 against which an appeal was preferred before a 4 Division Bench of this Court in Appeal No.8/2021 ( Smt. Mukul Bahl and others Vs. Ranjan Mittal and another). The Division Bench of this Court of which one of us ( Jaspreet Singh,J) was a member vide order dated 18.9.2024 allowed the appeal and remanded the matter to the Commercial Court for deciding the same afresh in light of the applicable law.

8. After the matter was remanded by the Appellate Court, the present petitioners moved an application purporting to be under Order VII Rule 10 C.P.C raising the contention that the Commercial Court -I at Lucknow did not have the territorial jurisdiction to entertain the petition under Section 34 of the Act of 1996 and the same be placed before the appropriate court having jurisdiction in District Saharanpur.

9. The thrust of the submission of the learned counsel for the petitioners is that in light of the Section 42 of the Act of 1996, the proceedings are to be held in the court which first in point of time had entertained an application in respect of the arbitration agreement. It is further submitted that when the disputes had arisen for the first time, the private respondent had invoked the arbitration clause and even for an interim 5 measure, they had filed a petition under Section 9 of the Act of 1996 before the District Judge, Saharanpur coupled with the fact that their application under Section 11 (9) of the Act of 1996 was also moved before the High Court at Allahabad as the territorial jurisdiction relating to the matter of arbitration fell within the limits of Saharanpur which is outside the area of Oudh and for such matters, the High Court at Allahabad had territorial jurisdiction.

10. It is urged that Hon'ble Mr. Justice Janardan Sahai acting as the Arbitrator passed its award dated

10.8.2016 dismissing both the claims and counter claims at Saharanpur. No petition under Section 34 of the Act of 1996 or appeal was preferred against the award dated 10.8.2016, hence the proceedings came to rest at Saharanpur. This clearly indicates that the court at Saharanpur was the one who had first taken note of the proceedings hence in terms of Section 42, of the Act of 1996, all subsequent proceedings could only be cognizable before the court at Saharanpur and the court at Lucknow do not have the jurisdiction to entertain the petition under Section 34 of the Act of

1996. Accordingly, the order passed by the Commercial Court -I rejecting the application of the 6 petitioners under Order VII Rule 10 C.P.C. is against legal principles as well as against the intention of Section 42 of the Act of 1996. Thus for all the reasons, the impugned order is bad and deserves to be set aside.

11. Learned counsel for the petitioner in support of his submissions has drawn the attention of the court to a decision of Hon'ble the Supreme Court in the case of State of West Bengal Vs. Associated Contractors : AIR 2015 SC 260 as well as of Co-Ordinate Bench of this Court in Devi Dayal Trust and others Vs. Rajhans Towers Pvt. Ltd. 2024 (6) A.D.J. 28.

12. Learned counsel for the respondent while repelling the aforesaid submissions, has urged that from the bare perusal of Section 42 of the Act of 1996, it would indicate that it has no applicability in the instant case. It is urged that the premise upon which the learned counsel for the petitioner has advanced his submissions is patently fallacious. It is urged that Section 42 of the Act of 1996 operates in a different sphere and it is applicable in cases where there may be a chance of any contradictory orders being passed by two separate courts, hence in order to avoid such a situation, Section 42 has been en-grafted in the Act of 7

13. It is submitted that by referring to the petition preferred under Section 9 of the Act of 1996 before the District Judge, Saharanpur it really has no meaning inasmuch as that was in the first round of litigation and in the said proceedings, the claims and counter claims of the contesting parties were dismissed vide award dated 10.8.2016. Since admittedly none of the parties assailed the said award, consequently the proceedings came to an end at the said point of time.

14. It is at a later stage when fresh disputes arose, again, the arbitration clause was invoked and this Court at Allahabad had appointed Hon'ble Mr. Justice S.U.Khan as the sole Arbitrator. It is submitted that the petitioners never raised any objection regarding the jurisdiction of the Tribunal who held the entire arbitral proceedings at Lucknow. Consequently, after the preliminary award dated 8.4.2020 and the final award dated 1.12.2020 was passed, the same was challenged by the petitioners while invoking the jurisdiction of the Commercial Court-I at Lucknow. Upon dismissal of the said application, an appeal bearing no.8/20201 was 8 also filed before a Division Bench of this Court at Lucknow wherein the matter was remanded to the Commercial Court for decision afresh by means of the order dated 18.9.2024. Even before the appellate court, no such objection regarding territorial jurisdiction was raised and it is after the remand when the matter was being heard on merits on the application under Section 34 of the Act of 1996 that the petitioners moved an application under Order VII Rule 10 of C.P.C. seeking return of the petition under Section 34 of the Act of 1996 to be placed before the appropriate Court at Saharanpur.

