Arbitration In India“Place” to be construed as “Seat” of Arbitration in absence of seat clause in the Agreement

The Delhi High Court in Anju Jain v. M/s WTC Noida Development Company Pvt Ltd [ ARB.P. 1329 of 2023, decided on 08.04.2024]   held that place of Arbitration would be considered as seat of Arbitration in absence of seat clause in the Agreement.

FACTS

Anju Jain and Ankit Saggi (hereinafter called as “Petitioners”) had executed a Unit Buyer Agreement on 17.10.2023 (hereinafter referred to as the “Agreement”) with M/s. WTC NOIDA Development (hereinafter referred as “Respondent”) for booking a flat for consideration of Rs. 24,78,336/- (Rupees Twenty Four Lakhs Seventy Eight Thousand Three Hundred Thirty Six Only).

The Article 11.5 of the Agreement categorically provided that the Respondent was supposed to pay rents to the Petitioner. The Respondents have paid rent for the period of April 2019 to April 2022. However, even after repeated reminders of the Petitioner, the Respondent has failed to make the payment despite of discharging the full consideration.

In pursuance of Clause 17.2 of the Agreement, the Petitioner invoked the Arbitration Clause and issued a notice under Section 21 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as “A&C Act”).  The Respondent failed to provide any reply to the same.

Further, the present petition under Section 11 of A&C Act was filed by the Petitioner.

’ISSUES BEFORE THE DELHI HIGH COURT

1. Whether the present Court has the jurisdiction to entertain a petition under Section 11 of the A&C Act?
2. Whether the Clause 17.2 or 17.3 shall be considered for deciding the place of Arbitration? CONTENTIONS OF THE PARTIES

The Petitioner contended that the subject matter was covered under the Agreement. It was further argued that Clause 17.2 categorically provided that the Arbitration shall be conducted at New Delhi.

The Respondent contended that Clause 17.3 provided that the seat of Arbitration was Noida and the present petition was not maintainable.

DECISION AND FINDINGS

The Delhi High Court observed the Clause 17.2 and 17.3 of the Agreement and held that Clause 17.3 was subject to Clause 17.2 of the Agreement. It was observed that Clause 17.3 stated that if the matter was not referred to Arbitration, which would be entertained by the courts of Noida. Further, Clause 17.2 of the Agreement clearly stated that the Arbitration shall be conducted at Delhi. Therefore, the seat of Arbitration would be Delhi.

The Delhi High Court relied on Cinepolis India Pvt. Ltd. v. Celebration City Projects Pvt. Ltd. (2020:DHC:410) and Yassh Deep Builders LLP v. Sushil Kumar Singh (2024:DHC:1812-DB) and held that in case of dispute between exclusive jurisdiction and place of Arbitration, place of Arbitration shall be treated as “seat” of Arbitration.

The Delhi High Court appointed Ld. Sole Arbitrator and dismissed the Petition.

AMLEGALS REMARKS

The Delhi High Court in has held that in absence of the mention of “seat” in the Arbitration Agreement, place of Arbitration would be considered to be seat of Arbitration. It was further held that in the case of “place of Arbitration” and “exclusive jurisdiction” in the Agreement, place would be considered to be the seat of Arbitration. The Courts have upheld the principle of party autonomy and given primacy to the Arbitration Agreement.

-Team AMLEGALS, assisted by Mr. Samarth Sheth (Intern)

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