BBR (INDIA) PRIVATE LIMITED versus S.P. SINGLA CONSTRUCTIONS PRIVATE LIMITED

Citation: [2022] 19 S.C.R. 977 · Decided: 18-05-2022 · Supreme Court of India · Bench: AJAY RASTOGI · Disposal: Dismissed

Cited by 1 judgment(s) · cites 6 · see the full citation network in Lexace

Judgment (excerpt)

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BBR (INDIA) PRIVATE LIMITED
v.
S.P. SINGLA CONSTRUCTIONS PRIVATE LIMITED
(Civil Appeal Nos. 4130-4131 of 2022)
MAY 18, 2022
[AJAY RASTOGI AND SANJIV KHANNA, JJ.]
Arbitration and Conciliation Act, 1996: s.20 – Place of
Arbitration – Whether conducting the arbitration proceedings at a
new place, owing to the appointment of a new arbitrator, would
shift the jurisdictional seat of arbitration – The place of conducting
the arbitration proceedings were shifted from Panchkula to Delhi
due to the change of arbitrator – Appellant argued that the
substantive proceedings were held in Delhi because of which it would
be the ‘seat of arbitration’ – Held: Sub-section (1) to s.20 gives
primacy to the agreement of the parties by which they are entitled to
fix and specify ‘the seat of arbitration’, which then, by operation
of law, determines the jurisdictional court that will, in the said case,
exercise territorial jurisdiction – Sub-section (2) comes into the
picture only when the parties have not agreed on the place of
arbitration as ‘the seat’ – In terms of sub-section (2) of s.20 the
arbitral tribunal determines the place of arbitration – The arbitral
tribunal, while doing so, can take into regard the circumstances of
the case, including the convenience of the parties – Sub-section (3)
of s.20 of the Act enables the arbitral tribunal, unless the parties
have agreed to the contrary, to meet at any place to conduct hearing
at a place of convenience in matters, such as consultation among
its members, for the recording of witnesses, experts or hearing
parties, inspection of documents, goods, or property – ‘The seat’
once fixed by the arbitral tribunal under s.20(2), should remain
static and fixed – Venue is not constant and stationary and can
move and change in terms of sub-section (3) to s.20 of the Act –
Change of venue does not result in change or relocation of the
‘seat of arbitration’.
Arbitration and Conciliation Act, 1996: s.42 – Jurisdiction –
Appellant relied on s.42 to contend that the seat of arbitration is in
Delhi – Held: s.42 is of no avail as it does not help the case
[2022] 19 S.C.R. 977
977
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SUPREME COURT REPORTS
[2022] 19 S.C.R.
propounded by the appellant, as in the present case the arbitrator
had fixed the jurisdictional ‘seat’ under s.20(2) of the Act before
any party had moved the court under the Act, being a court where
a part or whole of the cause of action had arisen.
Dismissing the appeals, the Court
HELD: 1.1 ‘The seat’ once fixed by the arbitral tribunal
under Section 20(2), should remain static and fixed, whereas the
‘venue’ of arbitration can change and move from ‘the seat’ to a
new location. [Para 25][993-B-C]
1.2 Sub-section (3) of Section 20 specifically states and draws
a distinction between the venue of arbitration and the ‘seat of
arbitration’ by stating that for convenience and other reasons,
the arbitration proceedings may be held at a place different than
the ‘seat of arbitration’, which location is referred to the venue
of arbitration. [Para 26][993-D-E]
1.3 The place or the venue fixed for arbitration proceedings,
when sub-section (2) of Section 20 applies, will be the jurisdictional
‘seat’ and the courts having jurisdiction over the jurisdictional
‘seat’ would have exclusive jurisdiction. This principle would
have exception that would apply when by mutual consent the
parties agree that the jurisdictional ‘seat’ should be changed,
and such consent must be express and clearly understood and
agreed by the parties. [Para 28][994-F-G]
1.4 Before the application under Section 34 was filed by
the Appellants, the jurisdictional ‘seat’ of arbitration had been
determined and fixed Under Sub-section (2) to Section 20 and
thereby, the courts having jurisdiction over Panchkula in Haryana,
have exclusive jurisdiction. The courts in Delhi would not get
jurisdiction as the jurisdictional ‘seat of arbitration is Panchkula
and not Delhi. [Para 32][997-C]
State of West Bengal v. Associated Contractors (2015)
1 SCC 32 : [2014] 10 SCR 426; Bhartiya Aluminium
Company v. Kaiser Aluminium Technical Services Inc.
(2012) 9 SCC 552 BGS SGS Soma JV v. NHPC Limited
(2020) 4 SCC 224 : [2019] 17 SCR 742 - relied on.
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979
Indus Mobile Distribution Private Limited v. Datawind
Innovations Private Limited and Ors. (2017) 7 SCC 678
: [2017] 4 SCR 744; Brahmani River Pellets Limited v.
Kamachi Industries Limited (2020) 5 SCC 462 : [2019]
9 SCR 1140; Union of India v. Hardy Exp

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