SEAR FOR ARBITRATION: The fact that in all the three appeals before us the proceedings were finally held at New Delhi, and the awards were signed in New Delhi, and not at Faridabad, would lead to the conclusion that both parties have chosen New Delhi as the “seat” of arbitration under Section 20(1) of the Arbitration Act, 1996. This being the case, both parties have, therefore, chosen that the Courts at New Delhi alone would have exclusive jurisdiction over the arbitral proceedings. Therefore, the fact that a part of the cause of action may have arisen at Faridabad would not be relevant once the “seat” has been chosen, which would then amount to an exclusive jurisdiction clause so far as Courts of the “seat” are concerned.
SUPREME COURT OF INDIA
BGS SGS SOMA JV Vs. NHPC Ltd.
[Civil Appeal No. 9307 of 2019 arising out SLP (Civil) No. 25618 of 2018]
[Civil Appeal No. 9308 of 2019 arising out SLP (Civil) No. 25848 of 2018]
[Civil Appeal No. 9309 of 2019 arising out SLP (Civil) No. 28062 of 2018]
ACT: Section 37 of the Arbitration and Conciliation Act, 1996 and Section 13(1) of the Commercial Courts Act, UNCITRAL Arbitration Rules.
A Civil Court examining the validity of an arbitral award under Section 34 of the Act exercises supervisory and not appellate jurisdiction over the awards of an arbitral tribunal. A court can set aside an arbitral award, only if any of the grounds mentioned in Sections 34(2)(a)(i) to (v) or Section 34(2)(b)(i) and (ii), or Section 28(1)(a) or 28(3) read with Section 34(2)(b)(ii) of the Act, are made out. An award adjudicating claims which are `excepted matters’ excluded from the scope of arbitration, would violate Section 34(2)(a)(iv) and 34(2)(b) of the Act. Making an award allowing or granting a claim, contrary to any provision of the contract, would violate Section 34(2)(b)(ii) read with Section 28(3) of the Act.[J.G. Engineers Pvt. Ltd. Versus Union of India and Another AIR 2011 SC 2477 : JT 2011 (5) SC 380 : (2011) 5 SCALE 46 : (2011) 5 SCC 758]
Supreme court in the case of Union of India v. BESCO Ltd. [Civil Appeal
No.4483 of 2017], while examining the issue as to whether the Chief Justice of a
High Court or any person or institution designated by him, while exercising power
under Section 11(6) of the Arbitration and Conciliation Act, 1996 is bound to
nominate an arbitrator as specified in the agreement for arbitration, it was held that
“though an arbitrator is specified in the agreement for arbitration, if circumstances so
warrant, the Chief Justice or the designated Judge is free to appoint an independent
arbitrator, having due regard to the qualification, if any, and other aspects as
required under Section 11(8) of the Act.”[On 27th March, 2017]
Supreme court in the case of Imax Corporation v. M/s E-City Entertainment (I) Pvt. Ltd. [Civil Appeal No.3885 of 2017], while addressing the issue as to whether the seat of arbitration itself is a decisive factor to exclude Part-I of the Arbitration and Conciliation Act, 1996, it was held that “the relationship between the seat of arbitration and the law governing arbitration is an integral one.”
It was held that “the place of arbitration determines the law that will apply to the
arbitration and related matters like challenges to the award etc.” and “if in pursuance
of the arbitration agreement, the arbitration took place outside India, there is a clear
exclusion of Part-I of the Arbitration Act.”
[On 10th March, 2017]