15. It is also urged that it is not a case where the courts at Lucknow patently lack jurisdiction. Apparently, the courts at Lucknow had jurisdiction since the entire arbitral proceedings were held at Lucknow and the award was also made at Lucknow and the said award was put to challenge by the petitioners themselves before the Commercial Court at Lucknow, hence at this later stage, once the matter has been remanded from the High Court, the petitioners are precluded from taking the aforesaid objection. If at all, the petitioners had any reservation regarding the territorial jurisdiction, it was incumbent for them to 9 have raised it at the first given opportunity but in the instant case, it would reveal that the petitioners did not raise this issue either at the time of filing the objection under Section 34 before the Commercial Court. Even after the petition under Section 34 had been dismissed, this matter was escalated before the Division Bench of this Court in Section 37 of the Act of 1996 yet no such objection was raised and once the matter has been remanded, this objection has been raised which in terms of the principles enunciated in Section 21 of the C.P.C., the same cannot be countenanced apart from the fact that the petitioners have neither pleaded nor demonstrated any consequent failure of justice. Thus, for all the aforesaid reasons, the petition deserves to be dismissed as it is an endeavour to linger the petition under Section 34 of the Act of 1996 which is engaging the attention of the Commercial Court.

16. Learned counsel for the respondent has relied upon a decision of Division Bench of this Court in M/s Arya Rice Mill Vs. State of U.P. and others : 2025 A.H.C. 7981 DB.

17. The court has heard learned counsel for the parties and also perused the material available on 10 record.

18. At the outset it may be noticed that insofar as the facts are concerned, the parties are not at variance. The issue that arises for consideration is the fact whether in terms of Section 42 of the Act of 1996, the petition preferred by the petitioners under Section 34 of the Act of 1996 is liable to be returned to be filed before the appropriate court.

19. In order to appreciate the contentions of respective parties, it would be worthwhile to take note of certain undisputed facts : (i). A partnership deed was entered between the parties on 15.3.2012. The said partnership deed in Clause 17 contained an arbitration clause, however from the perusal of the said Partnership Deed, copy of which has been brought on record as Annexure No.A-2, it would indicate that there is no mention regarding any exclusive jurisdiction clause nor there is any reference to any 'seat' or 'venue' of the arbitration proceedings. (ii). At the first instance, when the disputes arose between the parties, a petition under 11 Section 9 of the Arbitration and Conciliation Act came to be filed before the District Judge at Saharanpur on 25.6.2014, it is also not disputed that the petition under Section 11(9) of the Act of 1996 was filed at Allahabad whereby Hon'ble Mr. Justice Janardan Sahai (a retired judge of this Court) was appointed as the sole Arbitrator by the High Court at Allahabad and the proceedings were held by the arbitral tribunal who made his award at Saharanpur on 10.8.2016. (iii). It is also not disputed that this award dated

10.8.2016 attained finality as none of the parties challenged the same either in proceedings under Section 34 of the Act of 1996 or before any other forum or Tribunal, whatsoever. (iv). It is also not disputed that the petition under Section 9 of the Arbitration and Conciliation Act which was filed before the District Judge, Saharanpur was dismissed on 15.11.2017. (v). Later, upon re-emergence of fresh disputes between the parties, once again a petition under Section 11 of the Act of 1996 was filed at Allahabad bearing no.122 of 2017 whereby this 12 Court at Allahabad vide order dated 31.5.2018 appointed Hon'ble Mr. Justice S.U.Khan, a retired judge of this Court as a sole Arbitrator. (vi). It is also not disputed that the said Tribunal vide its preliminary award dated 8.4.2020 and final award dated 1.12.2020 conducted the entire proceedings and made the award at Lucknow. (vii). It is also not disputed that the petitioners assailed the same by filing a petition under Section 34 of the Act of 1996 before the Commercial Court-I at Lucknow. (viii). It is an admitted position that initially the petition under Section 34 of the Act of 1996 came to be dismissed on 2.11.2021 which was assailed by the petitioners before the Division Bench of this Court at Lucknow wherein the appeal was allowed and the matter was remanded to the Commercial Court at Lucknow for reconsideration of the petition under Section 34 on merits.

20. In view of the aforesaid undisputed facts, this Court finds that it was the petitioners themselves who had filed the petition under Section 34 of the Act of 1996 before the Commercial Court at Lucknow. Thus, 13 in this context, the first petition filed by the petitioners at the relevant point of time was at Lucknow. Till such time, the appeal of the petitioners was allowed by a Division Bench of this Court and the matter was remanded, no objection was raised by the petitioners and only after the order of remand was passed by a Division Bench of this Court at Lucknow that the petitioners moved an application under Order VII Rule 10 C.P.C.

