Change of ‘venue’ different from change of ‘seat’ of Arbitration; exercise of jurisdiction under Section 34 A&C Act declined for ‘seat’ being at London: Del HC

Delhi High Court: A Single Judge Bench comprising of Navin Chawla, J., declined to exercise jurisdiction in entertaining a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 holding the seat Arbitration to be in London.

The petition was filed under Section 34 in a matter arising out of a Time Charter Party Agreement entered into between the parties. the respondent challenged the jurisdiction of the High Court contending that Part I of the Act was not applicable as the seat of arbitration in the present petition was at London. It was an undisputed fact that according to the Arbitration Clause contained in the Agreement, the seat of arbitration was to be at London though the hearings were being conducted in New Delhi. It was also undisputed that the petitioner had itself challenged the award impugned before the High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (QBD) by way of a petition under Section 68 of the (English) Arbitration Act, 1996. In December 2010, the respondent, vide a letter, had sought change of seat of arbitration. Subsequently, vide its letter dated 23 March 2011, the petitioner informed the respondent that the venue of the arbitration could be New Delhi and it still be governed by the (English) Arbitration Act, 1996 and by the procedure as prescribed by the London Maritime Arbitrators Association Rules (LMAA Rules). This was confirmed too by the respondent. Thereafter, pursuant to the passage of the award impugned, the petitioner filed the instant petition which was challenged by the respondent as mentioned hereinabove.

The High Court perused the record and was of the view that a reading of the correspondence exchanged between the parties would clearly show that the parties did not arrive at a consensus for change of seat of arbitration from London to New Delhi. It was observed that the “venue cannot be construed as a seat of arbitration”. Reference was made to Union of India v. Hardy Exploration and Production (India) INC, 2018 SCC OnLine SC 1640 and it was held that not only the Arbitration clause contained in the Time Charter Party Agreement but also the conduct of the parties, gathered from the exchange of correspondence, their conduct before the Arbitral Tribunal as also the conduct subsequent to the passing of the award impugned, would lead to a conclusion that the parties agreed on the seat of arbitration to be at  London. Therefore, the Court held that it lacked jurisdiction under Section 34 of the Act. Resultantly, the petition was dismissed. [Dredging Corporation of India v. Mercator Ltd.,2018 SCC OnLine Del 11930, decided on 10-10-2018]

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