Holding

Appeals under Section 37 are not maintainable because the order does not fall within its limited scope, and the arbitration clause designates New Delhi as the seat, giving the New Delhi courts exclusive jurisdiction over the Section 34 challenge.

Summary

The petitioners BGS SGS SOMA JV sought to enforce an arbitral award concerning a hydro‑electric project, while the respondent NHPC Ltd filed a Section 34 petition in the Faridabad court to set aside the award. The petitioners applied under Section 151 CPC to have the petition returned to the appropriate court, and the Special Commercial Court at Gurugram ordered it to be filed in New Delhi. NHPC appealed to the High Court, which held that the appeal was maintainable under Section 37(1)(c) of the Arbitration Act and that Faridabad, not New Delhi, was the seat of arbitration. The Supreme Court held that the order returning the petition does not fall within the limited categories of orders appealable under Section 37, and that the arbitration clause designating "Arbitration Proceedings shall be held at New Delhi/Faridabad" makes New Delhi the juridical seat, giving the New Delhi courts exclusive jurisdiction over the Section 34 challenge. Consequently, the High Court judgment was set aside and the Section 34 petition was ordered to be filed in New Delhi.

Issues considered

The maintainability of an appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 when the order appealed is an order under Section 151 CPC returning a Section 34 petition
Whether the phrase "Arbitration Proceedings shall be held at New Delhi/Faridabad" constitutes a designation of the seat of arbitration or merely a venue
The effect of the designated seat on the exclusive jurisdiction of courts under Sections 20, 31(4), 42 and 2(1)(e) of the Arbitration Act, 1996
The interaction between the Commercial Courts Act, 2015 and the Arbitration Act, 1996 in determining the right of appeal

Legislation cited

Arbitration and Conciliation Act, 1996s. 20, s. 2(1)(e), s. 31(4), s. 34, s. 37, s. 42, s. 50
Code of Civil Procedure, 1908s. Order VII Rule 10
Commercial Courts Act, 2015s. 13(1), s. 13(1A)

Subjects

arbitrationseat of arbitrationjurisdictionSection 37 appealArbitration Act 1996Commercial Courts Act 2015venue vs seatexclusive jurisdiction clauseUNCITRAL Model Law

Judgment

742 [2019]
SUPREME COURT 17 S.C.R. 742
REPORTS [2019] 17 S.C.R.

A BGS SGS SOMA JV
v.
NHPC LTD.
(Civil Appeal No. 9307 of 2019)
B DECEMBER 10, 2019
[R. F. NARIMAN, ANIRUDDHA BOSE AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration and Conciliation Act, 1996:
C s. 37 – Appeals under – Against the orders passed in
applications u/s. 151 r/w O. VII r. 10 CPC and u/s. 2(1)(e)(i) of
the Arbitration and Conciliation Act, 1996, seeking return of
petition filed u/s. 34 of 1996 Act – Maintainability of – Held:
Section 37(1) makes it clear that appeals shall only lie from the
orders set out in sub-clause (a), (b) and (c) thereof and no others
D
– The refusal to set aside an arbitral award must be under s. 34
i.e. after the grounds set out in s. 34 have been applied to the
arbitral award in question and after the courts have turned down
such grounds – In the present case there was no adjudication u/s.
34 – Therefore, the appeals filed in the present case do not fall
E within s. 37 and hence not maintainable.
ss. 20, 31(4), 42 and 2(1)(e) – Juridical seat of arbitral
proceedings – What constitutes ‘judicial seat’ of arbitral proceeding
– In the facts of the present case whether the ‘seat’ of the
arbitration proceedings would be in ‘New Delhi’ or ‘Faridabad’ –
F Held: The moment a seat is designated by agreement between the
parties, it is akin to an exclusive jurisdiction clause, which would
then vest the Courts at the ‘seat’ with exclusive jurisdiction for the
purpose of regulating arbitral proceedings – In order to determine
whether the ‘seat’ of the arbitral proceedings has, infact, been
indicated in the agreement between the parties, it is to be seen that
G wherever there is express designation of a ‘venue’ and there is no
designation of any alternative place as the ‘seat’, combined with
supranational body of rules governing the arbitration, and no
other significant contrary indicia, the stated ‘venue’ would be
actually the ‘seat’ of the arbitral proceedings – The arbitration
H clause in the present case states that “Arbitration Proceedings shall
742
BGS SGS SOMA JV v. NHPC LTD. 743

be at New Delhi/Faridabad” indicates that the proceedings shall A
be held at either of the two places – Both the places have been
designated as the ‘seat’ of the arbitration proceedings – In all the
cases, since the proceedings were finally held at New Delhi and
the awards were signed in New Delhi, would lead to the conclusion
that both the parties have chosen New Delhi as ‘seat’ of arbitration
B
u/s. 20(1) – Therefore, both parties have chosen that the Court at
New Delhi alone would have exclusive jurisdiction over the arbitral
proceedings.
Judgments/Orders:
Interpretation of judgments – Principles – Held: Judgments C
of courts are not to be construed as statutes – They are not to be
read as Euclid’s theorems – Observations made therein must be read
in the context in which they appear.
Judgment having conflicting portions – Held: A judgment
must be read as a whole, so that conflicting parts may be D
harmonised to reveal the true ratio of the judgment – If harmonising
is not possible, first it should be seen if ratio decidendi can be
called out without the conflicting portion – If not the binding nature
of the precedent on the point on which there is a conflict in
judgment, comes under a cloud.
E
Allowing the appeals, the Court
HELD: 1.1 Given the fact that there is no independent
right of appeal under Section 13(1) of the Commercial Courts
Act, 2015, which merely provides the forum of filing appeals, it
is the parameters of Section 37 of the Arbitration Act,1996 alone F
which have to be looked at in order to determine whether the
present appeals were maintainable. [Para 14] [764-C]
1.2 Section 37(1) Arbitration Act makes it clear that
appeals shall only lie from the orders set out in sub-clauses (a),
(b) and (c) and from no others. The pigeonhole that the High
G
Court in the impugned judgement has chosen to say that the
appeals in the present cases were maintainable is sub-clause (c).
According to the High Court, even where a Section 34
application is ordered to be returned to the appropriate Court,
such order would amount to an order “refusing to set aside an
arbitral award under Section 34”. [Para 14] [764-C-D] H
744 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 1.3 Under the proviso to Section 13(1A) of the Commercial
Courts Act, 2015, Order XLIII of the CPC is also mentioned.
This provision is conspicuous by its absence in Section 37 of
the Arbitration Act, 1996, which alone can be looked at for the
purpose of filing appeals against orders setting aside, or refusing
to set aside awards under Section 34. Also, what is missed by
B
the impugned judgment is the words “under Section 34”. Thus,
the refusal to set aside an arbitral award must be under Section
34, i.e., after the grounds set out in Section 34 have been applied
to the arbitral award in question, and after the Court has turned
down such grounds. Admittedly, on the facts of the present cases,
C there was no adjudication under Section 34 of the Arbitration
Act, 1996 - all that was done was that the Special Commercial
Court at Gurugram allowed an application filed under Section 151
read with Order VII Rule 10 CPC, determining that the Special
Commercial Court at Gurugram had no jurisdiction to proceed
further with the Section 34 application, and therefore, such
D
application would have to be returned to the competent court
situate at New Delhi. Thus, the appeals filed in the present case
do not fall within Section 37 of the Arbitration Act,1996 and are
not maintainable. [Paras 15-16 and 22] [764-E-G-H; 765-A-B;
770-B]
E Kandla Export Corporation & Anr. v. M/s OCI
Corporation & Anr. (2018) 14 SCC 715 : [2018] 1
SCR 915 – relied on.
Hamanprit Singh Sidhu v. Arcadia Shares & Stock
Brokers Pvt. Ltd 2016 234 DLT 30 (DB) ; South Delhi
F MunicipalCorporation v. Tech Mahindra EFA (OS)
(Comm.) 3 of 2019 – approved.
Antrix Corporation Ltd. v. Devas Multimedia Pvt. Ltd.
2018 SCC Online Del 9338 – held per-incuriam.

G Municipal Corporation of Delhi & Ors. v.
International Security & Intelligence Agency Ltd.
(2004) 3 SCC 250 : [2003] 1 SCR 951 ; Arcot Textile
Mills Ltd. v. Regional Provident Fund Commissioner
and Ors. (2013) 16 SCC 1 : [2013] 11 SCR 371 ;
South Delhi Municipal Corporation v. Tech Mahindra
H EFA (OS) (Comm.) 3 of 2019 – referred to.
BGS SGS SOMA JV v. NHPC LTD. 745

2.1 In the statutory setting under Arbitration Act of 1940, A
the “place” in which the award is made, is not referred to at all.
Given this fact, the “Court” was defined as any Civil Court
having jurisdiction to decide questions forming the subject
matter of the reference to arbitration if the same had been the
subject matter of a suit. The UNCITRAL Model Law on
International Commercial Arbitration (as adopted by the United B
Nations Commission on International Trade Law on 21 June
1985) was then adopted by this country. The UNCITRAL Model
Law introduced the concept of “place” or “seat” of the arbitral
proceedings. [Paras 28 and 29] [772-F-G]
2.2 The Arbitration Act, 1996 repealed the Arbitration Act, C
1940. As is stated in its preamble, the Arbitration Act, 1996
adopted provisions of the UNCITRAL Model Law, as they had
made a significant contribution to the establishment of a unified
legal frame work for the fair and efficient settlement of disputes
arising in international commercial relations. The Arbitration D
Act, 1996 refers to “the place” of arbitration and defines ‘Court’,
and indicates which Courts have jurisdiction in relation to arbitral
proceedings in several sections in Part I. [Paras 30 and 31] [774-
A-B]
2.3 The new provisions contained in Sections 20 and 31(4)
of the Arbitration Act, 1996 are a replication of Articles 20 and E
31(3) of the UNCITRAL Model Law, in which pride of place is
given to the juridical seat of the arbitral proceedings. However,
the definition of “court” in Section 2(1)(e) of the Arbitration Act,
1996 continues the definition contained in the Arbitration Act,
1940, but replaces any and every civil court by only the principal F
civil court of original jurisdiction in a district, and includes the
High Court in exercise of its ordinary civil jurisdiction. Section
42 of the Arbitration Act, 1996 also substantially follows the drill
of Section 31(4) of the Arbitration Act, 1940. [Para 33] [775-H;
776-A-B]
G
2.4 Thus, given the new concept of “juridical seat” of the
arbitral proceedings, and the importance given by the
Arbitration Act, 1996 to this “seat”, the arbitral award is now
not only to state its date, but also the place of arbitration as
determined in accordance with Section 20. However, the
definition of “Court” contained in Section 2(1)(c) of the H
746 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Arbitration Act, 1940, continued as such in the Arbitration Act,
1996, though narrowed to mean only principal civil court and the
High Court in exercise of their original ordinary civil jurisdiction.
Thus, the concept of juridical seat of the arbitral proceedings
and its relationship to the jurisdiction of courts which are then
to look into matters relating to the arbitral proceedings
B
including challenges to arbitral awards was unclear, and had to
be developed in accordance with international practice on a case
by case basis by this Court. [Para 34] [776-C-D]

2.5 The judgment in *BALCO case would show that where
C parties have selected the seat of arbitration in their agreement,
such selection would then amount to an exclusive jurisdiction
clause, as the parties have now indicated that the Courts at the
“seat” would alone have jurisdiction to entertain challenges
against the arbitral award which have been made at the seat.
The *BALCO judgment when read as a whole, applies the concept
D
of “seat” which is in Section 20 of the Arbitration Act, 1996, by
harmoniously construing Section 20 with Section 2(1)(e), so as
to broaden the definition of “court”, and bring within its ken
courts of the “seat” of the arbitration. However, this proposition
is contradicted when paragraph 96 of the judgment speaks of
E the concurrent jurisdiction of Courts within whose jurisdiction
the cause of action arises wholly or in part, and Courts within
the jurisdiction of which the dispute resolution i.e. arbitration,
is located. [Paras 40 and 41] [783-H; 784-A-D]

2.6 Judgments of Courts are not to be construed as
F
statutes, neither are they to be read as Euclid’s theorems. All
observations made must be read in the context in which they
appear. In any case, a judgment must be read as a whole, so that
conflicting parts may be harmonised to reveal the true ratio of
the judgment. However, if this is not possible, and it is found
G that the internal conflicts within the judgment cannot be
resolved, then the first endeavour that must be made is to see
whether a ratio decidendi can be culled out without the conflicting
portion. If not, then, the binding nature of the precedent on the
point on which there is a conflict in a judgment, comes under a
H cloud. [Paras 43 and 45] [785-C; 787-A-B]
BGS SGS SOMA JV v. NHPC LTD. 747

2.7 If paragraphs 75, 76, 96, 110, 116, 123 and 194 of the A
judgment in *BALCO case are read together, what becomes clear
is that Section 2(1)(e) has to be construed keeping in view
Section 20 of the ArbitrationAct, 1996, which gives recognition
to party autonomy - the Arbitration Act, 1996 having accepted
the territoriality principle in Section 2(2), following the
UNCITRAL Model Law. The narrow construction of Section B
2(1)(e) was expressly rejected in *BALCO case. This being so,
what has then to be seen is what is the effect Section 20 on
Section 2(1)(e) of the Arbitration Act, 1996. [Para 46] [788-A-
B]
2.8 In **Indus Mobile Distribution Private Limited case the C
provisions of Section 20 were properly analysed in the light of
the 246 thReport of the Law Commission of India titled,
‘Amendments to the Arbitration and Conciliation Act, 1996’ (i.e.
the “Law Commission Report, 2014”), under which Section
20(1) and (2) would refer to the “seat” of the arbitration, and
D
Section 20(3) would refer only to the “venue” of the arbitration.
Given the fact that when parties, either by agreement or, in
default of there being an agreement, where the arbitral tribunal
determines a particular place as the seat of the arbitration under
Section 31(4) of the Arbitration Act, 1996, it becomes clear that
the par- ties having chosen the seat, or the arbitral tribunal E
having determined the seat, have also chosen the Courts at the
seat for the purpose of interim orders and challenges to the
award. [Para 47] [788-C-E]
2.9 The Law Commission Report, 2014 also recommended
an amendment in the definition of “Court” under Section 2(1)(e) F
of the Arbitration Act, 1996, so that in the case of international
commercial arbitrations held in India, the High Court alone
should be the “Court” for the purposes of the Arbitration Act,
1996, even where such a High Court does not exercise ordinary
original jurisdiction. There commendation made by the Law
Commission, 1996. [Para 49] [790-F-G] G
2.10 The said amendment carried out in the definition of
“Court” is also a step showing the right direction, namely, that
in international commercial arbitrations held in India, the High
Court alone is to exercise jurisdiction over such proceedings,
even where no part of the cause of action may have arisen within H
748 SUPREME COURT REPORTS [2019] 17 S.C.R.

A the jurisdiction of such High Court, such High Court not having
ordinary original jurisdiction. In such cases, the “place” where
the award is delivered alone is looked at, and the High Court
given jurisdiction to supervise the arbitration proceedings, on
the footing of its jurisdiction to hear appeals from decrees of
courts subordinate to it, which is only on the basis of territorial
B
jurisdiction which in turn relates to the “place” where the award
is made. In the light of this im- portant change in the law, Section
2(1)(e)(i) of the Arbitration Act, 1996 must also be construed in
the manner indicated by this judgment. [Para 50] [791-H; 792-
A-B]
C 2.11 If, the conflicting portion of the judgment of *BALCO
case in paragraph 96 is kept aside for a moment, the very fact
that parties have chosen a place to be the seat would necessarily
carry with it the decision of both parties that the Courts at the
seat would exclusively have jurisdiction over the entire arbitral
D process. In fact, subsequent Division Benches of this Court have
understood the law to be that once the seat of arbitration is
chosen, it amounts to an exclusive jurisdiction clause, insofar
as the Courts at that seat are concerned. [Paras 51 and 52] [792-
F-H]
E 2.12 The moment a seat is designated by agreement
between the parties, it is akin toan exclusive jurisdiction clause,
which would then vest the Courts at the “seat” with exclusive
jurisdiction for purposes of regulating arbitral proceedings
arising out of the agreement between the parties. [Para 55] [796-
D]
F
2.13 It will thus be seen that wherever there is an express
designation of a “venue”, and no designation of any alternative
place as the “seat”, combined with a supranational body of rules
governing the arbitration, and no other significant contrary
indicia, the in-exorable conclusion is that the stated venue is
G actually the juridical seat of the arbitral proceeding. [Para 63]
[802-B]
2.14 Whenever there is the designation of a place of
arbitration in an arbitration clause as being the “venue” of the
arbitration proceedings,the expression“arbitration proceedings
H would make it clear that the “venue” is really the “seat” of the
BGS SGS SOMA JV v. NHPC LTD. 749

arbitral proceedings, as the aforesaid expression does not include A
just one or more individual or particular hearing, but the
arbitration proceedings as a whole, including the making of an
award at that place. This language has to be contrasted with
language such as “tribunals are to meet or have witnesses,
experts or the parties” where only hearings are to take place
B
in the “venue”, which may lead to the conclusion, other things
being equal, that the venue so stated is not the “seat” of arbitral
proceedings, but only a convenient place of meeting. Further,
the fact that the arbitral proceedings “shall be held” at a
particular venue would also indicate that the parties intended
to anchor arbitral proceedings to a particular place, signifying C
there by, that that place is these at of the arbitral proceedings.
This, coupled with there being no other significant contrary
indicia that the stated venue is merely a “venue” and not the
“seat” of the arbitral proceedings, would then conclusively show
that such a clause designates a “seat” of the arbitral proceedings.
D
In an International context, if a supranational body of rules
is to govern the arbitration, this would further be an indicia
that “the venue”, so stated, would be the seat of the arbitral
proceedings. In a national context, this would be replaced by the
Arbitration Act, 1996 as applying to the “stated venue”, which
then becomes the “seat” for the purposes of arbitration. [Para E
84] [816-G-H; 817-A-D]
2.15 In the present case, as per the arbitration agreement,
in case a dispute was to arise with a foreign contractor, clause
67.3(ii) would apply. Under this sub-clause, a dispute which
would amount to an ‘international commercial arbitration’ within F
the meaning of Section 2(1)(f) of the Arbitration Act, 1996, would
have to be finally settled in accordance with the Arbitration Act,
1996 read with the UNCITRAL Arbitration Rules, and in case
of any conflict, the Arbitration Act, 1996 is to prevail (as an award
made under Part I is considered a domestic award under Section
2(7) of the Arbitration Act, 1996 not withstanding the fact that G
it is an award made in an international commercial arbitration).
Applying the Shashoua principle, it is clear that if the dispute
was with a foreign contractor under Clause 67.3 of the
agreement, the fact that arbitration proceedings shall be held
at New Delhi/Faridabad, India in sub-clause (vi) of Clause 67.3, H
750 SUPREME COURT REPORTS [2019] 17 S.C.R.