21. Before proceeding further, it would be worthwhile to take note of the decision of the Apex Court in the case of B.G.S. SGS SOMA IV Vs. NHPC LIMITED (2020) 4 SCC 234 where the issue of seat and the venue viz. a viz Section 42 of the Act of 1996 was considered and the Apex Court has held as under (paragraphs 59, 61, 81 and 82:- "59. Equally incorrect is the finding in Antrix Corpn. Ltd. [Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd., 2018 SCC OnLine Del 9338] that Section 42 of the Arbitration Act, 1996 would be rendered ineffective and useless. Section 42 is meant to avoid conflicts in jurisdiction of courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one court exclusively. This is why the section begins with a non obstante clause, and then goes on to state “…where with respect to an arbitration agreement any application under this part has been made in a court…” It is obvious that the application made under this part to a court must be a court which has jurisdiction to decide such application. The subsequent holdings of this court, that where a seat is designated in an agreement, the courts of 14 the seat alone have jurisdiction, would require that all applications under Part I be made only in the court where the seat is located, and that court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered ineffective or useless. Also, where it is found on the facts of a particular case that either no “seat” is designated by agreement, or the so-called “seat” is only a convenient “venue”, then there may be several courts where a part of the cause of action arises that may have jurisdiction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a case where parties have not agreed on the “seat” of arbitration, and before such “seat” may have been determined, on the facts of a particular case, by the Arbitral Tribunal under Section 20(2) of the Arbitration Act, 1996. In both these situations, the earliest application having been made to a court in which a part of the cause of action arises would then be the exclusive court under Section 42, which would have control over the arbitral proceedings. For all these reasons, the law stated by the Bombay and Delhi High Courts in this regard is incorrect and is overruled. XXXX XXXX XXXX

61. It will thus be seen that wherever there is an express designation of a “venue”, and no designation of any alternative place as the “seat”, combined with a supranational body of rules governing the arbitration, and no other significant contrary indicia, the inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding. XXXX XXXX XXXX

81. Most recently, in Brahmani River Pellets [Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., (2020) 5 SCC 462 : 2019 SCC OnLine SC 929 at para 15] , this Court in a domestic arbitration considered Clause 18 — which was the arbitration agreement between the parties — and which stated that arbitration shall be under Indian Arbitration and Conciliation Act, 1996, and the venue of arbitration shall be Bhubaneswar. After citing several judgments of this Court and then referring to Indus Mobile Distribution [Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678 : (2017) 3 SCC (Civ) 760] , the Court held : (Brahmani River Pellets case [Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., 15 (2020) 5 SCC 462 : 2019 SCC OnLine SC 929 at para 15] , SCC pp. 472-73, paras 18-19) “18. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the “venue” of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32 : (2013) 4 SCC (Civ) 157] , non-use of words like “exclusive jurisdiction”, “only”, “exclusive”, “alone” is not decisive and does not make any material difference.

19. When the parties have agreed to the have the “venue” of arbitration at Bhubaneshwar, the Madras High Court erred [Kamchi Industries Ltd. v. Brahmin River Pellets Ltd., 2018 SCC OnLine Mad 13127] in assuming the jurisdiction under Section 11(6) of the Act. Since only the Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order [Kamchi Industries Ltd. v. Brahmin River Pellets Ltd., 2018 SCC OnLine Mad 13127] is liable to be set aside.”

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 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 16 a “venue” and not the “seat” of the arbitral proceedings, would then conclusively show that such a clause designates a “seat” of the arbitral proceedings. 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."

22. The matter has been recently examined by the Apex Court in Arif Azeem Company Ltd. Vs. Micromax Informatics FZE : 2024 SCC Online SC 3212 wherein the Apex Court in context of an International Arbitration, was considering the issue of seat and venue and it held as under (paragraph 52 and 53 ): - "52. This Court in its decision in BGS SGS SOMA JV v. NHPC LTD., (2020) 4 SCC 234 held that wherever in the arbitration agreement there is designation of a place of arbitration as ‘venue’ of the ‘arbitral proceedings’, then such place effectively is the ‘seat’ of arbitration. This is because, the expression ‘arbitral proceedings’ does not refer to individual hearings but rather the whole arbitration process including the making of the award. It further held that where the parties have anchored the arbitral proceedings to one fixed location or place, it would indicate that the parties intended such place to be the seat of arbitration. It held that where the place designated as venue in the arbitration agreement is coupled with there being no other significant contrary indicia that such place is merely a venue, then such place would be construed as the ‘seat’ of the arbitral proceedings. This Court also added that the international context where a supranational body of rules is to govern the arbitration in or in the national context the laws of a particular country then this would further be an indicia that the ‘venue’ designated in the arbitration agreement is really the seat of arbitration. The relevant observations read as under:— 17 “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 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 “seat” of the arbitral proceedings. 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.” (Emphasis supplied)

