INDUS MOBILE DISTRIBUTION PRIVATE LIMITEDversusDATAWIND INNOVATIONS PRIVATE LIMITED & ORS.

                             (2017] 4 S.C.R. 744


A         INDUS MOBILE DISTRIBUTION PRIVATE LIMITED
                                       v.
        DATAWIND INNOVATIONS PRNATE LIMITED & ORS.
                      (Civil Appeal Nos. 5370-71 of2017)
.B                              APRIL 19,2017
       [PINAKI CHANDRA GROSE AND R. F. NARIMAN, JJ.]
         Arbitration and Conciliation Act, 1996 - s.20 - Juri::diction
  for regulating arbitral proceedings - Seat of arbitration fixed at
C Mumbai - Whether exclusive jurisdiction clause in an agreement
  stating that the courts at Mumbai alone would have jurisdiction in
  respect of dispute arising between the parties under the agreement
   would oust all other courts - Held: Once the seat of arbitration is
  fixed, it would be in nature of an exCZusive jurisdiction clause as to
   the courts which exercise supervisory powers over the arbitration -
D Any claim for reme({Y is agreed to be made only in the courts of the
  place designated as the seat of arbitration - On facts, the moment
    "seat" is determined, the fact that the seat is at Mumbai would vest
   Mumbai courts with exclusive jurisdiction for purpose of regulating
   arbitral proceedings arising out of the agreement between .the
   parties - Jurisdiction .
.E
            Words and Phrases - 'Place', 'juridical seat', 'venue', 'seat' -
     Meaning of - In terms of s.20 of Arbitration and Conciliation Act,
     I 996 - Discussed.
           Disposing of the appeals, the Court
 F       HELD: 1. A conspectus of all the relevant provisions of
   the Arbitration and Conciliation Act, 1996 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
 G jurisdiction exclusively vests in the Mumbai courts. Under 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
                                   744
  INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND               745
            INNOVATIONS PRIVATE LTD.

may have arisen at the neutral venue and neither would any of A
the provisions of Section 16 to 21 of the CPC be attracted. In
arbitration law however, the moment "seat" is determined, the
fact that the seat is at Mumbai would vest Mumbai courts with
exclusive jurisdiction for the purposes of regulating arbitral
proceedings arising out of the agreement between the parties. B
(Para 20) (759-B-D]
     Bharat Aluminium Co. v. Kaiser Aluminium Technical
     Services Inc., (2012) 9 SCC 552 : [2012) 12 SCR 327;
     Enercon (India) Ltd. v. Enercon Gmbh (2014) 5 SCC 1
     : [2014) 2 SCR 855 - relied on.
                                                               c
     Reliance Industries Ltd. v. Union of India (2014) 7 SCC
     603 : [2014) 6 SCR 456; Harmony Innovation Shipping
     Limited v. Gupta Coal India Limited and Another (2015)
     9 SCC 172 : [2015) 2 SCR 697; Union of India v.
     Reliance Industries Limited and Others (2015) 10 SCC
     213 : (2015) 10 SCR 85; Eitzen Bulk A/S v. Ashapura       D
     Minechem Limited and Another (2016) 11 SCC 508 :
     (2016) 2 SCR 634; Swastik Gases Private Limited v.
     Indian Oil Corporation Limited (2013) 9 SCC 32 :
     (2013) 7 SCR 581; B.E. Simoese Von Staraburg
     Niedenthal and Another v. Chhattisgarh Investment         E
     Limited (2015) 12 SCC 225 - referred to.
                     Case Law Reference
(2012) 12 SCR 327             relied on              Para 10
(2014) 2 SCR 855              relied on              Para 13   F

(2014) 6 SCR 456              referred to            Para 15
(2015) 2 SCR 697              referred to            Para 15
[2015) 10 SCR 85              referred to            Para 15
                                                               G
(2016) 2 SCR 634              referred to            Para 16
[2013) 7 SCR 581              referred to            Para 21
(2015) 12 sec 225             referred to            Para 21
                                                               H
746            SUPREME COURT REPORTS                           [2017) 4 S.C.R.