A would amount to the designation of either of these places as the
“seat” of arbitration, as a supranational body of law is to be
applied, namely, the UNCITRAL Arbitration Rules, in
conjunction with the Arbitration Act, 1996. As such arbitration
would be an international commercial arbitration which would be
decided in India, the Arbitration Act, 1996 is to apply as well.
B
There being no other contra indication in such a situation, either
New Delhi or Faridabad, India is the designated “seat” under
the agreement, and it is there- after for the parties to choose
as to in which of the two places the arbitration is finally to be
held. [Para 98] [825-E-H; 826-A-B]
C 2.16 Given the fact that if there were a dispute between
NHPC Ltd. and a foreign con- tractor, clause 67.3(vi) would have
to be read as a clause designating the “seat” of arbitration, the
same must follow even when sub-clause (vi) is to be read with
sub-clause (i) of Clause 67.3, where the dispute between NHPC
D Ltd. would be with an Indian Contractor. The arbitration clause
in the present case states that “Arbitration Proceedings shall
be held at New Delhi/Faridabad, India…”, thereby signifying that
all the hearings, in- cluding the making of the award, are to take
place at one of the stated places. Negatively speaking, the clause
does not state that the venue is so that some, or all, of the
E hearings take place at the venue; neither does it use language
such as “the Tribunal may meet”, or “may hear witnesses,
experts or parties”. The expression “shall be held” also
indicates that the so called “venue” is really the “seat” of the
arbitral proceedings. The dispute is to be settled in accordance
with the Arbitration Act, 1996 which, therefore, applies a
F national body of rules to the arbitration that is to be held either
at New Delhi orFaridabad, given the fact that the present
arbitration would be Indian and not international. It is clear,
therefore, that even in such a scenario, New Delhi/Faridabad,
India has been designated as the “seat” of the arbitration
proceedings. [Para 99] [826-B-E]
G
2.17 However, the fact that in all the three appeals before
this Court, the proceedings were finally held at New Delhi, and
the awards were signed in New Delhi, and not at Faridabad,
would lead to the conclusion that both parties have chosen New
Delhi as the “seat” of arbitration under Section 20(1) of the
H Arbitration Act, 1996. This being the case, both parties have,
BGS SGS SOMA JV v. NHPC LTD. 751

therefore, chosen that the Courts at New Delhi alone would have A
exclusive jurisdiction over the arbitral proceedings. Therefore,
the fact that a part of the cause of action may have arisen at
Faridabad would not be relevant once the “seat” has been
chosen, which would then amount to an exclusive jurisdiction
clause so far as Courts of the “seat” are concerned. [Para 100]
[826-F-H] B
2.18 Consequently, the impugned judgment is set aside,
and the Section 34 petition is ordered to be presented in the
Courts in New Delhi, as was held by the Single Judge of the
Special Commercial Court at Gurugram. [Para 101] [827-A]
*Bharat Aluminium Co. (BALCO) v. Kaiser Aluminium C
Technical Service, Inc.,(2012) 9 SCC 552 : [2012] 12
SCR 327 Amar Nath Om Prakash v. State of Punjab
(1985) 1 SCC 345 ; Union of India v. Amrit Lal
Manchanda (2004) 3 SCC 75 : [2004] 2 SCR 422 ;
Brahmani River Pellets Ltd. v. Kamachi Industries Ltd.
2019 SCC Online SC 929 ; Enercon (India) Ltd. and D
Ors. v. Enercon GmbH and Anr. (2014) 5 SCC 1 ;
**Indus Mobile Distribution Private Limited v.
Datawind Innovations Private Limited & Ors., (2017)
7 SCC 678 : [2017] 4 SCR 744 – relied on.
Union of India v. Hardy Exploration and Production E
(India) Inc. 2018 SCC Online SC 1640 – held not
good law.
Antrix Corporation Ltd. v. Devas Multimedia Pvt. Ltd.
(2018) SCC Online Del 9338 – not approved.
Venture Global Engineering v. Satyam Computer F
Services Ltd. & Anr. (2008) 4 SCC 190 – stood
overruled.
Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd.
(2011) 16 SCC 179 ; Videocon Indusries Ltd. v. Union
of India (2011) 6 SCC 161 ; Harmony Innovation G
Shipping Ltd. v. Gupta Coal India Ltd. and Anr. (2015)
9 SCC 172 ; Roger Shashoua & Ors. v. Mukesh
Sharma & Ors., (2017) 14 SCC 722 ; Sumitomo Heavy
Industries Ltd. v. ONGC Ltd. & Ors. (1998) 1 SCC
305 ; Hakam Singh v. M/s. Gammon (India) Ltd.,
(1971) 1 SCC 286 : [1971] 3 SCR 314 ; Reliance H
752 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Industries Ltd. v. Union of India (2014) 7 SCC 603 :
[2014] 6 SCR 456 – referred to.
Roger Shashoua & Ors. v. Mukesh Sharma [2009]
EWHC 957 (Comm) ; Harper and Ors. v. National
Coal Board (1974) 2 All ER 441 ; Enercon GmbH v.
B Enercon (India) Ltd. [2012] EWHC 689 ; Shagang
South-Asia (Hong Kong) Trading Co. Ltd. v. Daewoo
Logistics [2015] EWHC 194 ; Process and Indusrial
Developments Ltd. v. Nigeria [2019] EWHC 2241 ;
Naviera Amazonica Peruana S.A. v. Compania
Internacional De Seguros Del Peru (1988) 1 Lloyd’s
C Rep 116 (CA) ; Braes of Doune Wind Farm (Scotland)
v. Alfred McAlpine Business Services Ltd. [2008]
EWHC 436 (TCC) ; C v. D [2007] EWCA Civ. 182 –
referred to.
Case Law Reference
D [2018] 1 SCR 915 relied on Para 6
[1971] 3 SCR 314 referred to Para 6
[2012] 12 SCR 327 relied on Para 6
[2017] 4 SCR 744 relied on Para 6
E
[2014] 6 SCR 456 referred to Para7
[2003] 1 SCR 951 referred to Para 17
[2013] 11 SCR 371 referred to Para 17
2016 234 DLT 30 (DB) approved Para 18
F
(1985) 1 SCC 345 relied on Para 43
(2004) 2 SCC 422 relied on Para 44
(2014) 5 SCC 1 relied on Para 51
(2011) 16 SCC 179 referred to Para 72
G
(2011) 6 SCC 161 referred to Para 74
(2015) 9 SCC 172 referred to Para 81
(1998) 1 SCC 305 referred to Para 90

H (2008) 4 SCC 190 stood overruled Para 94
BGS SGS SOMA JV v. NHPC LTD. 753

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9307 A
of 2019.
From the Judgment and Order dated 12.09.2018 of the High
Court of Punjab and Haryana at Chandigarh in FAO-COM No. 2 of
2018.
B
With
Civil Appeal Nos. 9308, 9309 of 2019.
Ms. Maninder Acharya, ASG, Dr. Abhishek M. Singhvi, Sr. Adv.,
Arunabh Chowdhury, Mrs. Pragya Baghel, Vaibhav Tomar, Barnali
Chowdhury, Ms. Shruti Choudhry, Amit Bhandari, Abhishek Roy, C
Ms. Samten Doma, Karma Dorjee, Dechen W. Lachungpa, A.C.
Mishra, Ankit Chaturvedi (for M/s ACM Legal), Puneet Taneja,
Tarkeshwar Nath, Ms. Laxmi Kumari, Viplav Acharya, Mahavir Rawat,
Rameshwar Prasad Goyal, Advs. for the appearing parties.
The Judgment of the Court was delivered by D

R. F. NARIMAN, J.
1. Leave granted.
2. Three appeals before us raise questions as to maintainability
of appeals under Section 37 of the Arbitration and Conciliation Act, 1996 E
(hereinafter referred to as “the Arbitration Act, 1996”), and, given the
arbitration clause in these proceedings, whether the “seat” of the
arbitration proceedings is New Delhi or Faridabad, consequent upon
which a petition under Section 34 of the Arbitration Act, 1996 may be
filed dependent on where the seat of arbitration is located. F
3. At the outset, the facts in SLP (Civil) No.25618 of 2018 are
set out as follows. On 16.01.2004, the Petitioner was awarded a contract
for construction of Diversion Tunnels, Coffer Dams, Concrete Gravity
Dams, Plunge Pools and Cutoff Walls of Subansri Lower Hydroelectric
Project on river Subansri, with an installed capacity of 2000 MW, stated G
to be the largest Hydropower project yet in India. The project site is
located in the lower Subansri districts in the States of Assam and
Arunachal Pradesh. Clause 67.3 of the agreement between the parties
provides for dispute resolution through arbitration. Clause 67.3 reads
as follows: H
754 SUPREME COURT REPORTS [2019] 17 S.C.R.

A “Any dispute in respect of which the Employer and the
Contractor have failed to reach at an amicable settlement
pursuant to Sub-Clause 67.1, shall be finally settled by arbitration
as set forth below. The Arbitral Tribunal shall have full power to
open up, review and revise any decision, opinion, instruction,
determination, certificate or valuation of the Engineer.
B
(i) A dispute with an Indian Contractor shall be finally
settled in accordance with the Indian Arbitration and
Conciliation Act, 1996, or any statutory amendment
thereof. The arbitral tribunal shall consist of 3 arbitrators,
one each to be appointed by the Employer and the
C Contractor. The third Arbitrator shall be chosen by the
two Arbitrators so appointed by the Parties and shall act
as Presiding arbitrator. In case of failure of the two
arbitrators, appointed by the parties to reach upon a
consensus within a period of 30 days from the
D appointment of the arbitrator appointed subsequently, the
Presiding arbitrator shall be appointed by the President
of the Institution of Engineers (India). For the purposes
of this Sub-Clause, the term “Indian Contractor” means
a contractor who is registered in India and is a juridic
person created under Indian law as well as a joint
E venture between such a contractor and a Foreign
Contractor.
(ii) In the case of a dispute with a Foreign Contractor, the
dispute shall be finally settled in accordance with the
provisions of the Indian Arbitration and Conciliation Act,
F 1996 and read with UNCITRAL Arbitration Rules. The
arbitral tribunal shall consist of three Arbitrators, one
each to be appointed by the Employer and the
Contractor. The third Arbitrator shall be chosen by the
two Arbitrators so appointed by the Parties and shall act
as Presiding arbitrator. In case of failure of the two
G
arbitrators appointed by the parties to reach a consensus
within a period of 30 days from their appointment on
the Presiding Arbitrator to be appointed subsequently,
the Presiding arbitrator shall be appointed by the
President of the Institution of Engineers (India). For the
H purposes of this Clause 67, the term “Foreign
BGS SGS SOMA JV v. NHPC LTD. 755
[R. F. NARIMAN, J.]

Contractor” means a contractor who is not registered A
in India and is not a juridic person created under Indian
Law. In case of any contradiction between Indian
Arbitration and Conciliation Act, 1996 and UNCITRAL
Arbitration Rules, the provisions in the Indian Arbitration
and Conciliation Act, 1996 shall prevail.
B
(iii) Arbitration may be commenced prior to or after
completion of the Works, provided that the obligations
of the Employers, the Engineer, and the Contractor shall
not be altered by reason of the arbitration being
conducted during the progress of the Works.
C
xxx xxx xxx
(v) If one of the parties fail to appoint its arbitrator in
pursuance of sub-clause (i) and (ii) above, within 30 days
after receipt of the notice of the appointment of its
arbitrator by the other party, then the President of the D
Institution of Engineers (India), both in cases of foreign
contractors as well as Indian Contractors, shall appoint
the arbitrator. A certified copy of the order of the
President of Institution of Engineers (India), making
such an appointment shall be furnished to each of the
parties. E

(vi) Arbitration Proceedings shall be held at New Delhi/
Faridabad, India and the language of the arbitration
proceedings and that of all documents and
communications between the parties shall be English.
F
(vii) The decision of the majority of arbitrators shall be final
and binding upon both parties. The cost and expenses
of Arbitration shall be borne in such a manner as
determined by the arbitral tribunal. However, the
expenses incurred by each party in connection with the
preparation, presentation etc. of its proceedings as also G
the fees and expenses paid to the arbitrator appointed
by such party on its behalf shall be borne by each party
itself.”
4. On 16.05.2011, a Notice of Arbitration was issued by the
Petitioner to the Respondent, in regard to payment of compensation for H
756 SUPREME COURT REPORTS [2019] 17 S.C.R.

A losses suffered due to abnormal delays and additional costs as a result
of hindrances caused by the Respondent. A three-member Arbitral
Tribunal was constituted as per clause 67.3 of the agreement under
the Arbitration Act, 1996. Pursuant thereto, the Petitioner filed its
Statement of Claim seeking recovery of an amount of INR 986.60
crores plus CHF 1060619. Between August 2011 and August 2016,
B
seventy-one sittings of the Arbitral Tribunal took place at New Delhi.
The Tribunal then delivered its unanimous award at New Delhi on
26.08.2016, by which the claims of the Petitioner aggregating to INR
424,81,54,096.29 were allowed, together with simple interest at 14%
per annum till the date of actual payment. On 04.10.2016, in view of
C certain computational and typographical errors in the arbitral award, the
figure of 424,81,54,096.29 was rectified to INR 424,70,52,126.66. On
03.01.2017, being aggrieved by the arbitral award and the rectification
thereto, the Respondent filed an application under Section 34 of the
Arbitration Act, 1996 seeking to set aside these awards before the Court
of the District and Sessions Judge, Faridabad, Haryana. On 28.04.2017,
D
the Petitioner filed an application under Section 151 read with Order
VII Rule 10 of the Code of Civil Procedure, 1908 (hereinafter referred
to as the “CPC”) and Section 2(1)(e)(i) of the Arbitration Act, 1996,
seeking a return of the petition filed under Section 34 for presentation
before the appropriate Court at New Delhi and/or the District Judge
E at Dhemaji, Assam. In November, 2017, after the constitution of a
Special Commercial Court at Gurugram, the Section 34 petition filed at
Faridabad was transferred to the said Gurugram Commercial Court and
numbered as Arbitration Case No.74 (CIS No. ARB/118/2017).
5. On 21.12.2017, the Special Commercial Court, Gurugram
F allowed the application of the Petitioner, and returned the Section 34
petition for presentation to the proper court having jurisdiction in New
Delhi. On 15.02.2018, the Respondent filed an appeal under Section
37 of the Arbitration Act, 1996 read with Section 13(1) of the
Commercial Courts Act, 2015 before the High Court of Punjab and
Haryana at Chandigarh. On 12.09.2018, the impugned judgment was
G delivered by the Punjab and Haryana High Court, in which it was held
that the appeal filed under Section 37 of the Arbitration Act, 1996 was
maintainable, and that Delhi being only a convenient venue where
arbitral proceedings were held and not the seat of the arbitration
proceedings, Faridabad would have jurisdiction on the basis of the cause
H of action having arisen in part in Faridabad. As a result, the appeal was
BGS SGS SOMA JV v. NHPC LTD. 757
[R. F. NARIMAN, J.]

allowed and the judgment of the Special Commercial Court, Gurugram A
was set aside.
6. Dr. Abhishek Manu Singhvi, learned Senior Advocate
appearing on behalf of the Petitioner in SLP (C) No.25618 of 2018,
has assailed the impugned High Court judgment on both counts.
According to him, on a combined reading of Section 13 of the B
Commercial Courts Act, 2015 and Section 37 of the Arbitration Act,
1996, it becomes clear that Section 13 of the Commercial Courts Act,
2015 only provides the forum for challenge, whereas Section 37 of the
Arbitration Act, 1996 - which is expressly referred to in the proviso to
Section 13(1) of the Commercial Courts Act, 2015 - circumscribes the
right of appeal. He contended that this when read with Section 5 of C
the Arbitration Act, 1996, makes it clear that only certain judgments
and orders are appealable, and no appeal lies under any provision outside
Section 37 of the Arbitration Act, 1996. He contended that the High
Court was manifestly wrong when it said that the present appeal was
appealable under Section 37(1)(c) of the Arbitration Act, 1996 as being D
an appeal against an order refusing to set aside an arbitral award under
Section 34 of the Arbitration Act, 1996. According to Dr. Singhvi, an
order which allows an application under Section 151 read with Order
VII Rule 10 of the CPC can by no stretch of the imagination amount
to an order refusing to set aside an arbitral award under Section 34 of
the Arbitration Act, 1996. For this proposition, he strongly relied upon E
on our judgment in Kandla Export Corporation & Anr. v. M/s OCI
Corporation & Anr. (2018) 14 SCC 715. On the second point, he read
out the impugned judgment in detail, and stated that the ultimate
conclusion that New Delhi was only a “venue” and not the “seat” of
the arbitration was incorrect, as the parties have chosen to have sittings F
at New Delhi, as a result of which it is clear that the Arbitral Tribunal
considered that the award made at New Delhi would be made at “the
seat” of the arbitral proceedings between the parties. He further added
that it was clear that even if both New Delhi and Faridabad had
jurisdiction, New Delhi being the choice of the parties, the principle
contained in Hakam Singh v. M/s. Gammon (India) Ltd., (1971) 1 G
SCC 286, would govern. He referred in copious detail to many
judgments of this Court, including the Five Judge Bench in Bharat
Aluminium Co. (BALCO) v. Kaiser Aluminium Technical
Service, Inc., (2012) 9 SCC 552, Indus Mobile Distribution Private
Limited v. Datawind Innovations Private Limited & Ors., (2017) H
758 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 7 SCC 678, and various other judgments to buttress his submissions.
According to him, the recent judgment delivered in Union of India v.
Hardy Exploration and Production (India) Inc. 2018 SCC Online
SC 1640 queers the pitch, in that it is directly contrary to the Five Judge
bench decision in BALCO (supra). It is only as a result of the confusion
caused by judgments such as Hardy Exploration and Production
B
(India) Inc. (supra) that the impugned judgment has arrived at the
wrong conclusion that New Delhi is not the “seat”, but only the “venue”
of the present arbitral proceedings. He, therefore, in the course of his
submissions argued that this confusion should be removed, and exhorted
us to declare that Hardy Exploration and Production (India) Inc.
C (supra) was not correctly decided, being contrary to the larger bench
in BALCO (supra).
7. Dr. Singhvi in the course of his submissions also referred
pointedly to paragraph 96 of BALCO (supra), and argued that not only
was the example given in the said paragraph contrary to the theory of
D concurrent jurisdiction propounded therein, but was also contrary to
subsequent paragraphs in the said judgment, in which it was clearly held
that a clause in an agreement stating the “seat” of arbitration is akin to
an exclusive jurisdiction clause, which would put paid to any theory of
concurrent jurisdiction. As a matter of fact, two subsequent decisions
E have understood the ratio of BALCO (supra) to be that once the “seat”
is indicated in an arbitration agreement, it is akin to an exclusive
jurisdiction clause, which would oust the jurisdiction of courts other than
courts at the seat. For this purpose he expressly referred to and relied
upon Reliance Industries Ltd. v. Union of India (2014) 7 SCC 603
F and Indus Mobile Distribution Pvt. Ltd. (supra).
8. Shri Arunabh Chowdhury, appearing in SLP (Civil) No. 25848
of 2018, argued that unlike the first SLP argued by Dr. Singhvi, in his
case, the Notice for Arbitration was sent to the Assam site-office of
the Respondent, and not routed through the Assam office to be sent to
G the Head Office at Faridabad, thereby making the observations based
on Section 21 of the Arbitration Act,1996 in the impugned judgment
inapplicable on the facts of his case. He supported Dr. Singhvi’s
argument that the appeal filed under Section 37 of the Arbitration Act,
1996 would not be maintainable, and cited several judgments, which
will be dealt with a little later.
H
BGS SGS SOMA JV v. NHPC LTD. 759
[R. F. NARIMAN, J.]

9. Shri Ankit Chaturvedi, appearing in SLP (Civil) No. 28062 of A
2018, stressed one important difference in the facts of his case, which
is, that the arbitral award made in his case expressly referred to Section
31(4) of the Arbitration Act, 1996, and stated that the place of arbitration,
as determined in accordance with Section 20 of the Arbitration Act,
1996, was New Delhi. Therefore, this being the “seat” as determined B
by the Arbitral Tribunal in this case, a challenge under Section 34 of
the Arbitration Act, 1996 could only be made in the courts at New Delhi.
10. Smt. Maninder Acharya, learned Additional Solicitor General,
supported the judgment under appeal. She first argued that the reasoning
of the impugned judgment, that an order passed under Section 151 read C
with Order VII Rule 10 of the CPC would amount to a refusal to set
aside an arbitral award, is correct, and relied heavily upon a Division
Bench judgment of the Delhi High Court in Antrix Corporation Ltd.
v. Devas Multimedia Pvt. Ltd. 2018 SCC Online Del 9338 for this
purpose. On the second point, she argued that the arbitration clause
did not expressly state that either New Delhi or Faridabad was to be D
the seat of the Arbitral Tribunal. Therefore, the arbitration clause only
referred to a convenient venue, and the fact that the sittings were held
at New Delhi, therefore, would not make New Delhi the seat of the
arbitration under Section 20(1) of the Arbitration Act, 1996. According
to her, since the agreements in the present case were signed in E
Faridabad, and since notices were sent by the Petitioners to the
Respondent’s Faridabad office, part of the cause of action clearly arose
in Faridabad, as a result of which the courts in Faridabad would be
clothed with jurisdiction to decide a Section 34 application. She stressed
the fact that in BALCO (supra), even assuming that New Delhi was F
the seat of arbitration, both New Delhi and Faridabad would have
concurrent jurisdiction - New Delhi being a neutral forum in which no
part of the cause of action arose, and Faridabad being a chosen forum
where a part of the cause of action has arisen. When read with Section
42 of the Arbitration Act, 1996, since the Court at Faridabad was first
approached by filing an application under Section 34 of the Arbitration G
Act,1996, that Court alone would have jurisdiction, as a result of which
the impugned judgment ought to be affirmed.
Maintainability of the appeals under Section 37 of the Arbitration
Act, 1996
H
760 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 11. Section 37(1) of the Arbitration Act, 1996 reads as follows:
“37. Appealable Orders.-
(1) An appeal shall lie from the following orders (and from no
others) to the Court authorised by law to hear appeals from
original decrees of the Court passing the order, namely:-
B
(a) refusing to refer the parties to arbitration under
section 8;
(b) granting or refusing to grant any measure under
section 9;
C (c) setting aside or refusing to set aside an arbitral award
under section 34.”
12. Section 13 of the Commercial Courts Act, 2015 reads as
follows:
“13. Appeals from decrees of Commercial Courts and
D Commercial Divisions.-
(1) Any person aggrieved by the judgment or order of a
Commercial Court below the level of a District Judge may appeal
to the Commercial Appellate Court within a period of sixty days
from the date of judgment or order.
E
(1A)Any person aggrieved by the judgment or order of a
Commercial Court at the level of District Judge exercising original
civil jurisdiction or, as the case may be, Commercial Division
Bench of a High Court may appeal to the Commercial Appellate
Division of that High Court within a period of sixty days from
F the date of the judgment of order:
Provided that an appeal shall lie from such orders passed by the
Commercial Division or a Commercial Court that are specifically
enumerated in Order XLIII of the Code of Civil Procedure, 1908
(5 of 1908) as amended by this Act and Section 37 of the
G Arbitration and Conciliation Act, 1996 (26 of 1996).
(2) Notwithstanding anything contained in any other law for the
time being in force or Letters Patent of a High Court, no appeal
shall lie from any other order or decree of a Commercial Division
or Commercial Court otherwise than in accordance with the
H provisions of the Act.”
BGS SGS SOMA JV v. NHPC LTD. 761
[R. F. NARIMAN, J.]

