Alternative Dispute Resolution

Aniket SA Investments LLC v. Janapriya Engineers Syndicate Pvt. Ltd.

Commercial Appeal No. 504 of 2019, Bombay High Court, 29 January 2021

Citation: Commercial Appeal No. 504 of 2019, Bombay High Court, 29 January 2021
Court: Bombay High Court
Date: 29 January 2021
Bench: R.D. Dhanuka and V.G. Bisht, JJ.

Facts

Aniket SA Investments entered into a commercial agreement with Janapriya Engineers.
The contract contained:
an arbitration clause referring to Mumbai as the venue or place of arbitration; and
another clause conferring jurisdiction upon courts at Hyderabad.
Disputes arose, and arbitration was commenced.
Questions later arose concerning which High Court possessed supervisory jurisdiction.
One party relied on the Hyderabad jurisdiction clause and the factual connection of the transaction with Hyderabad.
The other party argued that:
Mumbai had been selected as the arbitral seat;
the seat carried exclusive jurisdiction; and
the Bombay High Court alone could hear arbitration applications.
The Single Judge accepted Bombay jurisdiction.
The matter was challenged before the Division Bench.

Issue

Whether Mumbai was merely a venue or the juridical seat.
Whether the Hyderabad jurisdiction clause displaced the seat court.
Whether two courts could exercise concurrent arbitral jurisdiction.

Rule

The arbitration clause must be interpreted as a whole to identify the seat.
Where a place is designated for arbitration and there are no significant contrary indicators, that place is ordinarily the juridical seat.
Selection of a seat gives exclusive supervisory jurisdiction to the seat courts.
A general contractual jurisdiction clause may govern:
ordinary civil disputes;
non-arbitral remedies; or
matters outside the arbitration clause.
It does not ordinarily displace a specifically selected arbitral seat.
Indus Mobile and BGS SGS Soma reject concurrent supervisory jurisdiction.

Application

The contract identified Mumbai in the arbitration clause itself.
The Court treated the location as part of the legal dispute-resolution bargain rather than a casual place for meetings.
No provision clearly identified another juridical seat.
The Hyderabad clause appeared in the general contractual section.
It could be given a meaningful operation without treating Hyderabad as the seat.
It governed court proceedings unrelated to arbitral supervision.
If Hyderabad and Mumbai courts both possessed jurisdiction over:
interim measures;
appointment;
tribunal challenges; and
setting aside, the result would conflict with the seat principle.
The parties would face:
parallel proceedings;
competing orders;
tactical forum selection; and
uncertainty over Section 42.
The specific arbitration clause therefore prevailed over the general jurisdiction clause for arbitration-related proceedings.
The Court followed BGS SGS Soma, which held that a designated venue becomes the seat where:
arbitration is anchored there;
no alternative seat is identified; and
the agreement contains no contrary indicia.
The parties’ conduct and procedural steps were also consistent with Mumbai.
The Court rejected the argument that cause of action must independently arise in Mumbai.
The juridical seat itself creates the relevant supervisory connection.
The decision illustrates how apparently inconsistent clauses should be harmonised:
the seat clause governs arbitration;
the general jurisdiction clause governs other litigation.
The Bombay High Court therefore retained exclusive jurisdiction.

Conclusion

The Division Bench held that Mumbai was the juridical seat.
Bombay courts had exclusive supervisory jurisdiction.
The Hyderabad jurisdiction clause did not create concurrent arbitration jurisdiction.
Use this case for: a specific Mumbai arbitration clause prevails over a general Hyderabad jurisdiction clause for arbitral supervision.