Supreme Court: In a case concerning the maintainability of petitions under Section 34, Arbitration and Conciliation Act, 1996 (“the Act”), challenging an arbitral award, a Division Bench of Sanjay Kumar and Sanjeev Sachdeva*, JJ., held that the petitions filed before the District Judge, Sundargarh were maintainable. The Court held that the petitions were filed within the limitation period prescribed under Section 34(3) of the Act and that Cuttack could not be treated as the “seat of arbitration” merely because the arbitral proceedings were conducted there. The Court further observed that neither the order appointing the sole arbitrator nor any agreement between the parties designated Cuttack as the juridical seat of arbitration. Holding that the mere appointment of the arbitrator by the High Court at Cuttack did not confer jurisdiction on the courts at Cuttack, the Court set aside the impugned judgment of the High Court and restored Section 34 petitions before the District Judge, Sundargarh for adjudication in accordance with law.
Background
The appellants issued a tender on 7 November 2012 for hiring of HEMM for various mining and allied works at Kulda OCP, Basundhara—Garjanbahal areas of MCL, Sundargarh. The respondent was the successful bidder and a contract was executed between the parties, which admittedly contained no arbitration clause. Upon disputes arising, the respondent approached the Orissa High Court, which by order dated 25 March 2019 appointed a sole arbitrator under Section 11(6) of the Act. The arbitration proceedings were conducted at Cuttack and culminated in a common arbitral award dated 25 October 2021 in favor of the respondent.
The appellants filed 3 petitions under Section 34 of the Act on 8 December 2021 before the District Court, Sundargarh, seeking setting aside of the award. The respondent objected to their maintainability on the grounds that the petitions were barred by limitation and that the Sundargarh Court lacked territorial jurisdiction, Cuttack being the seat of arbitration. Though the District Judge dismissed the objections on 6 March 2024, the High Court, by the impugned judgment dated 20 June 2025, allowed the respondent’s writ petition and held that, in view of the appointment of the arbitrator by the High Court at Cuttack and Section 42 of the Act, courts at Cuttack alone had jurisdiction to entertain the Section 34 petitions. The High Court further held that the petitions were barred by limitation, even after excluding the period spent before the allegedly wrong court. Aggrieved thereby, the appellants have preferred the present appeal.
Analysis
On the question of limitation, the Court noted that the common arbitral award was passed on 25 October 2021 and Section 34 petitions were filed on 8 December 2021, i.e., within the period of 3 months prescribed under Section 34(3) of the Act. The respondent fairly conceded that the finding of the High Court that the petitions were barred by limitation was erroneous.
On the question of jurisdiction, the Court stated that “a High Court of a State exercises jurisdiction over the entire State and as such all the Commercial Courts/District Courts (where no commercial Court has been set up) within the territorial jurisdiction of the High Court would have jurisdiction to entertain a petition under section 34 of the Act, unless there is an agreement of the parties to the contrary or a specific determination of a ‘Seat’ in the order of appointment or any such stipulation/direction by the Court”.
The Court held that the subject work was executed at Sundargarh and, in terms of the contractual stipulation, the competent court having territorial jurisdiction over the place where the work was executed was the Court at Sundargarh. Since no Commercial Court had been constituted at Sundargarh at the relevant time, the petition under Section 34 could be presented before the District Judge, Sundargarh.
The Court further held that the High Court erred in treating Cuttack as the “seat of arbitration” merely because the arbitral proceedings were conducted there. The order dated 25 March 2019 appointing the sole arbitrator did not specify Cuttack as the seat, nor was there any agreement between the parties designating Cuttack as the juridical seat. The proceedings having been conducted at Cuttack for the convenience of the arbitrator could not, by itself, determine the juridical seat. The Court reiterated the distinction between “seat” and “venue”, observing that while the seat determines the courts exercising supervisory jurisdiction, the venue merely denotes the physical location where the sittings are held.
The Court also rejected the reasoning that Cuttack acquired jurisdiction merely because the arbitrator was appointed by the High Court at Cuttack. Merely because the seat of the High Court is at Cuttack would not confer jurisdiction on the District or Commercial Courts at Cuttack. Accordingly, the Court held that the Section 34 petitions filed before the District Judge, Sundargarh were maintainable.
Decision
Consequently, the appeal was allowed and the impugned judgment dated 20 June 2025 was set aside. The petitions under Section 34 of the Act were restored to the file of the District Judge, Sundargarh, with a direction to decide the same in accordance with law expeditiously.
[Mahanadi Coalfields Ltd. v. GSCO (Gurmeet Singh and Company) Infrastructure (P) Ltd., 2026 SCC OnLine SC 1981, decided on 23-9-2026]
*Judgment authored by: Justice Sanjeev Sachdeva
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