53. Thus, this Court in BGS SGS SOMA (supra) laid down a three-condition test as to when ‘venue’ can be construed as ‘seat’ of arbitration. The conditions that are required to be fulfilled are as under:— i. The arbitration agreement or clause in question should designate or mention only one place; ii. Such place must have anchored the arbitral proceedings i.e., the arbitral proceedings must have been fixed to that place alone without any scope of change; 18 iii. There must be no other significant contrary indicia to show that the place designated is merely the venue and not the seat. Where the aforesaid conditions are fulfilled, then the place that has been designated as ‘venue’ can be construed as the ‘seat’ of arbitration. It is clarified that, while applying the aforesaid test, it must be borne in mind that where a supranational body of rules has been stipulated in an arbitration agreement or clause, such stipulation is not to be regarded as a contrary indicium, such stipulation does not mean that no seat has been designated rather such stipulation is a positive indicia that the place so designated is actually the ‘seat’."

23. Taking note of the aforesaid principles which have been laid down as a test to determine the issue of seat and venue including the jurisdiction, if applied to the facts of the instant case, it would reveal that even though the provisions of Section 42 of the Act of 1996 were applicable, but the fact remains that in the instant case arisen from the proceedings which was initiated subsequent to the disputes which resulted in the final award dated 10.8.2016 whereby both the claims and counter claims of the respective parties were dismissed by the sole arbitrator and the said award had attained finality.

24. In the second round which this Court is concerned with, the entire arbitral proceedings were conducted by the sole arbitrator at Lucknow and even while making his award dated 8.4.2020 it was mentioned by the sole Arbitrator in paragraph 29 of the preliminary award 19 that all the proceedings were held at Lucknow without any objection from any of the parties and none of the parties raised any objection regarding the procedure followed by the Arbitrator. After the preliminary award, the final award was made on 1.12.2020.

25. The record apparently indicates that the entire arbitral proceedings were held without demur at Lucknow. Admittedly, there is neither a reference to any forum of convenience by the parties in the Arbitration clause or in the partnership deed nor there is any reference to any exclusionary clause regarding jurisdiction of courts, and also there is no reference of any vesting of exclusive jurisdiction with any court or a clause relating to venue or seat.

26. In absence of any such exclusionary clause or vesting any one particular court with jurisdiction, it would reveal that the parties without demur participated in the proceedings held at Lucknow. The award was made by the Arbitrator at Lucknow and the petitioners themselves filed the proceedings under Section 34 at Lucknow, hence it can safely be inferred that the parties understood and agreed to have the seat arbitral proceedings at Lucknow. 20

27. Considering the aforesaid, this Court is of the clear view that the proceedings at Lucknow cannot be held to be without jurisdiction and the application under Order VII Rule 10 C.P.C. has been rightly rejected by the Commercial Court-I at Lucknow. Even otherwise the petitioners have not been able to demonstrate any consequent failure of justice whereas on the other hand, the petitioners themselves filed the first application under Section 34 of the Act of 1996 at Lucknow and thus as per Section 42 of the Act of 1996, the Court at Lucknow would have the jurisdiction.

28. It will also be relevant to notice that once the first set of proceedings came to an end by the award dated 10.8.2016 which as indicated in the preceding paragraphs was never challenged and it attained finality. Hence, the subsequent proceedings which were entirely separate and despite proceedings which culminated in preliminary award dated 8.4.2020 and final award dated 24.9.2020 were held at Lucknow, hence it cannot be said that the court at Lucknow did not have the jurisdiction or the petition under Section 34 had been filed before a wrong forum. 21

29. Since the proceedings in respect of the second round were exclusively held at Lucknow and challenged by the petitioners at Lucknow, hence in the instant case, the provisions of Section 42 cannot be pressed into service, given the factual situation, thus for all these aforesaid reasons, this Court does not find that there is any merit in the petition which is accordingly dismissed. Costs are made easy. Order Date :- 7.3.2025/Shukla

referred to "Act of 1996"), Hon'ble Mr. Justice Janardan Sahai (a retired Judge of this Court) was appointed as the sole Arbitrator.

5. It is urged that at the relevant time, the private respondent had also invoked the powers of the Court under Section 9 of the Act of 1996 which was filed before the District Judge, Saharanpur bearing Case No.127 of 2014. It is further submitted that while the said application under Section 9 of the Act of 1996 remained pending before the District Judge, Saharanpur, in the meantime, the arbitral Tribunal so constituted considered the claims and counter claims of 3 the parties and by means of its award dated 10.8.2016 dismissed both the claims and counter claims. It is further urged that this Award dated 10.8.2016 was not assailed by any of the parties and as such the same attained finality.