13. The interplay between Section 37 of the Arbitration Act, 1996 A
and Section 13 of the Commercial Courts Act, 2015, has been laid down
in some detail in the judgment in Kandla Export Corporation (supra).
The precise question that arose in Kandla Export Corporation (supra)
was as to whether an appeal, which was not maintainable under Section
50 of the Arbitration Act,1996, is nonetheless maintainable under Section
B
13(1) of the Commercial Courts Act, 2015. In this context, after setting
out various provisions of the Commercial Courts Act, 2015 and the
Arbitration Act, 1996, this Court held:
“13. Section 13(1) of the Commercial Courts Act, with which
we are immediately concerned in these appeals, is in two parts.
C
The main provision is, as has been correctly submitted by Shri
Giri, a provision which provides for appeals from judgments,
orders and decrees of the Commercial Division of the High Court.
To this main provision, an exception is carved out by the
proviso…”
D
14. The proviso goes on to state that an appeal shall lie from
such orders passed by the Commercial Division of the High Court
that are specifically enumerated under Order 43 of the Code of
Civil Procedure Code, 1908, and Section 37 of the Arbitration
Act. It will at once be noticed that orders that are not specifically
enumerated under Order 43 CPC would, therefore, not be E
appealable, and appeals that are mentioned in Section 37 of the
Arbitration Act alone are appeals that can be made to the
Commercial Appellate Division of a High Court.
15. Thus, an order which refers parties to arbitration under
Section 8, not being appealable under Section 37(1)(a), would not F
be appealable under Section 13(1) of the Commercial Courts Act.
Similarly, an appeal rejecting a plea referred to in sub-sections
(2) and (3) of Section 16 of the Arbitration Act would equally
not be appealable under Section 37(2)(a) and, therefore, under
Section 13(1) of the Commercial Courts Act.
G
xxx xxx xxx
20. Given the judgment of this Court in Fuerst Day
Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] , which Parliament
is presumed to know when it enacted the Arbitration Amendment H
762 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Act, 2015, and given the fact that no change was made in Section
50 of the Arbitration Act when the Commercial Courts Act was
brought into force, it is clear that Section 50 is a provision
contained in a self-contained code on matters pertaining to
arbitration, and which is exhaustive in nature. It carries the
negative import mentioned in para 89 of Fuerst Day
B
Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] that appeals which
are not mentioned therein, are not permissible. This being the
case, it is clear that Section 13(1) of the Commercial Courts Act,
being a general provision vis-à-vis arbitration relating to appeals
C arising out of commercial disputes, would obviously not apply to
cases covered by Section 50 of the Arbitration Act.
21. However, the question still arises as to why Section 37 of
the Arbitration Act was expressly included in the proviso to
Section 13(1) of the Commercial Courts Act, which is equally a
D special provision of appeal contained in a self-contained code,
which in any case would be outside Section 13(1) of the
Commercial Courts Act. One answer is that this was done ex
abundanti cautela. Another answer may be that as Section 37
itself was amended by the Arbitration Amendment Act, 2015,
which came into force on the same day as the Commercial
E Courts Act, Parliament thought, in its wisdom, that it was
necessary to emphasise that the amended Section 37 would have
precedence over the general provision contained in Section 13(1)
of the Commercial Courts Act. Incidentally, the amendment of
2015 introduced one more category into the category of
appealable orders in the Arbitration Act, namely, a category
F where an order is made under Section 8 refusing to refer parties
to arbitration. Parliament may have found it necessary to
emphasise the fact that an order referring parties to arbitration
under Section 8 is not appealable under Section 37(1)(a) and
would, therefore, not be appealable under Section 13(1) of the
G Commercial Courts Act. Whatever may be the ultimate reason
for including Section 37 of the Arbitration Act in the proviso to
Section 13(1), the ratio decidendi of the judgment in Fuerst Day
Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,
(2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] would apply, and
this being so, appeals filed under Section 50 of the Arbitration
H Act would have to follow the drill of Section 50 alone.
BGS SGS SOMA JV v. NHPC LTD. 763
[R. F. NARIMAN, J.]

22. This, in fact, follows from the language of Section 50 itself. A
In all arbitration cases of enforcement of foreign awards, it is
Section 50 alone that provides an appeal. Having provided for
an appeal, the forum of appeal is left “to the Court authorised
by law to hear appeals from such orders”. Section 50 properly
read would, therefore, mean that if an appeal lies under the said
provision, then alone would Section 13(1) of the Commercial B
Courts Act be attracted as laying down the forum which will hear
and decide such an appeal.
xxx xxx xxx
27. The matter can be looked at from a slightly different angle. C
Given the objects of both the statutes, it is clear that arbitration
itself is meant to be a speedy resolution of disputes between
parties. Equally, enforcement of foreign awards should take place
as soon as possible if India is to remain as an equal partner,
commercially speaking, in the international community. In point
of fact, the raison d’être for the enactment of the Commercial D
Courts Act is that commercial disputes involving high amounts
of money should be speedily decided. Given the objects of both
the enactments, if we were to provide an additional appeal, when
Section 50 does away with an appeal so as to speedily enforce
foreign awards, we would be turning the Arbitration Act and the E
Commercial Courts Act on their heads. Admittedly, if the amount
contained in a foreign award to be enforced in India were less
than Rs 1 crore, and a Single Judge of a High Court were to
enforce such award, no appeal would lie, in keeping with the
object of speedy enforcement of foreign awards. However, if,
in the same fact circumstance, a foreign award were to be for F
Rs 1 crore or more, if the appellants are correct, enforcement
of such award would be further delayed by providing an appeal
under Section 13(1) of the Commercial Courts Act. Any such
interpretation would lead to absurdity, and would be directly
contrary to the object sought to be achieved by the Commercial G
Courts Act viz. speedy resolution of disputes of a commercial
nature involving a sum of Rs 1 crore and over. For this reason
also, we feel that Section 13(1) of the Commercial Courts Act
must be construed in accordance with the object sought to be
achieved by the Act. Any construction of Section 13 of the
Commercial Courts Act, which would lead to further delay, H
764 SUPREME COURT REPORTS [2019] 17 S.C.R.

A instead of an expeditious enforcement of a foreign award must,
therefore, be eschewed. Even on applying the doctrine of
harmonious construction of both statutes, it is clear that they are
best harmonised by giving effect to the special statute i.e. the
Arbitration Act, vis-à-vis the more general statute, namely, the
Commercial Courts Act, being left to operate in spheres other
B
than arbitration.”
14. Given the fact that there is no independent right of appeal
under Section 13(1) of the Commercial Courts Act, 2015, which merely
provides the forum of filing appeals, it is the parameters of Section 37
of the Arbitration Act,1996 alone which have to be looked at in order
C
to determine whether the present appeals were maintainable. Section
37(1) makes it clear that appeals shall only lie from the orders set out
in sub-clauses (a), (b) and (c) and from no others. The pigeonhole that
the High Court in the impugned judgement has chosen to say that the
appeals in the present cases were maintainable is sub-clause (c).
D According to the High Court, even where a Section 34 application is
ordered to be returned to the appropriate Court, such order would
amount to an order “refusing to set aside an arbitral award under Section
34”.
15. Interestingly, under the proviso to Section 13(1A) of the
E Commercial Courts Act, 2015, Order XLIII of the CPC is also
mentioned. Order XLIII Rule(1)(a) reads as follows:
“1. Appeal from orders.- An appeal shall lie from the following
orders under the provisions of Section 104, namely-
(a)an order under Rule 10 of Order VII returning a plaint to be
F
presented to the proper Court except where the procedure
specified in rule 10A of Order VII has been followed;”
16. This provision is conspicuous by its absence in Section 37 of
the Arbitration Act, 1996, which alone can be looked at for the purpose
of filing appeals against orders setting aside, or refusing to set aside
G awards under Section 34. Also, what is missed by the impugned
judgment is the words “under Section 34”. Thus, the refusal to set aside
an arbitral award must be under Section 34, i.e., after the grounds set
out in Section 34 have been applied to the arbitral award in question,
and after the Court has turned down such grounds. Admittedly, on the
H facts of these cases, there was no adjudication under Section 34 of
BGS SGS SOMA JV v. NHPC LTD. 765
[R. F. NARIMAN, J.]

the Arbitration Act, 1996 - all that was done was that the Special A
Commercial Court at Gurugram allowed an application filed under
Section 151 read with Order VII Rule 10 CPC, determining that the
Special Commercial Court at Gurugram had no jurisdiction to proceed
further with the Section 34 application, and therefore, such application
would have to be returned to the competent court situate at New Delhi.
B
17. Shri Anurabh Chowdhury referred to a number of judgments
in which a well-settled proposition was elucidated, i.e. that an appeal
is a creature of statute, and must either be found within the four corners
of the statute, or not be there be at all. In support thereof, he referred
to Municipal Corporation of Delhi & Ors. v. International
C
Security & Intelligence Agency Ltd. (2004) 3 SCC 250 (at
paragraphs 14 and 15), and Arcot Textile Mills Ltd. v. Regional
Provident Fund Commissioner and Ors. (2013) 16 SCC 1 (at
paragraph 20). He also referred to a recent Delhi High Court judgment
reported as South Delhi Municipal Corporation v. Tech Mahindra
EFA (OS) (Comm.) 3 of 2019, in which the Delhi High Court held that D
an order of a Single Judge, which directed the deposit of 50% of the
awarded amount, would not be appealable under Section 37 of the
Arbitration Act, 1996 read with the Commercial Courts Act, 2015. In
the course of discussion the Delhi High Court said:
“12. In view of the above discussions, we conclude that the E
present appeal is not maintainable. The appellant’s remedy clearly
lies elsewhere. An attempt was made to urge that no litigant can
be deprived of remedy if there is a grievance: ubi jus ibi
remedium; however, that argument is wholly without substance
because an appeal, it has been repeatedly emphasised, is a
specific creation of statute and cannot be claimed as a matter F
of right. This was explained pithily in Ganga Bai v. Vijay Kumar,
(1974) 2 SCC 393, in the following terms:
“There is a basic distinction between the right of suit and the
right of appeal. There is an inherent right in every person to bring
suit of a civil nature and unless the suit is barred by statute one G
may, at one’s peril, bring a suit of one’s choice. It is no answer
to a suit howsoever frivolous the claim, that the law confers no
right to sue. A suit for its maintainability requires no authority of
law and it is enough that no statute bars the suit. But the position
in regard to appeals is quite the opposite. The right of appeal H
766 SUPREME COURT REPORTS [2019] 17 S.C.R.

A inheres in no one and therefore an appeal for its maintainability
must have the clear authority of law. That explains why the right
of appeal is described as a creature of statute.
13. In view of the above discussion, it is held that the present
appeal is plainly not maintainable by virtue of provisions of the
B Commercial Courts Act, 2015; the appeal is therefore dismissed.
No costs.”
18. Shri Chowdhury also referred to another Delhi High Court
judgment reported as Hamanprit Singh Sidhu v. Arcadia Shares &
Stock Brokers Pvt. Ltd 2016 234 DLT 30 (DB), in which a learned
C Single Judge of the Delhi High Court allowed an application for
condonation of delay in filing a Section 34 petition. The Division Bench,
in holding that an appeal against such an order would not be maintainable
under Section 37 of the Arbitration Act, 1996, read with the Commercial
Courts Act, 2015 held:
D “10. Coming to Section 37(1), it is evident that an appeal can lie
from Coming to Section 37(1), it is evident that an appeal can
lie from only the orders specified in clauses (a), (b) or (c). In
other words, an appeal under Section 37 would only be
maintainable against (a) an order refusing to refer the parties to
arbitration under Section 8 of the A&C Act; (b) an order granting
E
or refusing to grant any measure under Section 9 of the A&C
Act; or (c) an order setting aside or refusing to set aside an
arbitral award under Section 34 of the A&C Act. The impugned
order is clearly not relatable to Sections 8 or 9 of the A&C Act.
It was sought to be contended by the learned counsel for the
F appellant that the present appeal would fall within Section 37(1)
(c) which relates to an order “setting aside” or “refusing to set
aside” an arbitral award under Section 34. We are unable to
accept this proposition. By virtue of the impugned order, the
arbitral award dated 10.09.2013 has not been set aside. Nor has
the court, at this stage, refused to set aside the said arbitral award
G
under Section 34 of the A&C Act. In fact, the appellant in whose
favour the award has been made, would only be aggrieved if the
award were to have been set aside in whole or in part. That has
not happened. What the learned single Judge has done is to have
condoned the delay in re-filing of the petition under Section 34.
H This has not, in any way, impacted the award.”
BGS SGS SOMA JV v. NHPC LTD. 767
[R. F. NARIMAN, J.]

19. The reasoning in this judgment commends itself to us, as a A
distinction is made between judgments which either set aside, or refuse
to set aside, an arbitral award after the court applies its mind to Section
34 of the Arbitration Act, 1996, as against preliminary orders of
condonation of delay, which do not in any way impact the arbitral award
that has been assailed.
B
20. However, Smt. Acharya relied heavily upon the Division
Bench judgment of the Delhi High Court in Antrix Corporation Ltd.
(supra). On the facts of that case, on 28.02.2017, a learned Single Judge
of the Delhi High Court ruled that Antrix’s petition under Section 9 of
the Arbitration Act, 1996 before the Bangalore Court was not
maintainable, and that Devas’ petition under Section 9 was maintainable, C
the bar under Section 42 of the Arbitration Act, 1996 being inapplicable.
The order also held that consequently, Antrix’s petition under Section
34 of the Arbitration Act, 1996 before the Bangalore City Civil Court
would not be maintainable, inasmuch as Devas’ petition filed in Delhi
under Section 9 was filed earlier. The learned Single Judge then listed
D
the matter for hearing on merits and directed Antrix to file an affidavit
of an authorised officer, enclosing therewith its audited Balance Sheets,
and Profit and Loss Accounts for the past three years. Antrix then
appealed against this order, to which a preliminary objection was taken,
stating that this appeal would not be maintainable under Section 37 of
the Arbitration Act, 1996. After setting out Section 13 of the Commercial E
Courts Act, 2015 and Sections 37 and 42 of the Arbitration Act, 1996,
the Division Bench noticed Hamanprit Singh Sidhu (supra) in
paragraph 39, without at all adverting to paragraph 10 of the judgment
(which is set out hereinabove). Thereafter, the Court held as follows:
“42. While undeniably, the Learned Single Judge in the impugned F
order has not decided the Section 9 petition finally and had listed
the matter for hearing on merits, Antrix states that the impugned
order is indistinguishable from an order under Section 9. Devas
however, argued that the sequence of events has not been
completed. Antrix should face an adverse order under Section 9
before it can approach this court in appeal. On this issue, G
significant reliance has been placed on the decision of the Madras
High Court in Samson Maritime (supra). In that case, the Court
held:
“Learned counsel appearing for the respondent made an
attempt to contend that the application seeking for furnishing H
768 SUPREME COURT REPORTS [2019] 17 S.C.R.

A of details of assets cannot be construed as an interim
measure or interim relief contemplated under section 9 of the
said Act. I am not convinced to accept the said contention
for the reason that those details are sought for by the
applicant only to seek for consequential or follow up relief
in the event of the respondent’s failure to furnish securities.
B
Therefore, as the relief sought for in this application is having
a direct bearing on the relief sought for in the other
applications seeking for furnishing securities, it cannot be
said that this relief seeking for details of the assets is outside
the scope of Section 9. Therefore, I find that the application
C filed seeking for details of the assets is also maintainable.”
43. The Court in Samson Maritime (supra) reasoned that an
application seeking for furnishing of details of assets would also
amount to an interim measure under Section 9, because the
reason that those details are sought are only to seek consequential
D or follow up relief in the event of the respondent’s failure to
furnish securities. Therefore, an order mandating a party to
disclose his assets or file his accounts would also be an interim
measure within the meaning of Section 9. In this case, through
Paragraph 57 of the impugned order, the Learned Single Judge
had directed Antrix to file an affidavit of an authorised officer,
E enclosing therewith its audited balance sheets and profit and loss
accounts for the past three years. Keeping in mind the view of
the Court in Samson Maritime (supra), which this Court is in
agreement with, this would also in effect be a Section 9 order
as those details are sought for the purpose of adjudicating
F whether consequential relief could be given to Devas of securing
the amount due from the arbitral award against Antrix. Moreover,
this Court cannot take a doctrinaire and unbending approach in
this matter, when it is clear that Antrix has suffered all but one
remaining blow through the impugned order, and therefore, the
Court should not wait till it suffers the final blow (that of the final
G Section 9 order) before it can assume jurisdiction over the appeal.
The court’s direction to Antrix furnish an affidavit along with the
particulars sought, is to aid its order with respect to a possible
distraint, attachment or further such consequential order towards
interim relief. Such an order would not be made unless the court
H directs this as a prelude, or important step towards the inevitable
BGS SGS SOMA JV v. NHPC LTD. 769
[R. F. NARIMAN, J.]

interim order, which would be just consequential. Therefore, the A
Court finds that Antrix’s appeal against the impugned order is
maintainable.
44. This court also finds merit in Antrix’s argument that as
regards the single judge’s observations that the Bangalore court
cannot proceed with the matter, the impugned order is really final. B
It precludes in effect, Antrix from proceeding with its Section
34 petition before that court (in turn based on the pending Section
9 petition before that court). If Antrix were to accept the ruling,
the effect would be to denude the Bangalore court of jurisdiction.
It was contended-and correctly, in this court’s opinion that C
whereas a court acts within jurisdiction in deciding whether it
has or does not have jurisdiction over a cause of a matter, the
declaration by it about the lack of jurisdiction of another court,
based on the appreciation of the matter before the latter court is
undeniably an adverse order. Allowing that to stand would
prejudice Antrix for all times.” D
21. It can be seen that the reasoning in this judgment would have
no application to the facts of the present case. The Division Bench held
that directing Antrix to file an affidavit, enclosing therewith its audited
Balance Sheets and Profit and Loss Account for the last three years,
is itself an interim order passed under Section 9 of the Arbitration Act, E
1996. The further reasoning of the Court that the direction to Antrix to
furnish an affidavit is to aid a future interim order, which would be just
consequential, does not commend itself to us. A step towards an interim
order would not amount to granting, or refusing to grant, any measure
under Section 9 of the Arbitration Act, 1996. The case is also F
distinguishable for the reason that, as regards the Bangalore Court,
which cannot proceed further with the matter, the impugned order
therein is really final and would, therefore, also be appealable under
Section 37. For all these reasons, this judgment is wholly distinguishable
and would not apply to the facts of the present case. We may also
G
advert to the fact that our judgment in Kandla (supra) was delivered
on 07.02.2018, and was missed by the Division Bench in Antrix
Corporation Ltd. (supra), as the Division Bench had reserved
judgment on 06.12.2017, even though it ultimately pronounced the
judgment on 30.05.2018. The judgment in South Delhi Municipal
Corporation (supra) was decided after reference was made to H
770 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Kandla (supra), resulting in a deposit order being held to be not
appealable under Section 37 of the Arbitration Act, 1996.
22. It is clear, therefore, that the appeals filed in the present case
do not fall within Section 37 of the Arbitration Act,1996 and are not
maintainable.
B
23. We now examine the second part of the challenge made by
the Petitioners to the impugned judgment, which relates to the
determination of the “seat” of the arbitral proceedings between the
parties. The impugned judgment of the Punjab and Haryana High Court
referred to BALCO (supra) and Indus Mobile Distribution Pvt.
C Ltd. (supra), and other judgments of this Court, in order to arrive at
the conclusion that the arbitration clause in the present case does not
refer to the “seat” of arbitration, but only refers to the “venue” of
arbitration. Consequently, the impugned judgment holds that since a part
of the cause of action had arisen in Faridabad, and the Faridabad
D Commercial Court was approached first, the Faridabad Court alone
would have jurisdiction over the arbitral proceedings, and the courts at
New Delhi would have no such jurisdiction. The correctness of these
propositions has been vehemently assailed before us, and it is therefore
important to lay down the law on what constitutes the “juridical seat”
of arbitral proceedings, and whether, once the seat is delineated by the
E arbitration agreement, courts at the place of the seat would alone
thereafter have exclusive jurisdiction over the arbitral proceedings.
The juridical seat of the arbitral proceedings
24. The Arbitration Act, 1940 did not refer to the “juridical seat”
F of the arbitral proceedings at all. Under the scheme of the Arbitration
Act, 1940, Section 14 stated as follows:
“14. Award to be signed and filed.-
(1) When the arbitrators or umpire have made their award,
they shall sign it and shall give notice in writing to the
G parties of the making and signing thereof and of the
amount of fees and charges payable in respect of the
arbitration and award.
(2) The arbitrators or umpire shall, at the request of any
party to the arbitration agreement or any person claiming
H under such party or if so directed by the Court and upon
BGS SGS SOMA JV v. NHPC LTD. 771
[R. F. NARIMAN, J.]

payment of the fees and charges due in respect of the A
arbitration and award and of the costs and charges of
filing the award, cause the award or a signed copy of
it, together with any depositions and documents which
may have been taken and proved before them, to be
filed in Court, and the Court shall thereupon give notice
B
to the parties of the filing of the award.
(3) Where the arbitrators or umpire state a special case
under clause (b) of Section 13, the Court, after giving
notice to the parties and hearing them, shall pronounce
its opinion thereon and such opinion shall be added to,
C
and shall form part of, the award.
25. When the award was signed and filed in Court, a judgment
in terms of the award had then to be made as follows:
“17. Judgment in terms of award.- Where the Court sees no
cause to remit the award or any of the matters referred to D
arbitration for reconsideration or to set aside the award, the Court
shall, after the time for making an application to set aside the
award has expired, or such application having been made, after
refusing it, proceed to pronounce judgement according to the
award, and upon the judgment so pronounced a decree shall
follow, and no appeal shall lie from such a decree except on the E
ground that it is in excess of, or not otherwise in accordance with,
the award.”
26. It was in this setting that “Court” was defined by Section
2(c) of the Arbitration Act, 1940 as follows:
F
“2. Definitions.- In this Act, unless there is anything repugnant
in the subject or the context,
xxx xxx xxx
(c)“Court” means a Civil Court having jurisdiction to decide the
questions forming the subject-matter of the reference if the same G
had been the subject-matter of a suit, but does not, except for
the purpose of arbitration proceedings under Section 21, include
a Small Cause Court;”
27. Section 31, which dealt with the Court in which an award
may be filed then stated as follows: H
772 SUPREME COURT REPORTS [2019] 17 S.C.R.

