SANSHIN CHEMICALS INDUSTRY versus ORIENTALS CARBONS AND CHEMICALS LTD. AND ORS.

Citation: [2001] 1 S.C.R. 1101 · Decided: 16-02-2001 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Dismissed

Judgment (excerpt)

SANSHIN CHEMICALS INDUSTRY 
v. 
ORIENTALS CARBONS AND CHEMICALS LTD. AND ORS. 
FEBRUARY 16, 2001 
[G.B. PATTANAIK, K.G. BALAKRISHNAN AND 
B.N. AGRAWAL, JJ.] 
Arbitration and Conciliation Act, I 996-Sections 20 & 34-Decision 
A 
B 
on the question of venue of arbitration-As agreed upon by parties under 
arbitration clause-Whether appealable-Held, no, since the decision is C 
neither an award not an-Interim award deciding legal rights of the parties 
under the contract. 
Appellant and respondent No. 1 entered into an agreement. Under Clause 
8.4 of the agreement it was agreed upon that if the parties were not able to 
designate a place of arbitration or were unable to agree thereon within 30 D 
days after the demand of arbitration was made, the same was to be determined 
by a Joint Arbitration Committee. 
Respondent No. 1 demanded arbitration. Since the parties did not agree 
upon the place of arbitration within 30 days of the demand of arbitration, the E 
Joint Arbitration Committee was formed. The Committee decided the venue 
for the sittings of the arbitral tribunal. 
The appellant filed an application before High Court against the order 
of the Committee, under Section 34 of the Arbitration and Conciliation Act. 
Single Judge dismissed the application, holding that the decision of Joint F 
Arbitration Committee, not being award, was not amenable to appeal under 
Section 34. Division Bench dismissed the appeal of the appellant. 
In appeal to this Court, the appellant contended that the decision of the 
Joint Arbitration Committee regarding the venue was an interim award 
amenable to appeal under Section 34, since the decision of the venue amounts G 
to vital right of a party as the rules and procedure applicable for resolving 
the dispute would depend on the decision of the venue; and if it is held that 
Section 34 is not applicable to the decision in question, the aggrieved party 
will be left remedyless. 
Dismissing the appeal, the Court 
1101 
H 
A 
1102 
SUPREME COURT REPORTS 
[2001] 1 S.C.R. 
HELD: I. The decision on the question of venue under Section 20 of 
the Arbitration and conciliation Act would not come within making of an 
arbitral award starting from Section 28 and on this view of the matter also, 
the said decision on the question of venue will not be either an award or an 
interim award so as to be appealable under Section 34 of the Act The decision 
B of the Joint Committee on the question of the venue under Clause 8.4 is not 
a decision, decidi_ng legal rights of the parties under the contract. There is 
no mutuality and the said Committee is merely a machinery for deciding the 
question of venue. Such a decision does not have the characteristics of an 
arbitration award nor even can it be held to be an interim award. The conclusion 
of the Joint Committee is a conclusion on the guidelines contained in second 
C part of Clause 8.4 of the agreement and is not a judicial determination and as 
such the said conclusion would not amount to an award. Ill 09-E-Ff 
Konkan Railway Corporation ltd. & Ors. v. Mehu/ Construction 
Company, 120001 7 SCC 201, relied on. 
D 
KK. Modi v. KN. Modi & Ors., ll998f 3 SCC 573, referred to. 
2. The ultimate arbitral award could be assailed on the grounds indicated 
in sub-section (2) of Section 34 and an erroneous decision on the question of 
venue, which ultimately affected the procedure that has been followed in the 
arbitral p,roceeding could come within the sweep of Section 34 (2) and as 
E such it cannot be said that an aggrieved party has no remedy at all.(1112-CI 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1309 of 
2001. 
From the Judgment and Order dated 8.8.2000 of the Delhi High Court 
F 
in F.A.O. (O.S.) No. 224 of2000. 
G 
Ashok H. Desai, A.K. Ganguli Gaurav Banerjee, D. Wadhwa and Dinesh 
Mathur, for Mis. J.B. Dadachanji and Co. for the Appellant. 
D.A. Dave, Ramesh Singh and Rajesh Kumar for the Respondents. 
The Judgment of the Court was delivered by 
PATTANAIK, J. Leave granted. 
This appeal by grant of special leave is directed against the judgment 
H of Delhi High Court dated 8th of August, 2000. The question for consideration 
SAN SHIN CHEM. INDUS.'" ORIENTAL CARBONS AND CHEM. LTD. [PATTANAIK, J.] 1103 
is whether a decision regarding the venue of the arbitration proceedings A 
could be assailed in appeal under Section 34 of the Arbitration and Conciliation 
Act, 1996, The Division Bench of the High Court by the impugned judgment 
agreed with the c

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