6. It is further pointed out that once again certain disputes cropped up and this time too, the private respondent once again invoked the arbitration clause by filing a petition before the High Court of Judicature at Allahabad in Arbitration application no.122/2017 wherein this Court at Allahabad appointed Hon'ble Mr. Justice S.U.Khan, a Retired Judge of this Court as Arbitrator. The arbitration proceedings before the Tribunal was held by the Arbitral Tribunal at Lucknow and a preliminary award dated 8.4.2020 was passed issuing interim directions. Later a final award on

24.9.2020 was passed.

7. The aforesaid two awards i.e. preliminary and final awards came to be challenged before the Commercial Court-I, at Lucknow by the petitioners. The Commercial Court-I at Lucknow on 2.11.2021 dismissed the application under Section 34 of the Act of 1996 against which an appeal was preferred before a 4 Division Bench of this Court in Appeal No.8/2021 ( Smt. Mukul Bahl and others Vs. Ranjan Mittal and another). The Division Bench of this Court of which one of us ( Jaspreet Singh,J) was a member vide order dated 18.9.2024 allowed the appeal and remanded the matter to the Commercial Court for deciding the same afresh in light of the applicable law.

8. After the matter was remanded by the Appellate Court, the present petitioners moved an application purporting to be under Order VII Rule 10 C.P.C raising the contention that the Commercial Court -I at Lucknow did not have the territorial jurisdiction to entertain the petition under Section 34 of the Act of 1996 and the same be placed before the appropriate court having jurisdiction in District Saharanpur.

9. The thrust of the submission of the learned counsel for the petitioners is that in light of the Section 42 of the Act of 1996, the proceedings are to be held in the court which first in point of time had entertained an application in respect of the arbitration agreement. It is further submitted that when the disputes had arisen for the first time, the private respondent had invoked the arbitration clause and even for an interim 5 measure, they had filed a petition under Section 9 of the Act of 1996 before the District Judge, Saharanpur coupled with the fact that their application under Section 11 (9) of the Act of 1996 was also moved before the High Court at Allahabad as the territorial jurisdiction relating to the matter of arbitration fell within the limits of Saharanpur which is outside the area of Oudh and for such matters, the High Court at Allahabad had territorial jurisdiction.

10. It is urged that Hon'ble Mr. Justice Janardan Sahai acting as the Arbitrator passed its award dated

10.8.2016 dismissing both the claims and counter claims at Saharanpur. No petition under Section 34 of the Act of 1996 or appeal was preferred against the award dated 10.8.2016, hence the proceedings came to rest at Saharanpur. This clearly indicates that the court at Saharanpur was the one who had first taken note of the proceedings hence in terms of Section 42, of the Act of 1996, all subsequent proceedings could only be cognizable before the court at Saharanpur and the court at Lucknow do not have the jurisdiction to entertain the petition under Section 34 of the Act of

1996. Accordingly, the order passed by the Commercial Court -I rejecting the application of the 6 petitioners under Order VII Rule 10 C.P.C. is against legal principles as well as against the intention of Section 42 of the Act of 1996. Thus for all the reasons, the impugned order is bad and deserves to be set aside.

11. Learned counsel for the petitioner in support of his submissions has drawn the attention of the court to a decision of Hon'ble the Supreme Court in the case of State of West Bengal Vs. Associated Contractors : AIR 2015 SC 260 as well as of Co-Ordinate Bench of this Court in Devi Dayal Trust and others Vs. Rajhans Towers Pvt. Ltd. 2024 (6) A.D.J. 28.

12. Learned counsel for the respondent while repelling the aforesaid submissions, has urged that from the bare perusal of Section 42 of the Act of 1996, it would indicate that it has no applicability in the instant case. It is urged that the premise upon which the learned counsel for the petitioner has advanced his submissions is patently fallacious. It is urged that Section 42 of the Act of 1996 operates in a different sphere and it is applicable in cases where there may be a chance of any contradictory orders being passed by two separate courts, hence in order to avoid such a situation, Section 42 has been en-grafted in the Act of 7

13. It is submitted that by referring to the petition preferred under Section 9 of the Act of 1996 before the District Judge, Saharanpur it really has no meaning inasmuch as that was in the first round of litigation and in the said proceedings, the claims and counter claims of the contesting parties were dismissed vide award dated 10.8.2016. Since admittedly none of the parties assailed the said award, consequently the proceedings came to an end at the said point of time.