A “31. Jurisdiction.
(1) Subject to the provisions of this Act, an award may be
filed in any Court having jurisdiction in the matter to
which the reference relates.
(2) Notwithstanding anything contained in any other law for
B
the time being in force and save as otherwise provided
in this Act, all questions regarding the validity, effect or
existence of an award or an arbitration agreement
between the parties to the agreement- or persons
claiming under them shall be decided by the Court in
C which the award under the agreement has been, or may
be, filed, and by no other Court.
(3) All applications regarding the conduct of arbitration
proceedings or otherwise arising out of such proceedings
shall be made to the Court where the award has been,
D or may be, filed, and to no other Court.
(4) Notwithstanding anything contained elsewhere in this
Act or in any other law for the time being in force,
where in any reference any application under this Act
has been made in a Court competent to entertain it, that
E Court alone shall have jurisdiction over the arbitration
proceedings-, and all subsequent applications arising, out
of that reference, and the arbitration proceedings shall
be made in that Court and in no other Court.”
28. It will be noticed that in this statutory setting, the “place” in
F which the award is made is not referred to at all. Given this fact, the
“Court” was defined as any Civil Court having jurisdiction to decide
questions forming the subject matter of the reference to arbitration if
the same had been the subject matter of a suit.
29. The UNCITRAL Model Law on International Commercial
G Arbitration (as adopted by the United Nations Commission on
International Trade Law on 21 June 1985) (hereinafter referred to as
the “UNCITRAL Model Law”) was then adopted by this country. The
UNCITRAL Model Law introduced the concept of “place” or “seat”
of the arbitral proceedings as follows:

H “Article 1. Scope of application
BGS SGS SOMA JV v. NHPC LTD. 773
[R. F. NARIMAN, J.]

xxx xxx xxx A
(2) The provisions of this Law, except articles 8, 9, 35 and 36,
apply only if the place of arbitration is in the territory of this State.
xxx xxx xxx
Article 2. Definitions and rules of interpretation B
xxx xxx xxx
(c) “court” means a body or organ of the judicial system of a
State;
xxx xxx xxx
C
Article 6. Court or other authority for certain functions of
arbitration assistance and supervision
The functions referred to in articles 11(3), 11(4), 13(3), 14, 16(3)
and 34(2) shall be performed by ... [Each State enacting this
model law specifies the court, courts or, where referred to therein,
other authority competent to perform these functions.] D

xxx xxx xxx
Article 20. Place of arbitration
(1) The parties are free to agree on the place of arbitration.
Failing such agreement, the place of arbitration shall be E
determined by the arbitral tribunal having regard to the
circumstances of the case, including the convenience of
the parties.
(2) Notwithstanding the provisions of paragraph (1) of this
article, the arbitral tribunal may, unless otherwise agreed F
by the parties, meet at any place it considers appropriate
for consultation among its members, for hearing
witnesses, experts or the parties, or for inspection of
goods, other property or documents.
xxx xxx xxx
G
Article 31. Form and contents of award
xxx xxx xxx
(3) The award shall state its date and the place of arbitration as
determined in accordance with article 20(1). The award shall be
deemed to have been made at that place.” H
774 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 30. The Arbitration Act, 1996 repealed the Arbitration Act, 1940.
As is stated in its preamble, the Arbitration Act, 1996 adopted provisions
of the UNCITRAL Model Law, as they had made a significant
contribution to the establishment of a unified legal framework for the
fair and efficient settlement of disputes arising in international
commercial relations.
B
31. The Arbitration Act, 1996 refers to “the place” of arbitration
and defines ‘Court’, and indicates which Courts have jurisdiction in
relation to arbitral proceedings in several sections in Part I. Section
2(1)(e) and Section 2(2) of the Arbitration Act, 1996 are as follows:
C “2. Definitions.-
(1) In this Part, unless the context otherwise requires,-
xxx xxx xxx
(e) “Court” means-
D (i) in case of an arbitration other than international
commercial arbitration, the principal Civil Court of
original jurisdiction in a district, and includes the High
Court in exercise of its ordinary original civil jurisdiction,
having jurisdiction to decide the questions forming the
subject-matter of the arbitration if the same had been
E
the subject-matter of a suit, but does not include any
Civil Court of a grade inferior to such principal Civil
Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the
High Court in exercise of its ordinary original civil
F
jurisdiction, having jurisdiction to decide the questions
forming the subject-matter of a suit if the same had been
the subject-matter of a suit, and in other cases, a High
Court having jurisdiction to hear appeals from decrees
of courts subordinate to that High Court;
G xxx xxx xxx
(2) This part shall apply where the place of arbitration is in India.
Provided that subject to an agreement to the contrary, the
provisions of sections 9, 27 and clause (a) of sub-section (1) and
H sub-section (3) of Section 37 shall also apply to international
BGS SGS SOMA JV v. NHPC LTD. 775
[R. F. NARIMAN, J.]

commercial arbitration, even if the place of arbitration is outside A
India, and an arbitral award made or to be made in such place
is enforceable and recognised under the provisions of Part II of
this Act.
32. Sections 20, 31(4) and 42 of the Arbitration Act, 1996 read
as follows: B
“20. Place of Arbitration.-
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), the
place of arbitration shall be determined by the arbitral C
tribunal having regard to the circumstances of the case,
including the convenience of the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the
arbitral tribunal may, unless otherwise agreed by the
parties, meet at any place it considers appropriate for D
consultation among its members, for hearing witnesses,
experts or the parties, or for inspection of documents,
goods or other property.”
“31. Form and contents of arbitral award.-
xxx xxx xxx E
(4) The arbitral award shall state its date and the place of
arbitration as determined in accordance with section 20
and the award shall be deemed to have been made at
that place.”
“42. Jurisdiction.- Notwithstanding anything contained F
elsewhere in this Part or any other law for the time being in
force, where with respect to an arbitration agreement any
application under this Part has been made in any Court, that
Court alone shall have jurisdiction over the arbitral proceedings
and all subsequent applications arising out of that agreement and G
the arbitral proceedings shall be made in that Court and no other
Court.”
33. It will thus be seen that the new provisions contained in
Sections 20 and 31(4) of the Arbitration Act, 1996 are a replication of
Articles 20 and 31(3) of the UNCITRAL Model Law, in which pride H
776 SUPREME COURT REPORTS [2019] 17 S.C.R.

A of place is given to the juridical seat of the arbitral proceedings.
However, the definition of “court” in Section 2(1)(e) of the Arbitration
Act, 1996 continues the definition contained in the Arbitration Act, 1940,
but replaces any and every civil court by only the principal civil court
of original jurisdiction in a district, and includes the High Court in
exercise of its ordinary civil jurisdiction. Section 42 of the Arbitration
B
Act, 1996 also substantially follows the drill of Section 31(4) of the
Arbitration Act, 1940.
34. It can thus be seen that given the new concept of “juridical
seat” of the arbitral proceedings, and the importance given by the
Arbitration Act, 1996 to this “seat”, the arbitral award is now not only
C
to state its date, but also the place of arbitration as determined in
accordance with Section 20. However, the definition of “Court”
contained in Section 2(1)(c) of the Arbitration Act, 1940, continued as
such in the Arbitration Act, 1996, though narrowed to mean only principal
civil court and the High Court in exercise of their original ordinary civil
D jurisdiction. Thus, the concept of juridical seat of the arbitral proceedings
and its relationship to the jurisdiction of courts which are then to look
into matters relating to the arbitral proceedings - including challenges
to arbitral awards - was unclear, and had to be developed in accordance
with international practice on a case by case basis by this Court.
E 35. Some of the early decisions of this Court did not properly
distinguish between “seat” and “venue” of an arbitral proceeding. The
Five Judge Bench in BALCO (supra) dealt with this problem as follows:
“75. We are also unable to accept the submission of the learned
counsel for the appellants that the Arbitration Act, 1996 does not
F make seat of the arbitration as the centre of gravity of the
arbitration. On the contrary, it is accepted by most of the experts
that in most of the national laws, arbitrations are anchored to the
seat/place/situs of arbitration. Redfern in Para 3.54 concludes that
“the seat of the arbitration is thus intended to be its centre
of gravity.” [Blackaby, Partasides, Redfern and Hunter
G
(Eds.), Redfern and Hunter on International Arbitration (5th
Edn., Oxford University Press, Oxford/New York 2009).] This,
however, does not mean that all the proceedings of the arbitration
have to take place at the seat of the arbitration. The arbitrators
at times hold meetings at more convenient locations. This is
H necessary as arbitrators often come from different countries. It
BGS SGS SOMA JV v. NHPC LTD. 777
[R. F. NARIMAN, J.]

may, therefore, on occasions be convenient to hold some of the A
meetings in a location which may be convenient to all. Such a
situation was examined by the Court of Appeal in England
in Naviera Amazonica Peruana S.A. v. Compania
International de Seguros del Peru [(1988) 1 Lloyd’s Rep 116
(CA)] wherein at p. 121 it is observed as follows:
B
“The preceding discussion has been on the basis that there is
only one ‘place’ of arbitration. This will be the place chosen
by or on behalf of the parties; and it will be designated in the
arbitration agreement or the terms of reference or the minutes
of proceedings or in some other way as the place or ‘seat’
of the arbitration. This does not mean, however, that the C
Arbitral Tribunal must hold all its meetings or hearings at the
place of arbitration. International commercial arbitration often
involves people of many different nationalities, from many
different countries. In these circumstances, it is by no means
unusual for an Arbitral Tribunal to hold meetings—or even D
hearings—in a place other than the designated place of
arbitration, either for its own convenience or for the
convenience of the parties or their witnesses…. It may be
more convenient for an Arbitral Tribunal sitting in one country
to conduct a hearing in another country — for instance, for
the purpose of taking evidence…. In such circumstances each E
move of the Arbitral Tribunal does not of itself mean that the
seat of arbitration changes. The seat of arbitration remains
the place initially agreed by or on behalf of the parties.”
76. It must be pointed out that the law of the seat or place where
the arbitration is held, is normally the law to govern that F
arbitration. The territorial link between the place of arbitration
and the law governing that arbitration is well established in the
international instruments, namely, the New York Convention of
1958 and the UNCITRAL Model Law of 1985. It is true that
the terms “seat” and “place” are often used interchangeably. G
In Redfern and Hunter on International Arbitration
[Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and
Hunter on International Arbitration (5th Edn., Oxford
University Press, Oxford/New York 2009).] (Para 3.51), the seat
theory is defined thus: “The concept that an arbitration is governed
by the law of the place in which it is held, which is the ‘seat’ (or H
778 SUPREME COURT REPORTS [2019] 17 S.C.R.

A ‘forum’ or locus arbitri) of the arbitration, is well established in
both the theory and practice of international arbitration. In fact,
the Geneva Protocol, 1923 states:
“2. The arbitral procedure, including the constitution of the
Arbitral Tribunal, shall be governed by the will of the parties
B and by the law of the country in whose territory the arbitration
takes place.”
The New York Convention maintains the reference to “the law
of the country where the arbitration took place” [Article V(1)(d)]
and, synonymously to “the law of the country where the award
C is made” [Articles V(1)(a) and (e)]. The aforesaid observations
clearly show that the New York Convention continues the clear
territorial link between the place of arbitration and the law
governing that arbitration. The author further points out that this
territorial link is again maintained in the Model Law which
provides in Article 1(2) that:
D
“1. (2) the provision of this Law, except Articles 8, 9, 35 and
36, apply only if the place of arbitration is in the territory of
the State.”
Just as the Arbitration Act, 1996 maintains the territorial link
E between the place of arbitration and its law of arbitration, the
law in Switzerland and England also maintain a clear link between
the seat of arbitration and the lex arbitri. The Swiss Law states:
“176(I). (1) The provision of this chapter shall apply to any
arbitration if the seat of the Arbitral Tribunal is in
F Switzerland and if, at the time when the arbitration agreement
was concluded, at least one of the parties had neither its domicile
nor its habitual residence in Switzerland.” [See the Swiss Private
International Law Act, 1987, Ch. 12, Article 176 (I)(1).]
These observations were subsequently followed in Union of
India v. McDonnell Douglas Corpn. [(1993) 2 Lloyd’s Rep 48]
G
xxx xxx xxx
95. Learned Counsel for the Appellants have submitted that
Section 2(1)(e), Section 20 and Section 28 read with Section 45
and Section 48(1)(e) make it clear that Part I is not limited only
H to arbitrations which take place in India. These provisions indicate
BGS SGS SOMA JV v. NHPC LTD. 779
[R. F. NARIMAN, J.]

that Arbitration Act, 1996 is subject matter centric and not A
exclusively seat centric. Therefore, “seat” is not the “centre of
gravity” so far as the Arbitration Act, 1996 is concerned. We
are of the considered opinion that the aforesaid provisions have
to be interpreted by keeping the principle of territoriality at the
forefront. We have earlier observed that Section 2(2) does not
B
make Part I applicable to arbitrations seated or held outside India.
In view of the expression used in Section 2(2), the maxim
expressum facit cessare tacitum, would not permit by
interpretation to hold that Part I would also apply to arbitrations
held outside the territory of India. The expression “this Part shall
apply where the place of arbitration is in India” necessarily C
excludes application of Part I to arbitration seated or held outside
India. It appears to us that neither of the provisions relied upon
by the Learned Counsel for the Appellants would make any
section of Part I applicable to arbitration seated outside India. It
will be apposite now to consider each of the aforesaid provisions
D
in turn.
96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under:
“2. Definitions
(1) In this Part, unless the context otherwise requires
E
(e) “Court” means the principal Civil Court of original jurisdiction
in a district, and includes the High Court in exercise of its
ordinary original civil jurisdiction, having jurisdiction to decide the
questions forming the subject matter of the arbitration if the same
had been the subject matter of a suit, but does not include any
F
civil court of a grade inferior to such principal Civil Court, or any
Court of Small Causes.”
We are of the opinion, the term “subject matter of the arbitration”
cannot be confused with “subject matter of the suit”. The term
“subject matter” in Section 2(1)(e) is confined to Part I. It has a
G
reference and connection with the process of dispute resolution.
Its purpose is to identify the courts having supervisory control
over the arbitration proceedings. Hence, it refers to a court which
would essentially be a court of the seat of the arbitration process.
In our opinion, the provision in Section 2(1)(e) has to be construed
keeping in view the provisions in Section 20 which give H
780 SUPREME COURT REPORTS [2019] 17 S.C.R.

A recognition to party autonomy. Accepting the narrow construction
as projected by the Learned Counsel for the Appellants would,
in fact, render Section 20 nugatory. In our view, the legislature
has intentionally given jurisdiction to two courts i.e. the court
which would have jurisdiction where the cause of action is located
and the courts where the arbitration takes place. This was
B
necessary as on many occasions the agreement may provide for
a seat of arbitration at a place which would be neutral to both
the parties. Therefore, the courts where the arbitration takes
place would be required to exercise supervisory control over the
arbitral process. For example, if the arbitration is held in Delhi,
C where neither of the parties are from Delhi, (Delhi having been
chosen as a neutral place as between a party from Mumbai and
the other from Kolkata) and the tribunal sitting in Delhi passes
an interim order Under Section 17 of the Arbitration Act, 1996,
the appeal against such an interim order under Section 37 must
lie to the Courts of Delhi being the Courts having supervisory
D
jurisdiction over the arbitration proceedings and the tribunal. This
would be irrespective of the fact that the obligations to be
performed under the contract were to be performed either at
Mumbai or at Kolkata, and only arbitration is to take place in
Delhi. In such circumstances, both the Courts would have
E jurisdiction, i.e., the Court within whose jurisdiction the subject
matter of the suit is situated and the courts within the jurisdiction
of which the dispute resolution, i.e., arbitration is located.
xxx xxx xxx
98. We now come to Section 20, which is as under:
F
20. Place of arbitration
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in Sub-section (1), the
place of arbitration shall be determined by the arbitral
G tribunal having regard to the circumstances of the case,
including the convenience of the parties.
(3) Notwithstanding Sub-section (1) or Sub-section (2), the
arbitral tribunal may, unless otherwise agreed by the
parties, meet at any place it considers appropriate for
H consultation among its members, for hearing witnesses,
BGS SGS SOMA JV v. NHPC LTD. 781
[R. F. NARIMAN, J.]

experts or the parties, or for inspection of documents, A
good or other property.”
A plain reading of Section 20 leaves no room for doubt that where
the place of arbitration is in India, the parties are free to agree
to any “place” or “seat” within India, be it Delhi, Mumbai etc.
In the absence of the parties’ agreement thereto, Section 20(2) B
authorizes the tribunal to determine the place/seat of such
arbitration. Section 20(3) enables the tribunal to meet at any place
for conducting hearings at a place of convenience in matters such
as consultations among its members for hearing witnesses,
experts or the parties. C
99. The fixation of the most convenient “venue” is taken care
of by Section 20(3). Section 20, has to be read in the context of
Section 2(2), which places a threshold limitation on the
applicability of Part I, where the place of arbitration is in India.
Therefore, Section 20 would also not support the submission of D
the extra-territorial applicability of Part I, as canvassed by the
Learned Counsel for the Appellants, so far as purely domestic
arbitration is concerned.”
(emphasis supplied)
36. The Court then went on to refer to several English judgments E
and specifically italicised several parts of the judgment in Roger
Shashoua & Ors. v. Mukesh Sharma [2009] EWHC 957 (Comm)
as follows:
“110. Examining the fact situation in the case, the Court
F
observed as follows:
The basis for the court’s grant of an anti-suit injunction of the
kind sought depended upon the seat of the arbitration. An
agreement as to the seat of an arbitration brought in the law
of that country as the curial law and was analogous to an
G
exclusive jurisdiction clause. Not only was there agreement
to the curial law of the seat, but also to the Courts of the seat
having supervisory jurisdiction over the arbitration, so that, by
agreeing to the seat, the parties agreed that any challenge to
an interim or final award was to be made only in the courts
of the place designated as the seat of the arbitration. H
782 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Although, ‘venue’ was not synonymous with ‘seat’, in an
arbitration clause which provided for arbitration to be conducted
in accordance with the Rules of the ICC in Paris (a supranational
body of rules), a provision that ‘the venue of arbitration shall be
London, United Kingdom’ did amount to the designation of a
juridical seat...”
B
In Paragraph 54, it is further observed as follows:
There was a little debate about the possibility of the issues relating
to the alleged submission by the claimants to the jurisdiction of
the High Court of Delhi being heard by that court, because it
C was best fitted to determine such issues under Indian Law. Whilst
I found this idea attractive initially, we are persuaded that it would
be wrong in principle to allow this and that it would create undue
practical problems in any event. On the basis of what I have
already decided, England is the seat of the arbitration and
since this carries with it something akin to an exclusive
D jurisdiction clause, as a matter of principle the foreign court
should not decide matters which are for this Court to decide
in the context of an anti-suit injunction.
In making the aforesaid observations, the Court relied on
judgments of the Court of Appeal in C v. D (2007) EWCA Civ
E 1282 (CA).”
(emphasis in original)
37. Finally, the conclusion drawn in paragraph 116 was as follows:
“116. The legal position that emerges from a conspectus of all
F the decisions, seems to be, that the choice of another country as
the seat of arbitration inevitably imports an acceptance that the
law of that country relating to the conduct and supervision of
arbitrations will apply to the proceedings
38. Also, in paragraph 123, the Court held as follows:
G
“123. Thus, it is clear that the regulation of conduct of arbitration
and challenge to an award would have to be done by the courts
of the country in which the arbitration is being conducted. Such
a court is then the supervisory court possessed of the power to
annul the award. This is in keeping with the scheme of the
H international instruments, such as the Geneva Convention and the
BGS SGS SOMA JV v. NHPC LTD. 783
[R. F. NARIMAN, J.]

New York Convention as well as the UNCITRAL Model Law. It A
also recognises the territorial principle which gives effect to the
sovereign right of a country to regulate, through its national courts,
an adjudicatory duty being performed in its own country. By way
of a comparative example, we may reiterate the observations
made by the Court of Appeal, England in C v. D [2008 Bus LR
B
843 : 2007 EWCA Civ 1282 (CA)] wherein it is observed that:
“It follows from this that a choice of seat for the
arbitration must be a choice of forum for remedies seeking
to attack the award.”
In the aforesaid case, the Court of Appeal had approved the C
observations made in A v. B [(2007) 1 All ER (Comm) 591 :
(2007) 1 Lloyd’s Rep 237] wherein it is observed that:
“… an agreement as to the seat of an arbitration is
analogous to an exclusive jurisdiction clause. Any claim
for a remedy … as to the validity of an existing interim D
or final award is agreed to be made only in the courts of
the place designated as the seat of arbitration.”
39. The Court then concluded in paragraph 194 as follows:
194. In view of the above discussion, we are of the considered
opinion that the Arbitration Act, 1996 has accepted the E
territoriality principle which has been adopted in
the UNCITRAL Model Law. Section 2(2) makes a declaration that
Part I of the Arbitration Act, 1996 shall apply to all arbitrations
which take place within India. We are of the considered opinion
that Part I of the Arbitration Act, 1996 would have no application F
to international commercial arbitration held outside India.
Therefore, such awards would only be subject to the jurisdiction
of the Indian courts when the same are sought to be enforced
in India in accordance with the provisions contained in Part II
of the Arbitration Act, 1996. In our opinion, the provisions
contained in the Arbitration Act, 1996 make it crystal clear that G
there can be no overlapping or intermingling of the provisions
contained in Part I with the provisions contained in Part II of
the Arbitration Act, 1996.
40. A reading of paragraphs 75, 76, 96, 110, 116, 123 and 194 of
BALCO (supra) would show that where parties have selected the seat H
784 SUPREME COURT REPORTS [2019] 17 S.C.R.

