Dispute over arbitral seat ends with clear message — exclusive jurisdiction clauses rule the game.

Whether the Delhi High Court has territorial jurisdiction to entertain a petition under Section 29A(5) of the Arbitration and Conciliation Act, 1996, for extension of the mandate of the arbitrator, when the contract contains an exclusive jurisdiction clause in favor of Gautam Budh Nagar courts, but the arbitrator’s procedural order fixed Delhi as the seat of arbitration.

In this case , Viva Infraventure Pvt. Ltd. (Petitioner) and New Okhla Industrial Development Authority (Respondent) entered into a contract for construction of a 60m wide road in Noida, awarded in 2015. The contract included:

• Arbitration Clause (Clause 34): Disputes to be referred to a sole arbitrator appointed by the CEO.
• Jurisdiction Clause (Clause 32): All suits/applications for enforcement of the arbitration clause to be filed only in the competent court at Gautam Budh Nagar, Uttar Pradesh.

Arbitration initiated; Allahabad High Court appointed Justice G.S. Singhvi (Retd.) as sole arbitrator.Arbitrator, by order dated 15.10.2022, fixed Delhi as the seat of arbitration for procedural convenience.The arbitrator’s mandate expired; petitioner sought extension under Section 29A(5) before the Delhi High Court. Respondents Argued that only Gautam Budh Nagar courts have jurisdiction due to the exclusive jurisdiction clause.

Principles Laid Down in this judgement:

1. Party Autonomy and Seat of Arbitration:
   • Parties are free to agree on the place (seat) of arbitration, which determines the court with supervisory jurisdiction.
   • If parties do not agree, the arbitral tribunal may determine the seat, but only within the scope allowed by the contract.
2. Exclusive Jurisdiction Clause vs. Seat of Arbitration:
   • If a contract contains an exclusive jurisdiction clause specifying a particular court for all arbitration-related matters, that clause prevails—even if the arbitrator later fixes a different seat for convenience.
   • The seat of arbitration generally confers exclusive jurisdiction on the courts of that place, but this is subject to any contrary agreement between the parties.
3. Procedural Orders and Consent:
   • A procedural order by the arbitrator fixing the seat/venue does not override an explicit exclusive jurisdiction clause unless there is clear, mutual consent of both parties to change the seat.
4. Judicial Precedents:
   • The court relied on Supreme Court and Delhi High Court decisions (e.g., BGS SGS Soma, Mankastu Impex, Precitech Enclosures) which clarify that an exclusive jurisdiction clause covering arbitration matters must be given full effect, even if the seat is fixed elsewhere by the arbitrator.

The Delhi High Court dismissed the petition for lack of territorial jurisdiction.

• The Court held that:
  • The contract’s exclusive jurisdiction clause (Clause 32) clearly stated that only courts at Gautam Budh Nagar, Uttar Pradesh, have jurisdiction over all arbitration-related matters.
  • The arbitrator’s procedural order fixing Delhi as the seat was for convenience and did not have the effect of changing the exclusive jurisdiction agreed upon in the contract.
  • The parties’ autonomy and their explicit agreement in the contract must be respected. Allowing the seat fixed by the arbitrator to override the exclusive jurisdiction clause would amount to rewriting the contract, which is not permissible.
  • Therefore, any application for extension of the arbitrator’s mandate under Section 29A(5) must be filed before the competent court at Gautam Budh Nagar, not in Delhi.

Even if the arbitrator holds hearings or passes orders in Delhi, the courts at Gautam Budh Nagar alone have the authority to supervise and intervene in the arbitration, as per the parties’ contract. The Delhi High Court cannot entertain such petitions due to the clear and exclusive jurisdiction clause in favor of Gautam Budh Nagar

Read the full judgement here:

ms-viva-infraventure-private-limited-v-new-okhla-industrial-development-authority-607995.pdf