14. It is at a later stage when fresh disputes arose, again, the arbitration clause was invoked and this Court at Allahabad had appointed Hon'ble Mr. Justice S.U.Khan as the sole Arbitrator. It is submitted that the petitioners never raised any objection regarding the jurisdiction of the Tribunal who held the entire arbitral proceedings at Lucknow. Consequently, after the preliminary award dated 8.4.2020 and the final award dated 1.12.2020 was passed, the same was challenged by the petitioners while invoking the jurisdiction of the Commercial Court-I at Lucknow. Upon dismissal of the said application, an appeal bearing no.8/20201 was 8 also filed before a Division Bench of this Court at Lucknow wherein the matter was remanded to the Commercial Court for decision afresh by means of the order dated 18.9.2024. Even before the appellate court, no such objection regarding territorial jurisdiction was raised and it is after the remand when the matter was being heard on merits on the application under Section 34 of the Act of 1996 that the petitioners moved an application under Order VII Rule 10 of C.P.C. seeking return of the petition under Section 34 of the Act of 1996 to be placed before the appropriate Court at Saharanpur.

15. It is also urged that it is not a case where the courts at Lucknow patently lack jurisdiction. Apparently, the courts at Lucknow had jurisdiction since the entire arbitral proceedings were held at Lucknow and the award was also made at Lucknow and the said award was put to challenge by the petitioners themselves before the Commercial Court at Lucknow, hence at this later stage, once the matter has been remanded from the High Court, the petitioners are precluded from taking the aforesaid objection. If at all, the petitioners had any reservation regarding the territorial jurisdiction, it was incumbent for them to 9 have raised it at the first given opportunity but in the instant case, it would reveal that the petitioners did not raise this issue either at the time of filing the objection under Section 34 before the Commercial Court. Even after the petition under Section 34 had been dismissed, this matter was escalated before the Division Bench of this Court in Section 37 of the Act of 1996 yet no such objection was raised and once the matter has been remanded, this objection has been raised which in terms of the principles enunciated in Section 21 of the C.P.C., the same cannot be countenanced apart from the fact that the petitioners have neither pleaded nor demonstrated any consequent failure of justice. Thus, for all the aforesaid reasons, the petition deserves to be dismissed as it is an endeavour to linger the petition under Section 34 of the Act of 1996 which is engaging the attention of the Commercial Court.

16. Learned counsel for the respondent has relied upon a decision of Division Bench of this Court in M/s Arya Rice Mill Vs. State of U.P. and others : 2025 A.H.C. 7981 DB.

17. The court has heard learned counsel for the parties and also perused the material available on 10 record.

18. At the outset it may be noticed that insofar as the facts are concerned, the parties are not at variance. The issue that arises for consideration is the fact whether in terms of Section 42 of the Act of 1996, the petition preferred by the petitioners under Section 34 of the Act of 1996 is liable to be returned to be filed before the appropriate court.

19. In order to appreciate the contentions of respective parties, it would be worthwhile to take note of certain undisputed facts : (i). A partnership deed was entered between the parties on 15.3.2012. The said partnership deed in Clause 17 contained an arbitration clause, however from the perusal of the said Partnership Deed, copy of which has been brought on record as Annexure No.A-2, it would indicate that there is no mention regarding any exclusive jurisdiction clause nor there is any reference to any 'seat' or 'venue' of the arbitration proceedings. (ii). At the first instance, when the disputes arose between the parties, a petition under 11 Section 9 of the Arbitration and Conciliation Act came to be filed before the District Judge at Saharanpur on 25.6.2014, it is also not disputed that the petition under Section 11(9) of the Act of 1996 was filed at Allahabad whereby Hon'ble Mr. Justice Janardan Sahai (a retired judge of this Court) was appointed as the sole Arbitrator by the High Court at Allahabad and the proceedings were held by the arbitral tribunal who made his award at Saharanpur on 10.8.2016. (iii). It is also not disputed that this award dated

10.8.2016 attained finality as none of the parties challenged the same either in proceedings under Section 34 of the Act of 1996 or before any other forum or Tribunal, whatsoever. (iv). It is also not disputed that the petition under Section 9 of the Arbitration and Conciliation Act which was filed before the District Judge, Saharanpur was dismissed on 15.11.2017. (v). Later, upon re-emergence of fresh disputes between the parties, once again a petition under Section 11 of the Act of 1996 was filed at Allahabad bearing no.122 of 2017 whereby this 12 Court at Allahabad vide order dated 31.5.2018 appointed Hon'ble Mr. Justice S.U.Khan, a retired judge of this Court as a sole Arbitrator. (vi). It is also not disputed that the said Tribunal vide its preliminary award dated 8.4.2020 and final award dated 1.12.2020 conducted the entire proceedings and made the award at Lucknow. (vii). It is also not disputed that the petitioners assailed the same by filing a petition under Section 34 of the Act of 1996 before the Commercial Court-I at Lucknow. (viii). It is an admitted position that initially the petition under Section 34 of the Act of 1996 came to be dismissed on 2.11.2021 which was assailed by the petitioners before the Division Bench of this Court at Lucknow wherein the appeal was allowed and the matter was remanded to the Commercial Court at Lucknow for reconsideration of the petition under Section 34 on merits.