A of arbitration in their agreement, such selection would then amount to
an exclusive jurisdiction clause, as the parties have now indicated that
the Courts at the “seat” would alone have jurisdiction to entertain
challenges against the arbitral award which have been made at the seat.
The example given in paragraph 96 buttresses this proposition, and is
supported by the previous and subsequent paragraphs pointed out
B
hereinabove. The BALCO judgment (supra), when read as a whole,
applies the concept of “seat” as laid down by the English judgments
(and which is in Section 20 of the Arbitration Act, 1996), by harmoniously
construing Section 20 with Section 2(1)(e), so as to broaden the definition
of “court”, and bring within its ken courts of the “seat” of the
C arbitration1.
41. However, this proposition is contradicted when paragraph 96
speaks of the concurrent jurisdiction of Courts within whose jurisdiction
the cause of action arises wholly or in part, and Courts within the
jurisdiction of which the dispute resolution i.e. arbitration, is located.
D 42. Paragraph 96 is in several parts. First and foremost, Section
2(1)(e), which is the definition of “Court” under the Arbitration Act,
1996 was referred to, and was construed keeping in view the provisions
in Section 20 of the Arbitration Act, 1996, which give recognition to
party autonomy in choosing the seat of the arbitration proceedings.
E Secondly, the Court went on to state in two places in the said paragraph
that jurisdiction is given to two sets of Courts, namely, those Courts
which would have jurisdiction where the cause of action is located; and
those Courts where the arbitration takes place. However, when it came
to providing a neutral place as the “seat” of arbitration proceedings,

F 1
Section 3 of the English Arbitration Act, 1996 defines “seat” as follows:
“In this Part “the seat of the arbitration” means the juridical seat of the arbitration
designated—
(a) by the parties to the arbitration agreement, or
(b) by any arbitral or other institution or person vested by the parties with powers in
that regard, or
(c) by the arbitral tribunal if so authorised by the parties,
G or determined, in the absence of any such designation, having regard to the parties’
agreement and all the relevant circumstances.”
It will be noticed that this Section closely approximates with Section 20 of the Indian
Arbitration Act, 1996. The meaning of “Court” is laid down in Section 105 of the
English Arbitration Act, 1996 whereby the Lord Chancellor may, by order, make
provision allocating and specifying proceedings under the Act which may go to the
H High Court or to county courts.
BGS SGS SOMA JV v. NHPC LTD. 785
[R. F. NARIMAN, J.]

the example given by the Five Judge Bench made it clear that appeals A
under Section 37 of the Arbitration Act, 1996 against interim orders
passed under Section 17 of the Arbitration Act, 1996 would lie only to
the Courts of the seat - which is Delhi in that example - which are the
Courts having supervisory control, or jurisdiction, over the arbitration
proceedings. The example then goes on to state that this would be
B
irrespective of the fact that the obligations to be performed under the
contract, that is the cause of action, may arise in part either at Mumbai
or Kolkata. The fact that the arbitration is to take place in Delhi is of
importance. However, the next sentence in the said paragraph reiterates
the concurrent jurisdiction of both Courts.
43. This Court has held that judgments of Courts are not to be C
construed as statutes, neither are they to be read as Euclid’s theorems.
All observations made must be read in the context in which they appear.
This was felicitously put in Amar Nath Om Prakash v. State of
Punjab (1985) 1 SCC 345, where this Court stated:
“10. There is one other significant sentence in Sreenivasa D
General Traders v. State of A.P [(1983) 4 SCC 353 : AIR 1983
SC 1246] with which we must express our agreement, It was
said: (SCC p. 377, para 27)
“With utmost respect, these observations of the learned Judge
are not to be read as Euclid’s theorems, nor as provisions of a E
statute. These observations must be read in the context in which
they appear.”
We consider it proper to say, as we have already said in other
cases, that judgments of courts are not to be construed as
statutes. To interpret words, phrases and provisions of a statute, F
it may become necessary for Judges to embark into lengthy
discussions but the discussion is meant to explain and not to
define. Judges interpret statutes, they do not interpret judgments.
They interpret words of statutes; their words are not to be
interpreted as statutes. G
In London Graving Dock Co. Ltd. v. Horton [1951 AC 737,
761 : (1951)-2 All ER 1, 14 (HL)] Lord MacDermott observed:
“The matter cannot, of course, be settled merely by treating
the ipsissima verba of Willes, J., as though they were part of
an Act of Parliament and applying the rules of interpretation H
786 SUPREME COURT REPORTS [2019] 17 S.C.R.

A appropriate thereto. This is not to detract from the great weight
to be given to the language actually used by that most
distinguished Judge....
In Home Office v. Dorset Yacht Co. Ltd. [(1970) 2 All ER 294
: (1970) 2 WLR 1140 : 1970 AC 1004 (HL)] Lord Reid said:
B “Lord Atkin’s speech [Donoghue v. Stevension, 1932 All ER Rep
1, 11 : 1932 AC 562, 580 : 101 LJPC 119 : 147 LT 281 (HL)] ...
is not to be treated as if it was a statutory definition. It will
require qualification in new circumstances.”
Megarry, J. in (1971) 1 WLR 1062 observed:
C
“One must not, of course, construe even a reserved judgment
of even Russell, L.J. as if it were an Act of Parliament.”
And, in Herrington v. British Railways Board [(1972) 2 WLR
537: (1972) 1 All Er 749 : 1972 AC 877 (HL)] Lord Morris said:
“There is always peril in treating the words of a speech or a
D judgment as though they were words in a legislative enactment,
and it is to be remembered that judicial utterances are made in
the setting of the facts of a particular case.”
(emphasis supplied)
44. More recently, this Court in Union of India v. Amrit Lal
E Manchanda (2004) 3 SCC 75 held as follows:
“15. Cases involving challenges to orders of detention before and
after execution of the order stand on different footings. Courts
should not place reliance on decisions without discussing as to
how the factual situation fits in with the fact situation of the
F decision on which reliance is placed. Observations of courts are
neither to be read as Euclid’s theorems nor as provisions of the
statute and that too taken out of their context. These observations
must be read in the context in which they appear to have been
stated. Judgments of courts are not to be construed as statutes.
To interpret words, phrases and provisions of a statute, it may
G become necessary for judges to embark into lengthy discussions
but the discussion is meant to explain and not to define. Judges
interpret statutes, they do not interpret judgments. They interpret
words of statutes; their words are not to be interpreted as
statutes.”
H (emphasis supplied)
BGS SGS SOMA JV v. NHPC LTD. 787
[R. F. NARIMAN, J.]

45. In any case, a judgment must be read as a whole, so that A
conflicting parts may be harmonised to reveal the true ratio of the
judgment. However, if this is not possible, and it is found that the internal
conflicts within the judgment cannot be resolved, then the first endeavour
that must be made is to see whether a ratio decidendi can be culled
out without the conflicting portion. If not, then, as held by Lord Denning
B
in Harper and Ors. v. National Coal Board (1974) 2 All ER 441,
the binding nature of the precedent on the point on which there is a
conflict in a judgment, comes under a cloud.2
2
In Harper (supra), the decision in Central Asbestos Co. Ltd. vs. Dodd (1972) 2 All
ER 1135, a House of Lords judgment, had to be applied. It was found that two learned
Law Lords decided the question of law in favour of Dodd, whereas two learned Law C
Lords decided the question of law against Dodd, stating that his claim was barred. As
Lord Denning stated, the fifth Law Lord, Lord Pearson, was the odd man out, in that
he agreed with the two learned Law Lords that the law did not support Dodd’s case,
but agreed with the minority judges that Dodd’s claim was not barred. This being the
case, Lord Denning spoke of the precedential value of Dodd’s case as follows:
“How then do we stand on the law? We have listened to a most helpful discussion by
Mr. McCullough on the doctrine of precedent. One thing is clear. We can only accept D
a line of reasoning which supports the actual decision of the House of Lords. By no
possibility can we accept any reasoning which would show the decision itself to be
wrong. The second proposition is that if we can discover the reasoning on which the
majority based their decision, then we should accept that as binding upon us. The
third proposition is that, if we can discover the reasoning on which the minority base
their decision, we should reject it. It must be wrong because it led them to the wrong E
result. The fourth proposition is that, if we cannot discover the reasoning on which
the majority based their decision, we are not bound by it. We are free to adopt any
reasoning which appears to us to be correct, so long as it supports the actual decision
of the House.
In support of those propositions, I would refer to the speech of Lord Dunedin in Great
Western Railway Co. v. Owners of S.S. Mostyn [1928] A.C. 57, 73–74, and of Lord
MacDermott in Walsh v. Curry [1955] N.I. 112, 124–125, and of Viscount Simonds F
in Midland Silicones Ltd. v. Scruttons Ltd. [1962] A.C. 446, 468–469. Applying the
propositions to Smith v. Central Asbestos Co. Ltd. [Dodd’s case] [1973] A.C. 518,
the position stands thus: (1) the actual decision of the House in favour of Dodd must
be accepted as correct, We cannot accept any line of reasoning which would show it
to be wrong. We cannot therefore accept the reasoning of a minority of two — Lord
Simon of Glaisdale and Lord Salmon — on the law. It must be wrong because it led
them to the wrong result. (2) We ought to accept the reasoning of the three in the G
majority if we can discover it. But it is not discoverable. The three were divided. Lord
Reid and Lord Morris of Borth-y-Gest took one view of the law. Lord Pearson took
another. We cannot say that Lord Reid and Lard Morris of Borth-y-Gest were correct:
because we know that their reasoning on the law was in conflict with the reasoning
of the other three. We cannot say that Lord Pearson was correct: because we know
that the reasoning which he accepted on the law led the other two (Lord Simon of
H
788 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 46. If paragraphs 75, 76, 96, 110, 116, 123 and 194 of BALCO
(supra) are to be read together, what becomes clear is that Section
2(1)(e) has to be construed keeping in view Section 20 of the Arbitration
Act, 1996, which gives recognition to party autonomy - the Arbitration
Act, 1996 having accepted the territoriality principle in Section 2(2),
B following the UNCITRAL Model Law. The narrow construction of
Section 2(1)(e) was expressly rejected by the Five Judge bench in
BALCO (supra). This being so, what has then to be seen is what is
the effect Section 20 would have on Section 2(1)(e) of the Arbitration
Act, 1996.

C 47. It was not until this Court’s judgment in Indus Mobile
Distribution Private Limited (supra) that the provisions of Section
20 were properly analysed in the light of the 246th Report of the Law
Commission of India titled, ‘Amendments to the Arbitration and
Conciliation Act, 1996’ (August, 2014) (hereinafter referred to as the
“Law Commission Report, 2014”), under which Section 20(1) and (2)
D would refer to the “seat” of the arbitration, and Section 20(3) would
refer only to the “venue” of the arbitration. Given the fact that when
parties, either by agreement or, in default of there being an agreement,
where the arbitral tribunal determines a particular place as the seat of
the arbitration under Section 31(4) of the Arbitration Act, 1996, it
E becomes clear that the parties having chosen the seat, or the arbitral
tribunal having determined the seat, have also chosen the Courts at the
seat for the purpose of interim orders and challenges to the award.
48. This Court in Indus Mobile Distribution Private Limited
(supra), after referring to Sections 2(1)(e) and 20 of the Arbitration Act,
F 1996, and various judgments distinguishing between the “seat” of an
arbitral proceeding and “venue” of such proceeding, referred to the Law
Commission Report, 2014 and the recommendations made therein as
follows:
“17. In amendments to be made to the Act, the Law Commission
G recommended the following:
“Amendment of Section 20

Glaisdale and Lord Salmon) to a wrong conclusion. So we cannot say that any of the
three in the majority was correct. (3) The result is that there is no discernible ratio
among the majority of the House of Lords. In these circumstances I think we are at
H liberty to adopt the reasoning which appears to us to be correct.”
BGS SGS SOMA JV v. NHPC LTD. 789
[R. F. NARIMAN, J.]

In Section 20, delete the word “Place” and add the words “Seat A
and Venue” before the words “of arbitration”.
(i) In Sub-section (1), after the words “agree on the” delete
the word “place” and add words “seat and venue”
(ii) In Sub-section (3), after the words “meet at any” delete
the word “place” and add word “venue”. B

[NOTE: The departure from the existing phrase “place” of
arbitration is proposed to make the wording of the Act consistent
with the international usage of the concept of a “seat” of
arbitration, to denote the legal home of the arbitration. The
amendment further legislatively distinguishes between the “[legal] C
seat” from a “[mere] venue” of arbitration.]
Amendment of Section 31
17. In Section 31
(i) In Sub-section (4), after the words “its date and the” delete D
the word “place” and add the word “seat”.”
18. The amended Act, does not, however, contain the aforesaid
amendments, presumably because the BALCO judgment in no
uncertain terms has referred to “place” as “juridical seat” for
the purpose of Section 2(2) of the Act. It further made it clear E
that Section 20(1) and 20 (2) where the word “place” is used,
refers to “juridical seat”, whereas in Section 20 (3), the word
“place” is equivalent to “venue”. This being the settled law, it
was found unnecessary to expressly incorporate what the
Constitution Bench of the Supreme Court has already done by
F
way of construction of the Act.
19. A conspectus of all the aforesaid provisions shows that the
moment the seat is designated, it is akin to an exclusive jurisdiction
clause. On the facts of the present case, it is clear that the seat
of arbitration is Mumbai and Clause 19 further makes it clear
that jurisdiction exclusively vests in the Mumbai courts. Under G
the Law of Arbitration, unlike the Code of Civil Procedure which
applies to suits filed in courts, a reference to “seat” is a concept
by which a neutral venue can be chosen by the parties to an
arbitration clause. The neutral venue may not in the classical
sense have jurisdiction - that is, no part of the cause of action H
790 SUPREME COURT REPORTS [2019] 17 S.C.R.

A may have arisen at the neutral venue and neither would any of
the provisions of Section 16 to 21 of the Code of Civil Procedure
be attracted. In arbitration law however, as has been held above,
the moment “seat” is determined, the fact that the seat is at
Mumbai would vest Mumbai courts with exclusive jurisdiction for
purposes of regulating arbitral proceedings arising out of the
B
agreement between the parties.
20. It is well settled that where more than one court has
jurisdiction, it is open for parties to exclude all other courts. For
an exhaustive analysis of the case law, see Swastik Gases Private
Limited v. Indian Oil Corporation Limited (2013) 9 SCC 32. This
C was followed in a recent judgment in B.E. Simoese Von Staraburg
Niedenthal and Anr. v. Chhattisgarh Investment Limited: (2015)
12 SCC 225. Having regard to the above, it is clear that Mumbai
courts alone have jurisdiction to the exclusion of all other courts
in the country, as the juridical seat of arbitration is at Mumbai.
D This being the case, the impugned judgment is set aside. The
injunction confirmed by the impugned judgment will continue for
a period of four weeks from the date of pronouncement of this
judgment, so that the Respondents may take necessary steps
Under Section 9 in the Mumbai Court. Appeals are disposed of
accordingly.”
E
This judgment has recently been followed in Brahmani River
Pellets Ltd. v. Kamachi Industries Ltd. 2019 SCC Online SC 929
at paragraph 15.
49. In fact, the Law Commission Report, 2014 also recommended
F an amendment in the definition of “Court” under Section 2(1)(e) of the
Arbitration Act, 1996, so that in the case of international commercial
arbitrations held in India, the High Court alone should be the “Court”
for the purposes of the Arbitration Act, 1996, even where such a High
Court does not exercise ordinary original jurisdiction. The
recommendation made by the Law Commission, which was followed,
G leading to an amendment of the Arbitration Act, 1996, is as follows:
“26. It is recommended that in case of international commercial
arbitrations, where there is a significant foreign element to the
transaction and at least one of the parties is foreign, the relevant
“Court” which is competent to entertain proceedings arising out
H of the arbitration agreement, should be the High Court, even
BGS SGS SOMA JV v. NHPC LTD. 791
[R. F. NARIMAN, J.]

where such a High Court does not exercise ordinary civil A
jurisdiction. It is expected that this would ensure that international
commercial arbitrations, involving foreign parties, will be heard
expeditiously and by commercial oriented judges at the High
Court level…”
Amendment of Section 2 B
1. In Section 2 of the Arbitration and Conciliation Act, 1996
(hereinafter referred to as the principal Act),-
xxx xxx xxx
(ii)In sub-section (1), clause (e), after the words “Court means- C
” add sub-section (i) beginning with the words “in the case of an
arbitration other than international commercial arbitration,” before the
words “the principal Civil Court of original jurisdiction”
In sub-section (1), clause (e) replace sub-clause (ii) by following:
“(ii) in the case of an international commercial arbitration, the D
High Court exercising jurisdiction over the principal Civil Court
of original jurisdiction in a district, and includes the High Court
in exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subject-matter of
the arbitration if the same had been the subject-matter of a suit,
E
but does not include any Court of a grade inferior to such High
Court, or in cases involving grant of interim measures in respect
of arbitrations outside India, the High Court exercising jurisdiction
over the court having jurisdiction to grant such measures as per
the laws of India, and includes the High Court in exercise of its
ordinary original civil jurisdiction.” F
[NOTE: This is to solve the problem of conflict of jurisdiction
that would arise in cases where interim measures are sought in
India in cases of arbitrations seated outside India. This also
ensures that in International Commercial Arbitrations, jurisdiction
is exercised by the High Court, even if such High Court does G
not exercise ordinary original civil jurisdiction.]”
50. The aforesaid amendment carried out in the definition of
“Court” is also a step showing the right direction, namely, that in
international commercial arbitrations held in India, the High Court alone
is to exercise jurisdiction over such proceedings, even where no part H
792 SUPREME COURT REPORTS [2019] 17 S.C.R.

A of the cause of action may have arisen within the jurisdiction of such
High Court, such High Court not having ordinary original jurisdiction.
In such cases, the “place” where the award is delivered alone is looked
at, and the High Court given jurisdiction to supervise the arbitration
proceedings, on the footing of its jurisdiction to hear appeals from
decrees of courts subordinate to it, which is only on the basis of
B
territorial jurisdiction which in turn relates to the “place” where the
award is made. In the light of this important change in the law, Section
2(1)(e)(i) of the Arbitration Act, 1996 must also be construed in the
manner indicated by this judgment.
51. Take the consequence of the opposite conclusion, in the light
C of the facts of a given example, as follows. New Delhi is specifically
designated to be the seat of the arbitration in the arbitration clause
between the parties. Part of the cause of action, however, arises in
several places, including where the contract is partially to be performed,
let us say, in a remote part of Uttarakhand. If concurrent jurisdiction
D were to be the order of the day, despite the seat having been located
and specifically chosen by the parties, party autonomy would suffer,
which BALCO (supra) specifically states cannot be the case. Thus,
if an application is made to a District Court in a remote corner of the
Uttarakhand hills, which then becomes the Court for the purposes of
Section 42 of the Arbitration Act, 1996 where even Section 34
E applications have then to be made, the result would be contrary to the
stated intention of the parties - as even though the parties have
contemplated that a neutral place be chosen as the seat so that the
Courts of that place alone would have jurisdiction, yet, any one of five
other Courts in which a part of the cause of action arises, including
Courts in remote corners of the country, would also be clothed with
F jurisdiction. This obviously cannot be the case. If, therefore, the
conflicting portion of the judgment of BALCO (supra) in paragraph
96 is kept aside for a moment, the very fact that parties have chosen
a place to be the seat would necessarily carry with it the decision of
both parties that the Courts at the seat would exclusively have
jurisdiction over the entire arbitral process.
G
52. In fact, subsequent Division Benches of this Court have
understood the law to be that once the seat of arbitration is chosen, it
amounts to an exclusive jurisdiction clause, insofar as the Courts at that
seat are concerned. In Enercon (India) Ltd. and Ors. v. Enercon
GmbH and Anr. (2014) 5 SCC 1, this Court approved the dictum in
H Roger Shashoua (supra) as follows:
BGS SGS SOMA JV v. NHPC LTD. 793
[R. F. NARIMAN, J.]

“126. Examining the fact situation in the case, the Court A
in Shashoua case [Shashoua v. Sharma, (2009) 2 Lloyd’s Law
Rep 376] observed as follows:
“The basis for the court’s grant of an anti-suit injunction of the
kind sought depended upon the seat of the arbitration. An
agreement as to the seat of an arbitration brought in the law B
of that country as the curial law and was analogous to an
exclusive jurisdiction clause. Not only was there agreement
to the curial law of the seat, but also to the courts of
the seat having supervisory jurisdiction over the arbitration, so
that, by agreeing to the seat, the parties agreed that any
challenge to an interim or final award was to be made only C
in the courts of the place designated as the seat of the
arbitration.
Although, ‘venue’ was not synonymous with ‘seat’, in an
arbitration clause which provided for arbitration to be conducted
in accordance with the Rules of the ICC in Paris (a supranational D
body of rules), a provision that ‘the venue of arbitration shall be
London, United Kingdom’ did amount to the designation of a
juridical seat….”
In para 54, it is further observed as follows:
“There was a little debate about the possibility of the issues E
relating to the alleged submission by the claimants to the
jurisdiction of the High Court of Delhi being heard by that
Court, because it was best fitted to determine such issues
under the Indian law. Whilst I found this idea attractive initially,
we are persuaded that it would be wrong in principle to allow
this and that it would create undue practical problems in F
any event. On the basis of what I have already decided,
England is the seat of the arbitration and since this
carries with it something akin to an exclusive jurisdiction
clause, as a matter of principle the foreign court should
not decide matters which are for this Court to decide in G
the context of an anti-suit injunction.”
53. The Court then concluded:
“138. Once the seat of arbitration has been fixed in India, it would
be in the nature of exclusive jurisdiction to exercise the
supervisory powers over the arbitration...” H
794 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 54. In Reliance Industries Ltd. (supra), this Court held:
“45. In our opinion, it is too late in the day to contend that the
seat of arbitration is not analogous to an exclusive jurisdiction
clause. This view of ours will find support from numerous
judgments of this Court. Once the parties had consciously agreed
B that the juridical seat of the arbitration would be London and
that the arbitration agreement will be governed by the laws of
England, it was no longer open to them to contend that the
provisions of Part I of the Arbitration Act would also be applicable
to the arbitration agreement. This Court in Videocon Industries
C Ltd. [(2011) 6 SCC 161 : (2011) 3 SCC (Civ) 257] has clearly
held as follows: (SCC p. 178, para 33)
“33. In the present case also, the parties had agreed that
notwithstanding Article 33.1, the arbitration agreement contained
in Article 34 shall be governed by laws of England. This
D necessarily implies that the parties had agreed to exclude the
provisions of Part I of the Act. As a corollary to the above
conclusion, we hold that the Delhi High Court did not have the
jurisdiction to entertain the petition filed by the respondents under
Section 9 of the Act and the mere fact that the appellant had
E earlier filed similar petitions was not sufficient to clothe that High
Court with the jurisdiction to entertain the petition filed by the
respondents.”
xxx xxx xxx
55. The effect of choice of seat of arbitration was considered
F by the Court of Appeal in C v. D [2008 Bus LR 843 : (2008) 1
Lloyd’s Law 239 : 2007 EWCA Civ 1282] . This judgment has
been specifically approved by this Court
in Balco [BALCO v. Kaiser Aluminium Technical Services Inc.,
(2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] and reiterated
G in Enercon [Enercon (India) Ltd. v. Enercon GmbH, (2014) 5
SCC 1 : (2014) 3 SCC (Civ) 59 : (2014) 1 ALR 257] .
In C v. D [2008 Bus LR 843 : (2008) 1 Lloyd’s Law 239 : 2007
EWCA Civ 1282] , the Court of Appeal has observed: (Bus LR
p. 851, para 16)
H “Primary conclusion
BGS SGS SOMA JV v. NHPC LTD. 795
[R. F. NARIMAN, J.]

