Territorial Jurisdiction in Arbitration : Venue of Arbitral Proceedings and Interpretation of Agreement

Territorial Jurisdiction in Arbitration : Venue of Arbitral Proceedings and Interpretation of Agreement

The issue arose in Yassh Deep Builders LLP v. Sushil Kumar Singh and Another, [2024] GCtR 751 (Delhi) where it was held that "when the contract contains an arbitration clause that specifies a “venue”, thereby anchoring the arbitral proceedings thereto, then the said “venue” is really the “seat” of arbitration. In such a situation the courts having supervisory jurisdiction over the said “seat” shall exercise supervisory jurisdiction over the arbitral process, notwithstanding that the contract contains a clause seeking to confer “exclusive jurisdiction” on a different court. Further, that a generic clause, not specifically referring to arbitration proceedings would not serve as a “contrary indicia” so as to denude the jurisdiction of the Courts having jurisdiction over the “seat” of Arbitration."

In this case, Clause 19 was the jurisdiction clause stipulating jurisdiction of Courts at Gurugram, Haryana alone and Clause 23 was an arbitration clause designating the venue at Delhi. Examining the issue of territorial jurisdiction of this clause, the Bench rejected the preliminary objection and held that Clause 23 providing for venue of arbitration at Delhi is indicative of the intention of the parties that arbitral proceedings will be anchored at Delhi.