20. In view of the aforesaid undisputed facts, this Court finds that it was the petitioners themselves who had filed the petition under Section 34 of the Act of 1996 before the Commercial Court at Lucknow. Thus, 13 in this context, the first petition filed by the petitioners at the relevant point of time was at Lucknow. Till such time, the appeal of the petitioners was allowed by a Division Bench of this Court and the matter was remanded, no objection was raised by the petitioners and only after the order of remand was passed by a Division Bench of this Court at Lucknow that the petitioners moved an application under Order VII Rule 10 C.P.C.

21. Before proceeding further, it would be worthwhile to take note of the decision of the Apex Court in the case of B.G.S. SGS SOMA IV Vs. NHPC LIMITED (2020) 4 SCC 234 where the issue of seat and the venue viz. a viz Section 42 of the Act of 1996 was considered and the Apex Court has held as under (paragraphs 59, 61, 81 and 82:- "59. Equally incorrect is the finding in Antrix Corpn. Ltd. [Antrix Corpn. Ltd. v. Devas Multimedia (P) Ltd., 2018 SCC OnLine Del 9338] that Section 42 of the Arbitration Act, 1996 would be rendered ineffective and useless. Section 42 is meant to avoid conflicts in jurisdiction of courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one court exclusively. This is why the section begins with a non obstante clause, and then goes on to state “…where with respect to an arbitration agreement any application under this part has been made in a court…” It is obvious that the application made under this part to a court must be a court which has jurisdiction to decide such application. The subsequent holdings of this court, that where a seat is designated in an agreement, the courts of 14 the seat alone have jurisdiction, would require that all applications under Part I be made only in the court where the seat is located, and that court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered ineffective or useless. Also, where it is found on the facts of a particular case that either no “seat” is designated by agreement, or the so-called “seat” is only a convenient “venue”, then there may be several courts where a part of the cause of action arises that may have jurisdiction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a case where parties have not agreed on the “seat” of arbitration, and before such “seat” may have been determined, on the facts of a particular case, by the Arbitral Tribunal under Section 20(2) of the Arbitration Act, 1996. In both these situations, the earliest application having been made to a court in which a part of the cause of action arises would then be the exclusive court under Section 42, which would have control over the arbitral proceedings. For all these reasons, the law stated by the Bombay and Delhi High Courts in this regard is incorrect and is overruled. XXXX XXXX XXXX

61. It will thus be seen that wherever there is an express designation of a “venue”, and no designation of any alternative place as the “seat”, combined with a supranational body of rules governing the arbitration, and no other significant contrary indicia, the inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding. XXXX XXXX XXXX

81. Most recently, in Brahmani River Pellets [Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., (2020) 5 SCC 462 : 2019 SCC OnLine SC 929 at para 15] , this Court in a domestic arbitration considered Clause 18 — which was the arbitration agreement between the parties — and which stated that arbitration shall be under Indian Arbitration and Conciliation Act, 1996, and the venue of arbitration shall be Bhubaneswar. After citing several judgments of this Court and then referring to Indus Mobile Distribution [Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678 : (2017) 3 SCC (Civ) 760] , the Court held : (Brahmani River Pellets case [Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., 15 (2020) 5 SCC 462 : 2019 SCC OnLine SC 929 at para 15] , SCC pp. 472-73, paras 18-19) “18. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the “venue” of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32 : (2013) 4 SCC (Civ) 157] , non-use of words like “exclusive jurisdiction”, “only”, “exclusive”, “alone” is not decisive and does not make any material difference.

19. When the parties have agreed to the have the “venue” of arbitration at Bhubaneshwar, the Madras High Court erred [Kamchi Industries Ltd. v. Brahmin River Pellets Ltd., 2018 SCC OnLine Mad 13127] in assuming the jurisdiction under Section 11(6) of the Act. Since only the Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order [Kamchi Industries Ltd. v. Brahmin River Pellets Ltd., 2018 SCC OnLine Mad 13127] is liable to be set aside.”

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 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 16 a “venue” and not the “seat” of the arbitral proceedings, would then conclusively show that such a clause designates a “seat” of the arbitral proceedings. 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."