16. I shall deal with Mr Hirst’s arguments in due course but, in A
my judgment, they fail to grapple with the central point at issue
which is whether or not, by choosing London as the seat of the
arbitration, the parties must be taken to have agreed that
proceedings on the award should be only those permitted by
English law. In my view they must be taken to have so agreed
B
for the reasons given by the Judge. The whole purpose of the
balance achieved by the Bermuda form (English arbitration but
applying New York law to issues arising under the policy) is that
judicial remedies in respect of the award should be those
permitted by English law and only those so permitted. Mr Hirst
could not say (and did not say) that English judicial remedies for C
lack of jurisdiction on procedural irregularities under Sections 67
and 68 of the 1996 Act were not permitted; he was reduced to
saying that New York judicial remedies were also permitted.
That, however, would be a recipe for litigation and (what is
worse) confusion which cannot have been intended by the parties. D
No doubt New York law has its own judicial remedies for want
of jurisdiction and serious irregularity but it could scarcely be
supposed that a party aggrieved by one part of an award could
proceed in one jurisdiction and a party aggrieved by another part
of an award could proceed in another jurisdiction. Similarly, in
the case of a single complaint about an award, it could not be E
supposed that the aggrieved party could complain in one
jurisdiction and the satisfied party be entitled to ask the other
jurisdiction to declare its satisfaction with the award. There would
be a serious risk of parties rushing to get the first judgment or
of conflicting decisions which the parties cannot have F
contemplated.”
56. The aforesaid observations in C v. D [2008 Bus LR 843 :
(2008) 1 Lloyd’s Law 239 : 2007 EWCA Civ 1282] were
subsequently followed by the High Court of Justice, Queen’s
Bench Division, Commercial Court (England) in Sulamerica Cia G
Nacional de Seguros SA v. Enesa Engelharia SA —
Enesa [(2013) 1 WLR 102 : 2012 EWCA Civ 638 : 2012 WL
14764] . In laying down the same proposition, the High Court
noticed that the issue in that case depended upon the weight to
be given to the provision in Condition 12 of the insurance policy
that “the seat of the arbitration shall be London, England”. It was H
796 SUPREME COURT REPORTS [2019] 17 S.C.R.

A observed that this necessarily carried with it the English Court’s
supervisory jurisdiction over the arbitration process. It was
observed that:
“this follows from the express terms of the Arbitration Act,
1996 and, in particular, the provisions of Section 2 which
B provide that Part I of the Arbitration Act, 1996 applies where
the seat of the arbitration is in England and Wales or Northern
Ireland. This immediately establishes a strong connection
between the arbitration agreement itself and the law of
England. It is for this reason that recent authorities have laid
stress upon the locations of the seat of the arbitration as an
C important factor in determining the proper law of the
arbitration agreement.””
55. In Indus Mobile Distribution Private Limited and Ors.
(supra), after clearing the air on the meaning of Section 20 of the
Arbitration Act, 1996, the Court in paragraph 19 (which has already
D been set out hereinabove) made it clear that the moment a seat is
designated by agreement between the parties, it is akin to an exclusive
jurisdiction clause, which would then vest the Courts at the “seat” with
exclusive jurisdiction for purposes of regulating arbitral proceedings
arising out of the agreement between the parties.
E 56. Despite the aforesaid judgments of this Court, discordant
notes have been struck by some of the High Courts. In Antrix
Corporation Ltd. (supra), a Division Bench of the Delhi High Court,
after setting out paragraph 96 of BALCO (supra), then followed the
reasoning of judgements of the Bombay High Court, in stating that the
F ratio decidendi of the 5 Judge Bench in BALCO (supra) is that Courts
would have concurrent jurisdiction, notwithstanding the designation of
the seat of arbitration by agreement between the parties. The Delhi
High Court stated:
“52. Having held that the statement in paragraph 96
G of BALCO (supra) would apply to the present case as well, this
court has to examine its legal consequence in light of the law
declared in BALCO (supra). It is important to note that in the said
paragraph (extracted above), the Supreme Court has noted that
Section 2(1)(e) of the Arbitration Act confers jurisdiction to two
courts over the arbitral process - the courts having subject matter
H jurisdiction and the courts of the seat. This is evident both from
BGS SGS SOMA JV v. NHPC LTD. 797
[R. F. NARIMAN, J.]

the substantive holding of the paragraph as well as the example A
given by the Court. The Court notes that “the legislature has
intentionally given jurisdiction to two courts i.e. the court
which would have jurisdiction where the cause of action is
located and the courts where the arbitration takes place.”
This is further reinforced by the example that the Court gave
B
later in the same paragraph. In the example where the parties
are from Mumbai and Kolkata and the obligations under the
contract are to be performed at either Mumbai or Kolkata, and
the parties have designated Delhi as the seat of the arbitration,
in such a situation, both courts would have jurisdiction, i.e. within
whose jurisdiction the subject matter of the suit is situated (either C
Mumbai or Kolkata) and the court within the jurisdiction of which
the dispute resolution, i.e., arbitration is located (which is Delhi).
Moreover, the fact that the court interpreted the term “subject
matter of the suit” in the paragraph, also gives credence to the
interpretation that the court recognized that Section 2(1)(e) gives
D
jurisdiction to both the cause of action courts, and the court at
the seat of the arbitration. If the Court were of the opinion that
only the courts at the seat would have jurisdiction under Section
2(1)(e) and no other court, then it would be wholly unnecessary
for the court to interpret the term “subject matter of the suit”,
since that court would anyway not have jurisdiction. In sum E
therefore, paragraph 96 of BALCO (supra) gives jurisdiction to
both courts at the seat and the courts within whose jurisdiction
the cause of action arises, if the dispute were the subject matter
of a suit. This is what the Bombay High Court in Konkola
Copper Mines (supra) also interpreted BALCO (supra) as
F
holding:
“The Supreme Court held that the provisions of Section
2(1)(e) are purely jurisdictional in nature and can have no
relevance to the question whether any part of the cause of
action has taken place outside India. The observations which
have been extracted above, clearly establish that the Court G
where the arbitration takes place would be required to
exercise supervisory control over the arbitral process. The
Supreme Court has held that Parliament has given
jurisdiction to two courts - the Court which would have
jurisdiction where the cause of action is located and the H
798 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Court where the arbitration takes place. This is evident from
the example which is contained in the above quoted extract
from the decision.”
57. Having so stated, the Division Bench then went on to give a
restricted meaning to Indus Mobile Distribution Private Ltd. (supra)
B in paragraph 56 as follows:
“56. In Datawind (supra), as the facts and the question framed
by the Court in the second paragraph of its decision suggest, the
Court was faced with a situation where the parties had
designated both the seat and specified an exclusive forum
C selection clause. Therefore, its findings have to be interpreted in
that light. In fact, were this Court to find otherwise, and
interpret Datawind (supra) as holding that the designation of seat
alone would amount to an exclusive forum selection clause in
domestic arbitrations, then this would run contrary to the five-
Judge decision in BALCO (supra), which as noticed above, gave
D
jurisdiction under Section 2(1)(e) to two courts - one of which
was the court of the seat, thereby clearly implying that the
designation of a seat would not amount to an exclusive forum
selection clause…”
58. The Court then went on to state:
E
“58. The court is of the opinion that in this case, only if the parties
had designated the seat as New Delhi and also provided an
exclusive forum selection clause in favour of the courts at
New Delhi, could it be said that this court would have exclusive
jurisdiction over all applications filed under the Arbitration Act.
F
Indeed, it is open to parties to an arbitration to designate a
particular forum as the exclusive forum to which all applications
under the Act would lie. This would merely be an exercise of
the right of the parties to choose one among multiple competent
forums as the exclusive forum. This is a clearly permissible
G exercise of the right of party autonomy as held by the Supreme
Court in Swastik Gases v. Indian Oil Corporation Ltd., (2013)
9 SCC 32. Conversely, merely choosing a seat, cannot amount
to exercising such a right of exclusive forum selection.
59. This court is of opinion that, holding otherwise would in effect
H render Section 42 of the Arbitration Act ineffective and useless.
BGS SGS SOMA JV v. NHPC LTD. 799
[R. F. NARIMAN, J.]

Section 42 of the Act presupposes that there is more than one A
competent forum to hear applications under the Arbitration Act,
and hence to ensure efficacy of dispute resolution, this provision
enacts that the court, which is first seized of any such application
under the Act, would be the only court possessing jurisdiction to
hear all subsequent applications. If seat were equivalent to an
B
exclusive forum selection clause in Part-I arbitrations, then every
time parties would designate a seat, that would in effect mean
that Section 42 would have no application. Thus, only those few
situations where parties do not actually designate any seat (and
thus no exclusive competence is conferred on one forum) would
Section 42 have any role. In fact, often, when parties do not C
agree upon a seat in the arbitration agreement, for convenience,
the arbitral tribunal designates a particular seat of the arbitration,
or the agreement vests the discretion in the tribunal to decide
the seat (and not just the “venue”). In all those circumstances
then as well, the decision of the tribunal to agree upon a “seat”
D
would amount to an exclusive jurisdiction clause and Section 42
would have no application. This would dilute Section 42 and
would accordingly, be contrary to Parliamentary intent.
Undoubtedly, in the present case, the parties have only chosen
the seat as New Delhi and have not specified an exclusive forum
selection clause. Therefore, it cannot be said that the courts in E
Delhi have exclusive competence to entertain applications under
the Arbitration Act in the present dispute. The jurisdiction of the
courts where the cause of action arises, which in this case, is
the Bangalore City Civil Court, cannot be said to have been
excluded therefore. Accordingly, question (ii) is also answered
F
in favour of Antrix...”
59. The view of the Delhi High Court in Antrix Corporation
Ltd. (supra), which followed judgments of the Bombay High Court,
does not commend itself to us. First and foremost, it is incorrect to state
that the example given by the Court in paragraph 96 of BALCO (supra)
reinforces the concurrent jurisdiction aspect of the said paragraph. As G
has been pointed out by us, the conclusion that the Delhi as well as the
Mumbai or Kolkata Courts would have jurisdiction in the example given
in the said paragraph is wholly incorrect, given the sentence, “This
would be irrespective of the fact that the obligations to be
performed under the contract were to be performed either at H
800 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Mumbai or at Kolkata, and only arbitration is to take place in
Delhi”. The sentence which follows this is out of sync with this sentence,
and the other paragraphs of the judgment. Thus, BALCO (supra) does
not “unmistakably” hold that two Courts have concurrent jurisdiction,
i.e., the seat Court and the Court within whose jurisdiction the cause
of action arises. What is missed by these High Court judgments is the
B
subsequent paragraphs in BALCO (supra), which clearly and
unmistakably state that the choosing of a “seat” amounts to the choosing
of the exclusive jurisdiction of the Courts at which the “seat” is located.
What is also missed are the judgments of this Court in Enercon (India)
Ltd. (supra) and Reliance Industries (supra).
C 60. Equally, the ratio of the judgment in Indus Mobile
Distribution Private Ltd. (supra), is contained in paragraphs 19 and
20. Two separate and distinct reasons are given in Indus Mobile
Distribution Private Ltd. (supra) for arriving at the conclusion that
the Courts at Mumbai alone would have jurisdiction. The first reason,
D which is independent of the second, is that as the seat of the arbitration
was designated as Mumbai, it would carry with it the fact that Courts
at Mumbai alone would have jurisdiction over the arbitration process.
The second reason given was that in any case, following the Hakam
Singh (supra) principle, where more than one Court can be said to have
jurisdiction, the agreement itself designated the Mumbai Courts as having
E exclusive jurisdiction. It is thus wholly incorrect to state that Indus
Mobile Distribution Private Ltd. (supra) has a limited ratio
decidendi contained in paragraph 20 alone, and that paragraph 19, if
read by itself, would run contrary to the 5 Judge Bench decision in
BALCO (supra).
F 61. Equally incorrect is the finding in Antrix Corporation Ltd.
(supra) that Section 42 of the Arbitration Act, 1996 would be rendered
ineffective and useless. Section 42 is meant to avoid conflicts in
jurisdiction of Courts by placing the supervisory jurisdiction over all
arbitral proceedings in connection with the arbitration in one Court
exclusively. This is why the section begins with a non-obstante clause,
G
and then goes on to state “…where with respect to an arbitration
agreement any application under this Part has been made in a
Court…” It is obvious that the application made under this part to a
Court must be a Court which has jurisdiction to decide such application.
The subsequent holdings of this Court, that where a seat is designated
H in an agreement, the Courts of the seat alone have jurisdiction, would
BGS SGS SOMA JV v. NHPC LTD. 801
[R. F. NARIMAN, J.]

require that all applications under Part I be made only in the Court A
where the seat is located, and that Court alone then has jurisdiction
over the arbitral proceedings and all subsequent applications arising out
of the arbitral agreement. So read, Section 42 is not rendered ineffective
or useless. Also, where it is found on the facts of a particular case
that either no “seat” is designated by agreement, or the so-called “seat”
B
is only a convenient “venue”, then there may be several Courts where
a part of the cause of action arises that may have jurisdiction. Again,
an application under Section 9 of the Arbitration Act, 1996 may be
preferred before a court in which part of the cause of action arises in
a case where parties have not agreed on the “seat” of arbitration, and
before such “seat” may have been determined, on the facts of a C
particular case, by the Arbitral Tribunal under Section 20(2) of the
Arbitration Act, 1996. In both these situations, the earliest application
having been made to a Court in which a part of the cause of action
arises would then be the exclusive Court under Section 42, which would
have control over the arbitral proceedings. For all these reasons, the
D
law stated by the Bombay and Delhi High Courts in this regard is
incorrect and is overruled.
Tests for determination of “seat”
62.The judgments of the English Courts have examined the
concept of the “juridical seat” of the arbitral proceedings, and have laid E
down several important tests in order to determine whether the “seat”
of the arbitral proceedings has, in fact, been indicated in the agreement
between the parties. The judgment of Cooke, J., in Roger Shashoua
(supra), states:
“34. “London Arbitration is a well known phenomenon which is F
often chosen by foreign nationals with a different law, such as
the law of New York, governing the substantive rights of the
parties. This is because of the legislative framework and
supervisory powers of the courts here which many parties are
keen to adopt. When therefore there is an express designation
G
of the arbitration venue as London and no designation of any
alternative place as the seat, combined with a supranational body
of rules governing the arbitration and no other significant contrary
indicia, the inexorable conclusion is, to my mind, that London is
the juridical seat and English law the curial law. In my judgment
it is clear that either London has been designated by the parties H
802 SUPREME COURT REPORTS [2019] 17 S.C.R.

A to the arbitration agreement as the seat of the arbitration, or,
having regard to the parties’ agreement and all the relevant
circumstances, it is the seat to be determined in accordance with
the final fall back provision of section 3 of the arbitration act.”
63. It will thus be seen that wherever there is an express
B designation of a “venue”, and no designation of any alternative place
as the “seat”, combined with a supranational body of rules governing
the arbitration, and no other significant contrary indicia, the inexorable
conclusion is that the stated venue is actually the juridical seat of the
arbitral proceeding.
C 64. In Enercon GmbH v. Enercon (India) Ltd. [2012] EWHC
689, the arbitration clause between the parties read as follows:
“18.3 All proceedings in such arbitration shall be conducted in
English. The venue of the arbitration proceedings shall be London.
The arbitrators may (but shall not be obliged to) award costs and
D reasonable expenses (including reasonable fees of counsel) to
the Party(ies) that substantially prevail on merit. The provisions
of the Indian Arbitration and Conciliation Act, 1996 shall apply.”
65. The Court began its discussion on the “seat” of the arbitration
by referring to Roger Shashoua (supra), and then referring to ‘The
E Conflict of Laws’, Dicey, Morris & Collins, 14th Ed. as follows:
“Moreover, as Cooke J. noted, this conclusion is consistent with
the views expressed in The Conflict of Laws, Dicey, Morris &
Collins, 14th Edition at ¶16–035 where the authors state that the
seat “is in most cases sufficiently indicated by the country chosen
F as the place of the arbitration. For such a choice of place not to
be given effect as a choice of seat, there will need to be clear
evidence that the parties … agreed to choose another seat for
the arbitration and that such a choice will be effective to endow
the courts of that country with jurisdiction to supervise and support
the arbitration” .
G
Apart from the last sentence in clause 18.3 (ie “The provisions
of the Indian Arbitration and Conciliation Act 1996 shall apply”),
it seems to me that the conclusion that London is the “seat” of
any arbitration thereunder is beyond any possible doubt. Thus the
main issue is whether this last sentence is to be regarded as
H “significant contrary indicia” (using the language of Cooke J.)
BGS SGS SOMA JV v. NHPC LTD. 803
[R. F. NARIMAN, J.]

so as to place the “seat” of the arbitration in India. A similar issue A
was considered by Saville J in Union v of India v McDonnell
[1993] 2 Lloyd’s Rep 48 which, of course, pre-dates the English
1996 Act . The arbitration agreement in that case provided as
follows: “In the event of a dispute arising out of or in connection
with this agreement…the same shall be referred to an Arbitration
B
Tribunal…The arbitration shall be conducted in accordance with
the procedure provided in the Indian Arbitration Act of 1940 or
any enactment or modification thereof. The arbitration shall be
conducted in the English language…The seat of the arbitration
proceedings shall be London, United Kingdom.” Saville J
expressed the view that the arguments on both sides were “finely C
balanced” but in effect concluded that the reference to the Indian
Arbitration Act 1940 did not have the effect of changing the
“seat” of the arbitration designated by the parties. Rather, the
phrase referring to the 1940 Act was to be reconciled with the
rest of the clause by reading it as referring to the internal conduct
D
of the arbitration as opposed to the external supervision of the
arbitration by the Courts.”
(emphasis supplied)
66. The Court then held that although the word “venue” is not
synonymous with “seat”, on the facts of that case, London - though E
described as the “venue” - was really the “seat” of the arbitration. This
was for the reason that London was a neutral place in which neither
party worked for gain, and in which no part of the cause of action arose.
It was thus understood to be a neutral place in which the proceedings
could be “anchored”. Secondly, the Court stressed on the expression
“arbitration proceedings” in clause 18.3, which the Court held to be an F
expression which included not just one or more individual hearings, but
the arbitral proceedings as a whole, culminating in the making of an
award. The Court held:
“Second, the language in clause 18.3 refers to the “arbitration
proceedings”. That is an expression which includes not just one G
or more individual or particular hearings but the arbitration
proceedings as a whole including the making of an award. In
other words the parties were anchoring the whole arbitration
process in London right up to and including the making of an
award. The place designated for the making of an award is a H
804 SUPREME COURT REPORTS [2019] 17 S.C.R.

A designation of seat. Moreover the language in clause 18.3 does
not refer to the venue of all hearings “taking place” in London.
Clause 18.3 instead provides that the venue of the arbitration
proceedings “shall be” London. This again suggests the parties
intended to anchor the arbitration proceedings to and in London
rather than simply physically locating the arbitration hearings in
B
London. Indeed in a case where evidence might need to be taken
or perhaps more likely inspected in India it would make no
commercial sense to construe the provision as mandating all
hearings to take place in a physical place as opposed to anchoring
the arbitral process to and in a designated place. All agreements
C including an arbitration agreement should be construed to accord
with business common sense. In my view, there is no business
common sense to construe the arbitration agreement (as
contended for by EIL) in a manner which would simply deprive
the arbitrators of an important discretion that they possess to hear
evidence in a convenient geographical location.
D
Third, Mr Joseph QC submitted that the last sentence of clause
18.3 can be reconciled with the choice of London as the seat.
First, he submitted that it can be read as referring simply to Part
II of the Indian 1996 Act ie the enforcement provisions. Mr Edey
QC’s response was that if that is all the last sentence meant,
E then it would be superfluous. However, I do not consider that
any such superfluity carries much, if any, weight. Alternatively,
Mr Joseph QC submitted that it can be read as referring only to
those provisions of the Indian 1996 Act which were not
inconsistent with the English 1996 Act.”
F (emphasis supplied)
67. The Court then held that the reference to the Indian
Arbitration Act, 1996 would not make London the “venue” and India
the “seat” of the arbitral process for several reasons, including the fact
that in earlier agreements between the same parties, the seat of arbitral
G proceedings was India, which was changed by this agreement to London
- the explanation for this change being to render an award enforceable
in India under the provisions of the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (New York, 1958).
68. In Shagang South-Asia (Hong Kong) Trading Co. Ltd.
H v. Daewoo Logistics [2015] EWHC 194, the Queen’s Bench Division
BGS SGS SOMA JV v. NHPC LTD. 805
[R. F. NARIMAN, J.]

