India – Choice Of A Venue In An Arbitration Agreement Is Also Choice Of The Arbitral Seat In Absence Of A Contrary Indication.

Order dated: 23 September 2021
 

Summary:
 

A dispute arose between the parties leading to invoking of the arbitration clause which provided for the proceedings to be conducted in accordance with the Rules of Arbitration of the International Centre for Alternative Dispute Resolution (“ICADR”), New Delhi and the venue of such arbitration to be Lucknow. The other party took a stand that the invocation of arbitration clause is untenable as there is no dispute between the parties. Accordingly, an application was filed before Delhi HC seeking appointment of the arbitrator.
 

The issue before the Delhi HC was whether the seat of arbitration shall be New Delhi as per ICADR or Lucknow as per the agreement. The Delhi HC held that if the arbitration agreement provides that arbitration proceedings “shall be held” at a particular venue, it would indicate that arbitration proceedings would be anchored at such venue, and therefore, the choice of venue is also the choice of the seat of arbitration. The HC reiterated that once the parties designate the seat of arbitration, only the courts governing the seat will have exclusive jurisdiction to govern such arbitration proceeding and jurisdiction of all other courts stand ousted. Accordingly, Delhi HC stated that the seat of arbitration will be determined according to the arbitration agreement between the parties i.e., Lucknow, and the ICADR will be applied only after the arbitration has begun before appropriate jurisdiction. Therefore, it was held that only the courts in Lucknow would have jurisdiction to appoint an arbitrator and Delhi HC had no jurisdiction to entertain the petition, which was dismissed with liberty to the parties to approach the Court at Lucknow.
 

al@acuitylaw.co.in