22. The matter has been recently examined by the Apex Court in Arif Azeem Company Ltd. Vs. Micromax Informatics FZE : 2024 SCC Online SC 3212 wherein the Apex Court in context of an International Arbitration, was considering the issue of seat and venue and it held as under (paragraph 52 and 53 ): - "52. This Court in its decision in BGS SGS SOMA JV v. NHPC LTD., (2020) 4 SCC 234 held that wherever in the arbitration agreement there is designation of a place of arbitration as ‘venue’ of the ‘arbitral proceedings’, then such place effectively is the ‘seat’ of arbitration. This is because, the expression ‘arbitral proceedings’ does not refer to individual hearings but rather the whole arbitration process including the making of the award. It further held that where the parties have anchored the arbitral proceedings to one fixed location or place, it would indicate that the parties intended such place to be the seat of arbitration. It held that where the place designated as venue in the arbitration agreement is coupled with there being no other significant contrary indicia that such place is merely a venue, then such place would be construed as the ‘seat’ of the arbitral proceedings. This Court also added that the international context where a supranational body of rules is to govern the arbitration in or in the national context the laws of a particular country then this would further be an indicia that the ‘venue’ designated in the arbitration agreement is really the seat of arbitration. The relevant observations read as under:— 17 “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 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 “seat” of the arbitral proceedings. 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.” (Emphasis supplied)

53. Thus, this Court in BGS SGS SOMA (supra) laid down a three-condition test as to when ‘venue’ can be construed as ‘seat’ of arbitration. The conditions that are required to be fulfilled are as under:— i. The arbitration agreement or clause in question should designate or mention only one place; ii. Such place must have anchored the arbitral proceedings i.e., the arbitral proceedings must have been fixed to that place alone without any scope of change; 18 iii. There must be no other significant contrary indicia to show that the place designated is merely the venue and not the seat. Where the aforesaid conditions are fulfilled, then the place that has been designated as ‘venue’ can be construed as the ‘seat’ of arbitration. It is clarified that, while applying the aforesaid test, it must be borne in mind that where a supranational body of rules has been stipulated in an arbitration agreement or clause, such stipulation is not to be regarded as a contrary indicium, such stipulation does not mean that no seat has been designated rather such stipulation is a positive indicia that the place so designated is actually the ‘seat’."

23. Taking note of the aforesaid principles which have been laid down as a test to determine the issue of seat and venue including the jurisdiction, if applied to the facts of the instant case, it would reveal that even though the provisions of Section 42 of the Act of 1996 were applicable, but the fact remains that in the instant case arisen from the proceedings which was initiated subsequent to the disputes which resulted in the final award dated 10.8.2016 whereby both the claims and counter claims of the respective parties were dismissed by the sole arbitrator and the said award had attained finality.

24. In the second round which this Court is concerned with, the entire arbitral proceedings were conducted by the sole arbitrator at Lucknow and even while making his award dated 8.4.2020 it was mentioned by the sole Arbitrator in paragraph 29 of the preliminary award 19 that all the proceedings were held at Lucknow without any objection from any of the parties and none of the parties raised any objection regarding the procedure followed by the Arbitrator. After the preliminary award, the final award was made on 1.12.2020.

25. The record apparently indicates that the entire arbitral proceedings were held without demur at Lucknow. Admittedly, there is neither a reference to any forum of convenience by the parties in the Arbitration clause or in the partnership deed nor there is any reference to any exclusionary clause regarding jurisdiction of courts, and also there is no reference of any vesting of exclusive jurisdiction with any court or a clause relating to venue or seat.

26. In absence of any such exclusionary clause or vesting any one particular court with jurisdiction, it would reveal that the parties without demur participated in the proceedings held at Lucknow. The award was made by the Arbitrator at Lucknow and the petitioners themselves filed the proceedings under Section 34 at Lucknow, hence it can safely be inferred that the parties understood and agreed to have the seat arbitral proceedings at Lucknow. 20

27. Considering the aforesaid, this Court is of the clear view that the proceedings at Lucknow cannot be held to be without jurisdiction and the application under Order VII Rule 10 C.P.C. has been rightly rejected by the Commercial Court-I at Lucknow. Even otherwise the petitioners have not been able to demonstrate any consequent failure of justice whereas on the other hand, the petitioners themselves filed the first application under Section 34 of the Act of 1996 at Lucknow and thus as per Section 42 of the Act of 1996, the Court at Lucknow would have the jurisdiction.

28. It will also be relevant to notice that once the first set of proceedings came to an end by the award dated 10.8.2016 which as indicated in the preceding paragraphs was never challenged and it attained finality. Hence, the subsequent proceedings which were entirely separate and despite proceedings which culminated in preliminary award dated 8.4.2020 and final award dated 24.9.2020 were held at Lucknow, hence it cannot be said that the court at Lucknow did not have the jurisdiction or the petition under Section 34 had been filed before a wrong forum. 21

29. Since the proceedings in respect of the second round were exclusively held at Lucknow and challenged by the petitioners at Lucknow, hence in the instant case, the provisions of Section 42 cannot be pressed into service, given the factual situation, thus for all these aforesaid reasons, this Court does not find that there is any merit in the petition which is accordingly dismissed. Costs are made easy. Order Date :- 7.3.2025/Shukla