(Commercial Courts) dealt with a ‘Fixture Note’ in which the A
Respondent agreed to charter a vessel to Shangang, China. The Fixture
Note provided:
“Clause 23. ARBITRATION TO BE HELD IN HONGKONG.
ENGLISH LAW TO BE APPLIED.”
69. After referring to Roger Shashoua (supra) and Enercon B
GmbH (supra), the Court held:
“In my judgment the approach adopted in Shashoua v Sharma
and in other cases is appropriate in this case also. An agreement
that the arbitration is ‘to be held in Hong Kong’ would ordinarily
carry with it an implied choice of Hong Kong as the seat of C
the arbitration and of the application of Hong Kong law as the
curial law. Clear words or ‘significant contrary indicia’ are
necessary to establish that some other seat or curial law has
been agreed.”
70. In Process and Indusrial Developments Ltd. v. Nigeria D
[2019] EWHC 2241 the Court was concerned with a dispute that arose
out of a gas supply and processing agreement. The arbitration clause
in that case read as follows:
“The Parties agree that if any difference or dispute arises
between them concerning the interpretation or performance of E
this Agreement and if they fail to settle such difference or dispute
amicably, then a Party may serve on the other a notice
of arbitration under the rules of the Nigerian Arbitration and
Conciliation Act (Cap A18 LFN 2004) which, except as
otherwise provided herein, shall apply to any dispute between such F
Parties under this Agreement. Within thirty (30) days of the notice
of arbitration being issued by the initiating Party, the Parties shall
each appoint an arbitrator and the arbitrators thus appointed by
the Parties shall within fifteen (15) days from the date the
last arbitrator was appointed, appoint a third arbitrator to complete
the tribunal. … G
The arbitration award shall be final and binding upon the Parties.
The award shall be delivered within two months after the
appointment of the third arbitrator or within such extended period
as may be agreed by the Parties. The costs of the arbitration shall
be borne equally by the Parties. Each Party shall, however, bear H
806 SUPREME COURT REPORTS [2019] 17 S.C.R.

A its own lawyers’ fees. The venue of the arbitration shall be
London, England or otherwise as agreed by the Parties.
The arbitration proceedings and record shall be in the English
language.”
71. The Court then held that the gas supply agreement provided
B for the seat of the arbitration to be in London, inter alia, for the
following reasons:
“It is significant that clause 20 refers to the venue ”of
the arbitration” as being London. The arbitration would continue
up to and including the final award. Clause 20 does not refer to
C London as being the venue for some or all of the hearings. It does
not use the language used in s. 16(2) ACA of where the tribunal
may “meet” or may “hear witnesses, experts or the parties”. I
consider that the provision represented an anchoring of the
entire arbitration to London rather than providing that the hearings
should take place there.
D
Clause 20 provides that the venue of the arbitration ”shall be”
London “or otherwise as agreed between the parties”. If the
reference to venue was simply to where the hearings should take
place, this would be an inconvenient provision and one which the
parties are unlikely to have intended. It would mean that hearings
E
had to take place in London, however inconvenient that might
be for a particular hearing, unless the parties agreed otherwise.
The question of where hearings should be conveniently held is,
however, one which the arbitrators ordinarily have the power to
decide, as indeed is envisaged in s. 16(2) ACA. That is likely to
F be a much more convenient arrangement. Clearly if the parties
were in agreement as to where a particular hearing were to take
place, that would be likely to be very influential on
the arbitral tribunal. But if for whatever reason they were not in
agreement, and it is not unknown for parties to arbitration to
become at loggerheads about very many matters, then it is
G convenient for the arbitrators to be able to decide. If that
arrangement was to be displaced it would, in my judgment, have
to be spelled out clearly. Accordingly, the reference to the “venue”
as being London or otherwise as agreed between the parties, is
better read as providing that the seat of the arbitration is to be
H England, unless the parties agree to change it. This would still
BGS SGS SOMA JV v. NHPC LTD. 807
[R. F. NARIMAN, J.]

allow the arbitrators to decide where particular hearings should A
take place, while providing for an anchor to England for
supervisory purposes, unless changed.”
(emphasis supplied)
72. Coming to the judgments of our Courts, this Court in Dozco
B
India (P) Ltd. v. Doosan Infracore Co. Ltd. (2011) 16 SCC 179,
was concerned with the following arbitration clause contained in the
agreement between the parties:
“Article 22. Governing Laws — 22.1: This agreement shall be
governed by and construed in accordance with the laws of The C
Republic of Korea.
Article 23. Arbitration — 23.1: All disputes arising in connection
with this agreement shall be finally settled by arbitration in Seoul,
Korea (or such other place as the parties may agree in writing),
pursuant to the rules of agreement then in force of D
the International Chamber of Commerce.”
73. The Court then held:
“18. In my opinion, there is essential difference between the
clauses referred to in Citation Infowares Ltd. v. Equinox
Corpn. [(2009) 7 SCC 220] as also in Indtel Technical Services E
(P) Ltd. v. W.S. Atkins Rail Ltd. [(2008) 10 SCC 308] on one
hand and Article 23.1 in the present case, on the other. Shri
Gurukrishna Kumar rightly pointed out that the advantage of the
bracketed portion cannot be taken, particularly, in view of the
decision in Naviera Amazonica Peruana S.A. v. Compania F
International de Seguros del Peru [(1988) 1 Lloyd’s Rep 116
(CA)] wherein it was held:
“All contracts which provide for arbitration and contain a foreign
element may involve three potentially relevant systems of law:
(1) the law governing the substantive contract; (2) the law G
governing the agreement to arbitrate and the performance of that
agreement; (3) the law governing the conduct of the arbitration.
In the majority of the cases all three will be the same, but (1)
will often be different from (2) and (3) and occasionally, but rarely,
(2) may also differ from (3).” H
808 SUPREME COURT REPORTS [2019] 17 S.C.R.

A That is exactly the case here. The language of Article 23.1 clearly
suggests that all the three laws are the laws of The Republic of
Korea with the seat of arbitration in Seoul, Korea and the
arbitration to be conducted in accordance with the Rules of the
International Chamber of Commerce.
B 19. In respect of the bracketed portion in Article 23.1, however,
it is to be seen that it was observed in Naviera case [(1988) 1
Lloyd’s Rep 116 (CA)] :
“… It seems clear that the submissions advanced below
confused the legal ‘seat’, etc. of an arbitration with the
C geographically convenient place or places for holding hearings.
This distinction is nowadays a common feature of international
arbitrations and is helpfully explained in Redfern and
Hunter [Ed.: Redfern and Hunter on International Arbitration.]
in the following passage under the heading ‘The Place of
Arbitration’:
D
‘The preceding discussion has been on the basis that there is only
one “place” of arbitration. This will be the place chosen by or
on behalf of the parties; and it will be designated in the arbitration
agreement or the terms of reference or the minutes of
proceedings or in some other way as the place or “seat” of the
E arbitration. This does not mean, however, that the Arbitral
Tribunal must hold all its meetings or hearings at the place of
arbitration. International commercial arbitration often involves
people of many different nationalities, from many different
countries. In these circumstances, it is by no means unusual for
an Arbitral Tribunal to hold meetings — or even hearings — in
F a place other than the designated place of arbitration, either for
its own convenience or for the convenience of the parties or their
witnesses….
It may be more convenient for an Arbitral Tribunal sitting in one
country to conduct a hearing in another country — for instance,
G for the purpose of taking evidence…. In such circumstances,
each move of the Arbitral Tribunal does not of itself mean that
the seat of the arbitration changes. The seat of the arbitration
remains the place initially agreed by or on behalf of the parties.’
These aspects need to be borne in mind when one comes to the
H Judge’s construction of this policy.”
BGS SGS SOMA JV v. NHPC LTD. 809
[R. F. NARIMAN, J.]

It would be clear from this that the bracketed portion in the A
article was not for deciding upon the seat of the arbitration, but
for the convenience of the parties in case they find to hold the
arbitration proceedings somewhere else than Seoul, Korea. The
part which has been quoted above from Naviera Amazonica
Peruana S.A. v. Compania International de Seguros del
B
Peru [(1988) 1 Lloyd’s Rep 116 (CA)] supports this inference.
20. In that view, my inferences are that:
(i) The clear language of Articles 22 and 23 of the
distributorship agreement between the parties in this case
spells out a clear agreement between the parties C
excluding Part I of the Act.
(ii) The law laid down in Bhatia International v. Bulk
Trading S.A. [(2002) 4 SCC 105] and Indtel Technical
Services (P) Ltd. v. W.S. Atkins Rail Ltd. [(2008) 10
SCC 308] , as also in Citation Infowares D
Ltd. v. Equinox Corpn. [(2009) 7 SCC 220] is not
applicable to the present case.
(iii) Since the interpretation of Article 23.1 suggests that the
law governing the arbitration will be Korean Law and
the seat of arbitration will be Seoul in Korea, there will E
be no question of applicability of Section 11(6) of the
Act and the appointment of arbitrator in terms of that
provision.”
74. In Videocon Industries Ltd. v. Union of India (2011) 6
SCC 161, this Court was concerned with an arbitration agreement F
between the parties as follows:
“34.12. Venue and law of arbitration agreement.—The venue of
sole expert, conciliation or arbitration proceedings pursuant to this
article, unless the parties otherwise agree, shall be Kuala Lumpur,
Malaysia, and shall be conducted in the English language. Insofar G
as practicable, the parties shall continue to implement the terms
of this contract notwithstanding the initiation of arbitral
proceedings and any pending claim or dispute. Notwithstanding
the provisions of Article 33.1, the arbitration agreement contained
in this Article 34 shall be governed by the laws of England.” H
810 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 75. Referring to Sections 3 and 53 of the English Arbitration Act,
1996, the Court held:
“20. We shall first consider the question whether Kuala Lumpur
was the designated seat or juridical seat of arbitration and the
same had been shifted to London. In terms of Article 34.12 of
B the PSC entered into by 5 parties, the seat of arbitration was
Kuala Lumpur, Malaysia. However, due to outbreak of epidemic
SARS, the Arbitral Tribunal decided to hold its sittings first at
Amsterdam and then at London and the parties did not object to
this. In the proceedings held on 14-10-2003 and 15-10-2003 at
London, the Arbitral Tribunal recorded the consent of the parties
C for shifting the juridical seat of arbitration to London. Whether
this amounted to shifting of the physical or juridical seat of
arbitration from Kuala Lumpur to London? The decision of this
would depend on a holistic consideration of the relevant clauses
of the PSC.
D 21. Though, it may appear repetitive, we deem it necessary to
mention that as per the terms of agreement, the seat of
arbitration was Kuala Lumpur. If the parties wanted to amend
Article 34.12, they could have done so only by a written
instrument which was required to be signed by all of them.
E Admittedly, neither was there any agreement between the parties
to the PSC to shift the juridical seat of arbitration from Kuala
Lumpur to London nor was any written instrument signed by
them for amending Article 34.12. Therefore, the mere fact that
the parties to the particular arbitration had agreed for shifting of
the seat of arbitration to London cannot be interpreted as anything
F except physical change of the venue of arbitration from Kuala
Lumpur to London.”
76. In Enercon (India) Ltd. (supra), this Court was concerned
with an arbitration clause which stated that the venue shall be in London.
The Court held, on the facts of that case, that since the substantive
G law of the contract, the curial law of the proceedings, and the law
governing the arbitration agreement were all India, the seat would be
India - London only being the venue for holding meetings. The Court
then held, following the Naviera Amazonica Peruana S.A. v.
Compania Internacional De Seguros Del Peru (1988) 1 Lloyd’s
H Rep 116 (CA) case, that the lex fori of the arbitral proceedings, namely,
BGS SGS SOMA JV v. NHPC LTD. 811
[R. F. NARIMAN, J.]

the place in which arbitration is to be held, must be considered to be A
the seat of the arbitral proceedings, other things being equal, as follows:
“100. On the facts of the case, it was observed in Naviera
Amazonica case [Naviera Amazonica Peruana
S.A. v. Compania Internacional De Seguros Del Peru, (1988)
1 Lloyd’s Rep 116 (CA)] that since there was no contest on Law B
1 and Law 2, the entire issue turned on Law 3, “the law governing
the conduct of the arbitration”. This is usually referred to as
the curial or procedural law, or the lex fori. Thereafter, the
Court approvingly quoted the following observation from Dicey
& Morris on the Conflict of Laws (11th Edn.): “English law
does not recognise the concept of a delocalised arbitration or of C
arbitral procedures floating in the transnational firmament,
unconnected with any municipal system of law.” It is further held
that “accordingly every arbitration must have a ‘seat’ or ‘locus
arbitri’ or ‘forum’ which subjects its procedural rules to the
municipal law which is there in force”. The Court thereafter culls D
out the following principle:
“Where the parties have failed to choose the law governing the
arbitration proceedings, those proceedings must be considered,
at any rate prima facie, as being governed by the law of the
country in which the arbitration is held, on the ground that it is E
the country most closely connected with the proceedings.”
The aforesaid classic statement of the conflict of law rules as
quoted in Dicey & Morris on the Conflict of Laws (11th Edn.),
Vol. 1, was approved by the House of Lords in James Miller &
Partners Ltd. v. Whitworth Street Estates (Manchester) F
Ltd. [1970 AC 583 : (1970) 2 WLR 728 : (1970) 1 All ER 796 :
(1970) 1 Lloyd’s Rep 269 (HL)] and Mustill, J. in Black Clawson
International Ltd. v. Papierwerke Waldhof-Aschaffenburg
A.G. [(1981) 2 Lloyd’s Rep 446 at p. 453] , a little later
characterised the same proposition as “the law of the place
where the reference is conducted, the lex fori”. The position of G
law in India is the same.
77. The Court then examined Braes of Doune Wind Farm
(Scotland) v. Alfred McAlpine Business Services Ltd. [2008]
EWHC 436 (TCC) in some detail, and concluded in paragraph 118 as
follows: H
812 SUPREME COURT REPORTS [2019] 17 S.C.R.

A “118. In Braes of Doune [Braes of Doune Wind Farm
(Scotland) Ltd. v. Alfred McAlpine Business Services Ltd.,
[2008] Bus LR D 137 (QBD) : 2008 EWHC 426 (TCC)] ,
detailed examination was undertaken by the Court to discern the
intention of the parties as to whether the place mentioned refers
to venue or the seat of the arbitration. The factual situation in the
B
present case is not as difficult or complex as the parties herein
have only designated London as a venue. Therefore, if one has
to apply the reasoning and logic of Akenhead, J., the conclusion
would be irresistible that the parties have designated India as
the seat. This is even more so as the parties have not agreed
C that the courts in London will have exclusive jurisdiction to
resolve any dispute arising out of or in connection with the
contract, which was specifically provided in Clause 1.4.1 of the
EPC contract examined by Akenhead, J. in Braes of
Doune [Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred
D McAlpine Business Services Ltd., [2008] Bus LR D 137 (QBD)
: 2008 EWHC 426 (TCC)] . In the present case, except for
London being chosen as a convenient place/venue for holding the
meetings of the arbitration, there is no other factor connecting
the arbitration proceedings to London.”
78. The Court then made a reference to C v. D [2007] EWCA
E
Civ. 182, where the Court, following C v. D (supra), held:
“122. Longmore, J. of the Court of Appeal observed: (C v. D
case [[2008] Bus LR 843 : 2007 EWCA Civ 1282] , Bus LR p.
851, paras 16-17)
F “16. I shall deal with Mr Hirst’s arguments in due course but, in
my judgment, they fail to grapple with the central point at issue
which is whether or not, by choosing London as the seat of the
arbitration, the parties must be taken to have agreed that
proceedings on the award should be only those permitted by
English law. In my view they must be taken to have so agreed
G
for the reasons given by the Judge. The whole purpose of the
balance achieved by the Bermuda Form (English arbitration but
applying New York law to issues arising under the policy) is that
judicial remedies in respect of the award should be those
permitted by English law and only those so permitted. Mr Hirst
H could not say (and did not say) that English judicial remedies for
BGS SGS SOMA JV v. NHPC LTD. 813
[R. F. NARIMAN, J.]

lack of jurisdiction on procedural irregularities under Sections 67 A
and 68 of the Indian Arbitration Act, 1996 were not permitted;
he was reduced to saying that New York judicial remedies
were also [Ed.: The word “also” has been emphasised in
original.] permitted. That, however, would be a recipe for litigation
and (what is worse) confusion which cannot have been intended
B
by the parties. No doubt New York law has its own judicial
remedies for want of jurisdiction and serious irregularity but it
could scarcely be supposed that a party aggrieved by one part
of an award could proceed in one jurisdiction and a party
aggrieved by another part of an award could proceed in another
jurisdiction. Similarly, in the case of a single complaint about an C
award, it could not be supposed that the aggrieved party could
complain in one jurisdiction and the satisfied party be entitled to
ask the other jurisdiction to declare its satisfaction with the award.
There would be a serious risk of parties rushing to get the first
judgment or of conflicting decisions which the parties cannot have
D
contemplated.
17. It follows from this that a choice of seat for the arbitration
must be a choice of forum for remedies seeking to attack the
award.”
On the facts of the case, the Court held that the seat of the E
arbitration was in England and accordingly entertained the
challenge to the award.”
79. Reference was made to Roger Shashoua (supra) in
paragraphs 124 to 128, and then to various other judgments, including
BALCO (supra), as follows: F
“134. It is accepted by most of the experts in the law relating
to international arbitration that in almost all the national laws,
arbitrations are anchored to the seat/place/situs of
arbitration. Redfern and Hunter on International
Arbitration (5th Edn., Oxford University Press, Oxford/New G
York 2009), in Para 3.54 concludes that “the seat of the
arbitration is thus intended to be its centre of gravity”.
In B AL C O [Bharat Aluminium Co. v. Kaiser Aluminium
Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ)
810] , it is further noticed that this does not mean that all
proceedings of the arbitration are to be held at the seat of H
814 SUPREME COURT REPORTS [2019] 17 S.C.R.

A arbitration. The arbitrators are at liberty to hold meetings at a
place which is of convenience to all concerned. This may
become necessary as arbitrators often come from different
countries. Therefore, it may be convenient to hold all or some
of the meetings of the arbitration in a location other than where
the seat of arbitration is located. In BALCO, the relevant passage
B
from Redfern and Hunter has been quoted which is as under:
(SCC p. 598, para 75)
“75. … ‘The preceding discussion has been on the basis that
there is only one “place” of arbitration. This will be the place
chosen by or on behalf of the parties; and it will be designated
C in the arbitration agreement or the terms of reference or the
minutes of proceedings or in some other way as the place or
“seat” of the arbitration. This does not mean, however, that the
Arbitral Tribunal must hold all its meetings or hearings at the place
of arbitration. International commercial arbitration often involves
D people of many different nationalities, from many different
countries. In these circumstances, it is by no means unusual for
an Arbitral Tribunal to hold meetings—or even hearings—in a
place other than the designated place of arbitration, either for its
own convenience or for the convenience of the parties or their
witnesses…. It may be more convenient for an Arbitral Tribunal
E sitting in one country to conduct a hearing in another country —
for instance, for the purpose of taking evidence…. In such
circumstances each move of the Arbitral Tribunal does not of
itself mean that the seat of arbitration changes. The seat of
arbitration remains the place initially agreed by or on behalf of
F the parties.’ (Naviera case [Naviera Amazonica Peruana
S.A. v. Compania Internacional De Seguros Del Peru, (1988)
1 Lloyd’s Rep 116 (CA)] , Lloyd’s Rep p. 121)”
These observations have also been noticed in Union of
India v. McDonnell Douglas Corpn. [(1993) 2 Lloyd’s Rep
G 48]”
80. The Court finally concluded:
“135. In the present case, even though the venue of arbitration
proceedings has been fixed in London, it cannot be presumed that
the parties have intended the seat to be also in London. In an
H international commercial arbitration, venue can often be different
BGS SGS SOMA JV v. NHPC LTD. 815
[R. F. NARIMAN, J.]

from the seat of arbitration. In such circumstances, the hearing A
of the arbitration will be conducted at the venue fixed by the
parties, but this would not bring about a change in the seat
of the arbitration. This is precisely the ratio in Braes of
Doune [Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred
McAlpine Business Services Ltd., [2008] Bus LR D 137 (QBD)
B
: 2008 EWHC 426 (TCC)] . Therefore, in the present case, the
seat would remain in India.”
81. In Harmony Innovation Shipping Ltd. v. Gupta Coal
India Ltd. and Anr. (2015) 9 SCC 172, the Court dealt with an
arbitration clause between the parties which read as follows:
C
“5. If any dispute or difference should arise under this charter,
general average/arbitration in London to apply, one to be
appointed by each of the parties hereto, the third by the two so
chosen, and their decision or that of any two of them, shall be
final and binding, and this agreement may, for enforcing the same,
be made a rule of court. Said three parties to be commercial men D
who are the members of the London Arbitrators Association. This
contract is to be governed and construed according to the English
law. For disputes where total amount claimed by either party does
not exceed US $50,000 the arbitration should be conducted in
accordance with small claims procedure of the London Maritime E
Arbitration Association.”
82. After referring, in extenso, to a large number of English
decisions and the decisions of this Court, the Court concluded:
“48. In the present case, the agreement stipulates that the
contract is to be governed and construed according to the English F
law. This occurs in the arbitration clause. Mr Viswanathan,
learned Senior Counsel, would submit that this part has to be
interpreted as a part of “curial law” and not as a “proper law”
or “substantive law”. It is his submission that it cannot be
equated with the seat of arbitration. As we perceive, it forms as G
a part of the arbitration clause. There is ample indication through
various phrases like “arbitration in London to apply”, arbitrators
are to be the members of the “London Arbitration Association”
and the contract “to be governed and construed according to the
English law”. It is worth noting that there is no other stipulation
relating to the applicability of any law to the agreement. There H
816 SUPREME COURT REPORTS [2019] 17 S.C.R.

A is no other clause anywhere in the contract. That apart, it is also
postulated that if the dispute is for an amount less than US
$50,000 then, the arbitration should be conducted in accordance
with small claims procedure of the London Maritime Arbitration
Association. When the aforesaid stipulations are read and
appreciated in the contextual perspective, “the presumed
B
intention” of the parties is clear as crystal that the juridical seat
of arbitration would be London.”
83. Most recently, in Brahmani River Pellets (supra), this Court
in a domestic arbitration considered clause 18 - which was the arbitration
agreement between the parties - and which stated that arbitration shall
C be under Indian Arbitration and Conciliation Act, 1996, and the venue
of arbitration shall be Bhubaneswar. After citing several judgments of
this Court and then referring to Indus Mobile Distribution (supra),
the Court held:
“18. Where the contract specifies the jurisdiction of the court at
D a particular place, only such court will have the jurisdiction to
deal with the matter and parties intended to exclude all other
courts. In the present case, the parties have agreed that the
“venue” of arbitration shall be at Bhubaneswar. Considering the
agreement of the parties having Bhubaneswar as the venue of
E arbitration, the intention of the parties is to exclude all other
courts. As held in Swastik, non-use of words like “exclusive
jurisdiction”, “only”, “exclusive”, “alone” is not decisive and does
not make any material difference.
19. When the parties have agreed to the have the “venue” of
F arbitration at Bhubaneshwar, the Madras High Court erred in
assuming the jurisdiction under Section 11(6) of the Act. Since
only the Orissa High Court will have the jurisdiction to entertain
the petition filed under Section 11(6) of the Act, the impugned
order is liable to be set aside.”

G 84. On a conspectus of the aforesaid judgments, it may be
concluded that whenever there is the designation of a place of arbitration
in an arbitration clause as being the “venue” of the arbitration
proceedings, the expression “arbitration proceedings” would make it
clear that the “venue” is really the “seat” of the arbitral proceedings,
as the aforesaid expression does not include just one or more individual
H or particular hearing, but the arbitration proceedings as a whole,
BGS SGS SOMA JV v. NHPC LTD. 817
[R. F. NARIMAN, J.]

including the making of an award at that place. This language has to A
be contrasted with language such as “tribunals are to meet or have
witnesses, experts or the parties” where only hearings are to take place
in the “venue”, which may lead to the conclusion, other things being
equal, that the venue so stated is not the “seat” of arbitral proceedings,
but only a convenient place of meeting. Further, the fact that the arbitral
B
proceedings “shall be held” at a particular venue would also indicate
that the parties intended to anchor arbitral proceedings to a particular
place, signifying thereby, that that place is the seat of the arbitral
proceedings. This, coupled with there being no other significant contrary
indicia that the stated venue is merely a “venue” and not the “seat” of
the arbitral proceedings, would then conclusively show that such a clause C
designates a “seat” of the arbitral proceedings. In an International
context, if a supranational body of rules is to govern the arbitration, this
would further be an indicia that “the venue”, so stated, would be the
seat of the arbitral proceedings. In a national context, this would be
replaced by the Arbitration Act, 1996 as applying to the “stated venue”,
D
which then becomes the “seat” for the purposes of arbitration.
Correctness of the judgment in Hardy Exploration and
Production (India) Ltd.
85. Roger Shashoua (supra) was expressly referred to in
paragraphs 108 and 109 of BALCO (supra), and followed in paragraph E
110 as extracted above. BALCO (supra) then summed up the legal
position as follows:
“116. The legal position that emerges from a conspectus of all
the decisions, seems to be, that the choice of another country as
the seat of arbitration inevitably imports an acceptance that the F
law of that country relating to the conduct and supervision of
arbitrations will apply to the proceedings.
117. It would, therefore, follow that if the arbitration agreement
is found or held to provide for a seat / place of arbitration outside
India, then the provision that the Arbitration Act, 1996 would G
govern the arbitration proceedings, would not make Part I of the
Arbitration Act, 1996 applicable or enable Indian Courts to
exercise supervisory jurisdiction over the arbitration or the award.
It would only mean that the parties have contractually imported
from the Arbitration Act, 1996, those provisions which are
concerned with the internal conduct of their arbitration and which H
818 SUPREME COURT REPORTS [2019] 17 S.C.R.

A are not inconsistent with the mandatory provisions of the English
Procedural Law/Curial Law. This necessarily follows from the
fact that Part I applies only to arbitrations having their seat / place
in India.”
86. In Roger Shashoua & Ors. v. Mukesh Sharma & Ors.,
B (2017) 14 SCC 722, a Division Bench of this Court, after referring to
a number of judgments, referred to the English Shashoua judgment 3 as
follows:
“46. As stated earlier, in Shashoua Cooke, J., in the course of
analysis, held that “London arbitration” is a well known
C phenomenon which is often chosen by foreign nationals with a
different law, such as the law of New York, governing the
substantive rights of the parties and it is because of the legislative
framework and supervisory powers of the courts here which
many parties are keen to adopt. The learned Judge has further
held that when there is an express designation of the arbitration
D venue as London and no designation of any alternative place as
the seat, combined with a supranational body of Rules governing
the arbitration and no other significant contrary indicia, the
inexorable conclusion is that London is the juridical seat and
English law the curial law.”
E 87. The Division bench then turned down an argument that
BALCO (supra) had not expressly approved the Shashoua principle,
as follows:
“54. We had earlier extracted extensively from the said judgment,
as we find, the Court after adverting to various aspects, has
F categorically held that the High Court had not followed Shashoua
principle. The various decisions referred to in Enercon (India)
Ltd. (supra), the analysis made and the propositions deduced
leads to an indubitable conclusion that Shashoua principle has been
accepted by Enercon (India) Ltd. (supra). It is also to be noted
G that in BALCO, the Constitution Bench has not merely
reproduced few paragraphs from Shashoua but has also referred
to other decisions on which Shashoua has placed reliance upon.
As we notice, there is analysis of earlier judgments, though it
does not specifically state that “propositions laid down in
3
H [2009] EWHC 957 (Comm).
BGS SGS SOMA JV v. NHPC LTD. 819
[R. F. NARIMAN, J.]

Shashoua are accepted”. On a clear reading, the ratio of the A
decision in BALCO, in the ultimate eventuate, reflects that the
Shashoua principle has been accepted and the two-Judge Bench
in Enercon (India) Ltd. (supra), after succinctly analyzing it, has
stated that the said principles have been accepted by the
Constitution Bench. Therefore, we are unable to accept the
B
submission of Mr. Chidambaram that the finding recorded in
Enercon (India) Ltd. (supra) that Shashoua principle has been
accepted in BALCO should be declared as per incuriam.”
88. The Court then set out the arbitration clause and the
governing law on the facts of the case as follows:
C
“69. Though we have opined that Shashoua principle has been
accepted in BALCO and Enercon (India) Ltd. (supra), yet we
think it apt to refer to the clauses in the agreement and scrutinize
whether there is any scope to hold that the courts in India could
have entertained the petition. Clause 14 of the shareholders
agreement (SHA) refers to arbitration. The said Clause reads D
thus:
14. ARBITRATION
14.1 ...Each party shall nominate one arbitrator and in the event
of any difference between the two arbitrators, a third arbitrator/ E
umpire shall be appointed. The arbitration proceedings shall be
in accordance with the Rules of Conciliation and Arbitration of
the International Chamber of Commerce Paris.
14.2 Proceedings in such arbitrations shall be conducted in the
English language. F
14.3 The arbitration award shall be substantiated in writing and
shall be final and binding on the parties.
14.4 The venue of the arbitration shall be London, United
Kingdom.”
G
70. Clause 17.6 deals with governing law, which reads as
follows:
17.6 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of India.” H
820 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 89. The court then went on to state:
“72. It is worthy to note that the arbitration agreement is not
silent as to what law and procedure is to be followed. On the
contrary, Clause 14.1 lays down that the arbitration proceedings
shall be in accordance with the Rules of Conciliation and
B Arbitration of the ICC. In Enercon (India) Ltd. (supra), the two-
Judge Bench referring to Shashoua case accepted the view of
Cooke, J. that the phrase “venue of arbitration shall be in London,
UK” was accompanied by the provision in the arbitration Clause
or arbitration to be conducted in accordance with the Rules of
ICC in Paris. The two-Judge Bench accepted the Rules of ICC,
C Paris which is supernational body of Rules as has been noted
by Cooke, J. and that is how it has accepted that the parties have
not simply provided for the location of hearings to be in London.
To elaborate, the distinction between the venue and the seat
remains. But when a Court finds there is prescription for venue
D and something else, it has to be adjudged on the facts of each
case to determine the juridical seat. As in the instant case, the
agreement in question has been interpreted and it has been held
that London is not mentioned as the mere location but the courts
in London will have the jurisdiction, another interpretative
perception as projected by the learned senior Counsel is
E unacceptable.
xxx xxx xxx
76. In view of the aforesaid analysis, we allow the appeals and
set aside the judgment of the High Court of Delhi that has held
F that courts in India have jurisdiction, and has also determined that
Gautam Budh Nagar has no jurisdiction and the petition Under
Section 34 has to be filed before the Delhi High Court. Once
the courts in India have no jurisdiction, the aforesaid conclusions
are to be nullified and we so do. In the facts and circumstances
of the case, there shall be no order as to costs.”
G
90. The stage is now set for consideration of the recent judgment
of a Three Judge Bench of this Court in Hardy Exploration and
Production (India) Inc. (supra). The precise question that had been
referred to the Three Judge Bench in Hardy Exploration and
Production (India) Inc. (supra) was as to whether the ratio of
H Sumitomo Heavy Industries Ltd. v. ONGC Ltd. & Ors. (1998) 1
BGS SGS SOMA JV v. NHPC LTD. 821
[R. F. NARIMAN, J.]

SCC 305 - a judgment delivered under the Arbitration Act, 1940 - would A
have any impact on the “juridical seat” doctrine in arbitration law, as
developed in England and by our courts. The Three Judge Bench
answered the reference as follows:
“27. In view of the aforesaid development of law, there is no
confusion with regard to what the seat of arbitration and venue B
of arbitration mean. There is no shadow of doubt that the
arbitration Clause has to be read in a holistic manner so as to
determine the jurisdiction of the Court. That apart, if there is
mention of venue and something else is appended thereto,
depending on the nature of the prescription, the Court can come
to a conclusion that there is implied exclusion of Part I of the C
Act. The principle laid down in Sumitomo Heavy Industries Ltd.
(supra) has been referred to in Reliance Industries Limited (II)
and distinguished. In any case, it has no applicability to a
controversy under the Act. The said controversy has to be
governed by the BALCO principle or by the agreement or by D
the principle of implied exclusion as has been held in Bhatia
International.
28. Thus, we answer the reference accordingly.”
91. Having answered the reference, the Court then went on to
consider the arbitration clause in the facts of that case, which was set E
out in paragraph 30 as follows:
“30. Article 33 deals with “Sole expert, conciliation and
arbitrator”. Article 33.9 and 33.12 read thus:
33.9 Arbitration proceedings shall be conducted in accordance
with the UNICITRAL Model Law on International Commercial F
Arbitration of 1985 except that in the event of any conflict
between the Rules and the provisions of this Article 33, the
provisions of this Article 33 shall govern.
xxx xxx xxx
G
33.12 The venue of conciliation or arbitration proceedings
pursuant to this Article unless the parties otherwise agree, shall
be Kuala Lumpur and shall be conducted in English language.
Insofar as practicable the parties shall continue to implement the
terms of this contract notwithstanding the initiation of arbitration
proceedings and any pending claim or dispute.” H
822 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 92. The Court then went on to see for itself Articles 20 and 31
of the UNCITRAL Model Law and then went on to state that under
the UNCITRAL Model Law, either the juridical seat of the arbitral
proceedings is indicated in the agreement between the parties, or if it
is not, must be determined by the Arbitral Tribunal. Holding that the
B arbitration clause, on the facts of that case, referred to the “venue” as
Kuala Lumpur, the Court went on to hold that there was no
determination of any “juridical seat” by agreement, and would therefore
have to be determined by the Arbitral Tribunal. As there was no such
determination by the Arbitral Tribunal, the Court then concluded:
C
“40. The said test clearly means that the expression of
determination signifies an expressive opinion. In the instant case,
there has been no adjudication and expression of an opinion. Thus,
the word ‘place’ cannot be used as seat. To elaborate, a venue
can become a seat if something else is added to it as a
D concomitant. But a place unlike seat, at least as is seen in the
contract, can become a seat if one of the conditions precedent
is satisfied. It does not ipso facto assume the status of seat. Thus
understood, Kuala Lumpur is not the seat or place of arbitration
and the interchangeable use will not apply in stricto sensu.
E
41. In view of the aforesaid analysis, the irresistible conclusion
is that the Courts in India have jurisdiction and, therefore, the
order passed by the Delhi High Court is set aside. Resultantly,
the appeal stands allowed and the High Court is requested to
F deal with the application preferred Under Section 34 of the Act
as expeditiously as possible. There shall be no order as to costs.”

93. The Three Judge Bench in Hardy Exploration and
Production (India) Inc (supra) failed to apply the Shashoua principle
to the arbitration clause in question. Had the Shashoua principle been
G applied, the answer would have been that Kuala Lumpur, which was
stated to be the “venue” of arbitration proceedings, being governed by
the UNCITRAL Model Law, would be governed by a supranational
set of rules, and there being no other contrary indicator, it would be
clear that Kuala Lumpur would therefore be the juridical “seat” of the
H arbitration.
BGS SGS SOMA JV v. NHPC LTD. 823
[R. F. NARIMAN, J.]

94. As we have seen hereinabove, the judgement of Cooke, J. A
in Roger Shashoua and Ors. v. Mukesh Sharma 4, was expressly
approved by the 5-Judge Bench in BALCO (supra), as was stated by
the Supreme Court of India in Roger Shashoua and Ors. v. Mukesh
Sharma and Ors.5 By failing to apply the Shashoua principle to the
arbitration clause in question, the Three Judge Bench in Hardy
B
Exploration and Production (India) Inc (supra) has not followed the
law as to determination of a “juridical seat”, laid down by a Five Judge
Bench of this Court in BALCO (supra). The result in Hardy
Exploration and Production (India) Inc (supra) is that a foreign
award that would be delivered in Kuala Lumpur, would now be liable
to be challenged in the Courts at Kuala Lumpur, and also be challenged C
in the courts in India, under Section 34 of Part I of the Arbitration Act,
1996. This is exactly the situation that this Court encountered when it
decided the case of Venture Global Engineering v. Satyam
Computer Services Ltd. & Anr., (2008) 4 SCC 190. The Five Judge
Bench in BALCO (supra) expressly overruled Venture Global
D
Engineering (supra) as follows:
“143…With these observations, the matter was remanded back
to the trial court to dispose of the suit on merits. The submissions
made by K.K. Venugopal, as noticed in para 42, epitomise the
kind of chaos which would be created by two court systems, in
two different countries, exercising concurrent jurisdiction over the E
same dispute. There would be a clear risk of conflicting decisions.
This would add to the problems relating to enforcement of such
decisions. Such a situation would undermine the policy underlying
the New York Convention or the UNCITRAL Model Law.
Therefore, we are of the opinion that appropriate manner to F
interpret the aforesaid provision is that “alternative two” will
become available only if “alternative one” is not available.
xxx xxx xxx
“154. At this stage, we may notice that in spite of the aforesaid
international understanding of the second limb of Article V(1)(e), G
this Court has proceeded on a number of occasions to annul an
award on the basis that parties had chosen Indian law to govern

4
[2009] EWHC 957 (Comm)
5
(2017) 14 SCC 722 H
824 SUPREME COURT REPORTS [2019] 17 S.C.R.

A the substance of their dispute. The aforesaid view has been
expressed in Bhatia International [(2002) 4 SCC 105]
and Venture Global Engg. [(2008) 4 SCC 190] In our opinion,
accepting such an interpretation would be to ignore the spirit
underlying the New York Convention which embodies a
consensus evolved to encourage consensual resolution of
B
complicated, intricate and in many cases very sensitive
international commercial disputes. Therefore, the interpretation
which hinders such a process ought not to be accepted. This also
seems to be the view of the national courts in different
jurisdictions across the world. For the reasons stated above, we
C are also unable to agree with the conclusions recorded by this
Court in Venture Global Engg. [(2008) 4 SCC 190] that the
foreign award could be annulled on the exclusive grounds that
the Indian law governed the substance of the dispute. Such an
opinion is not borne out by the huge body of judicial precedents
in different jurisdictions of the world.”
D
95. The Five Judge Bench then went on to state:
“195. With utmost respect, we are unable to agree with the
conclusions recorded in the judgments of this Court in Bhatia
International (supra) and Venture Global Engineering (supra). In
E our opinion, the provision contained in Section 2(2) of the
Arbitration Act, 1996 is not in conflict with any of the provisions
either in Part I or in Part II of the Arbitration Act, 1996. In a
foreign seated international commercial arbitration, no application
for interim relief would be maintainable under Section 9 or any
other provision, as applicability of Part I of the Arbitration Act,
F
1996 is limited to all arbitrations which take place in India.
Similarly, no suit for interim injunction simplicitor would be
maintainable in India, on the basis of an international commercial
arbitration with a seat outside India.”
96. The decision in Hardy Exploration and Production (India)
G
Inc. (supra) is therefore contrary to the Five Judge Bench in BALCO
(supra), in that it failed to apply the Shashoua principle to the arbitration
clause in question. The Hardy Exploration and Production (India)
Inc. (supra) decision would lead to the result that a foreign award would
not only be subject to challenge in the country in which it was made,
H but also subject to challenge under Section 34 of Part I of the Arbitration
BGS SGS SOMA JV v. NHPC LTD. 825
[R. F. NARIMAN, J.]

Act, 1996, which would lead to the chaos spoken of in paragraph 143 A
of BALCO (supra), with the concomitant risk of conflicting decisions,
as held in Venture Global Engineering (supra) [overruled in
BALCO (supra)], which would add to problems relating to
enforcement, and undermine the policy underlying the New York
Convention and the UNCITRAL Model Law. We, therefore, declare
B
that the judgment in Hardy Exploration and Production (India) Inc.
(supra), being contrary to the Five Judge Bench in BALCO (supra),
cannot be considered to be good law.
97. Coming to the impugned judgment in the present appeals, it
is clear that the reasoning followed stems from the subject-matter test
that flows from the definition of ‘court’ in Section 2(1)(e)(i) of the Act. C
According to the impugned judgment, since the agreement was executed
at Faridabad, part of the cause of action would arise at Faridabad,
clothing Faridabad courts with jurisdiction for the purposes of filing a
Section 34 petition. The second part of the reasoning is that Faridabad
is the place where the request for reference to arbitration was received, D
as a result of which part of the cause of action arose in Faridabad,
which ousts the jurisdiction of Courts of New Delhi, in which no part
of the cause of action arose.
98. We have extracted the arbitration agreement in the present
case (as contained in Clause 67.3 of the agreement between the parties) E
in paragraph 3 of this judgment. As per the arbitration agreement, in
case a dispute was to arise with a foreign contractor, clause 67.3(ii)
would apply. Under this sub-clause, a dispute which would amount to
an ‘international commercial arbitration’ within the meaning of Section
2(1)(f) of the Arbitration Act, 1996, would have to be finally settled in
accordance with the Arbitration Act, 1996 read with the UNCITRAL F
Arbitration Rules, and in case of any conflict, the Arbitration Act, 1996
is to prevail (as an award made under Part I is considered a domestic
award under Section 2(7) of the Arbitration Act, 1996 notwithstanding
the fact that it is an award made in an international commercial
arbitration). Applying the Shashoua principle delineated above, it is clear G
that if the dispute was with a foreign contractor under Clause 67.3 of
the agreement, the fact that arbitration proceedings shall be held at New
Delhi/Faridabad, India in sub-clause (vi) of Clause 67.3, would amount
to the designation of either of these places as the “seat” of arbitration,
as a supranational body of law is to be applied, namely, the UNCITRAL
Arbitration Rules, in conjunction with the Arbitration Act, 1996. As such H
826 SUPREME COURT REPORTS [2019] 17 S.C.R.

A arbitration would be an international commercial arbitration which would
be decided in India, the Arbitration Act, 1996 is to apply as well. There
being no other contra indication in such a situation, either New Delhi
or Faridabad, India is the designated “seat” under the agreement, and
it is thereafter for the parties to choose as to in which of the two places
the arbitration is finally to be held.
B
99. Given the fact that if there were a dispute between NHPC
Ltd. and a foreign contractor, clause 67.3(vi) would have to be read as
a clause designating the “seat” of arbitration, the same must follow even
when sub-clause (vi) is to be read with sub-clause (i) of Clause 67.3,
C where the dispute between NHPC Ltd. would be with an Indian
Contractor. The arbitration clause in the present case states that
“Arbitration Proceedings shall be held at New Delhi/Faridabad, India…”,
thereby signifying that all the hearings, including the making of the
award, are to take place at one of the stated places. Negatively speaking,
the clause does not state that the venue is so that some, or all, of the
D
hearings take place at the venue; neither does it use language such as
“the Tribunal may meet”, or “may hear witnesses, experts or parties”.
The expression “shall be held” also indicates that the so-called “venue”
is really the “seat” of the arbitral proceedings. The dispute is to be
settled in accordance with the Arbitration Act, 1996 which, therefore,
E applies a national body of rules to the arbitration that is to be held either
at New Delhi or Faridabad, given the fact that the present arbitration
would be Indian and not international. It is clear, therefore, that even
in such a scenario, New Delhi/Faridabad, India has been designated
as the “seat” of the arbitration proceedings.
F
100. However, the fact that in all the three appeals before us
the proceedings were finally held at New Delhi, and the awards were
signed in New Delhi, and not at Faridabad, would lead to the conclusion
that both parties have chosen New Delhi as the “seat” of arbitration
under Section 20(1) of the Arbitration Act, 1996. This being the case,
G both parties have, therefore, chosen that the Courts at New Delhi alone
would have exclusive jurisdiction over the arbitral proceedings.
Therefore, the fact that a part of the cause of action may have arisen
at Faridabad would not be relevant once the “seat” has been chosen,
which would then amount to an exclusive jurisdiction clause so far as
H Courts of the “seat” are concerned.
BGS SGS SOMA JV v. NHPC LTD. 827
[R. F. NARIMAN, J.]

101. Consequently, the impugned judgment is set aside, and the A
Section 34 petition is ordered to be presented in the Courts in New
Delhi, as was held by the learned Single Judge of the Special Commercial
Court at Gurugram.
102. The appeals are allowed in the aforesaid terms.
B
Kalpana K. Tripathy Appeals allowed.

C

D

E

F

G

H