                                               '
A           CIVIL APPELLATE JURlSDICtION: Civil Appeal Nos. 5370-
      5371 of2017.
             From the Judgment and Order dated 03.06.2016 of the High Court
      of Delhi at New Delhi in Arbitration Petition No. 592 of2015 and 0. M.
      P. (I) No. 531 of2015.
B            K. S. Mahadevan, Krishna Kumar R. S., Rajesh Kuma:, Advs.
      for the Appellant.
            Mohit Chaudhary, Ms. Puja Sharma, Kuna! Sachdeva, ImranAli,
      Advs. for the Respondents.
 c          The Judgment of the Court was delivered by
            R. F. NARIMAN, J. 1. Leave granted.
          2. The present appeals raise an interesting question as to whether,
   when the seat of arbitration is Mumbai, an exclusive jurisdiction clause
   stating that the courts at Mumbai alone would have jurisdiction in respect
 D of disputes arising under the agreement would oust all other courts
   including the High Court of Delhi, whose judgment is appealed against.
          3. The brief facts necessary to appreciate the controversy are
   that Respondent No.I is engaged in the manufacture, marketing and
   distribution of Mobile Phones, Tablets and their accessories. Respondent
 E No. I has its registered office at Amritsar, Punjab. Respondent No. l was
   supplying goods to the appellant at Chennai from New Delhi. The
   appellant approached Respondent No. I and expressed an earnest desire
   to do business with Respondent No. I as its Retail Chain Partner. This
   being the case, an agreement dated 25.10.20 I4 was entered iU'l·J between
 F the parties. Clauses I 8 and I 9 are relevant for our purpose, rml are set
   out hereinbelow:
             "Dispute Resolution Mechanism:
             Arbitration: In case of any dispute or differences arising between
             parties out of or in relation to the construction, meaning, scope,
 G           operation or effect of this Agreement or breach of this Agreement,
             parties shall make efforts in good faith to amicably resolve such
             dispute.
             If such dispute or difference cannot be amicably resolved by the
             parties (Dispute) within thirty days of its occurrence, or such longer
 H
  INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND                             747
     INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

      time as mutually agreed, either party may refer the dispute to the     A
      designated senior officers of the parties.
       If the Dispute cannot be amicably resolved by such officers within
       thirty (30) days from the date of referral, or within such longer
       time as mutually agreed, such Dispute shall be finally settled by
       arbitration conducted under the provisions of the Arbitration &       B
       Conciliation Act 1996 by reference to a sole Arbitrator which
     . shall be mutually agreed by the parties. Such arbitration shall be
       conducted at Mumbai, in English language.
      The arbitration award shall be final and the judgment thereupon
      may be entered in any court having jurisdiction over the parties       c
      hereto or application may be made to such court for a judicial
      acceptance of the award and an order of enforcement, as the
      case may be. The Arbitrator shall have the power to order specific
      performance of the Agreement. Each Party shall bear its own
      costs of the Arbitration.
                                                                             D
      It is hereby 'agreed between the Parties that they will continue to
      perform their respective obligations under this Agreement during
      the pendency of the Dispute.
      19. All disputes & differences of any kind whatever arising cat of
      or in connection with this Agreement shall be subject to the E
      exclusive jurisdiction of courts of Mumbai only."
       4. Disputes arose between the parties and a notice dated 25.9.7.015
was sent by Respondent No.l to the appellant. The notice stated that
the appellant had been in default of outstanding dues ofRs.5 crores with
interest thereon and was called upon to pay the outstanding dues within      F
7 days. Clause 18 of the Agreement was invoked by Respondent No. l,
and one Justice H.R. Malhotra was appointed as the Sole Arbitrator
between the parties. By a reply dated 15. l 0.2015, the appellant objected
to the appointment of Justice Malhotra and asked Respondent No. I to
withdraw its notice. By a further reply dated 16.10.2015, the averments
made in the notice were denied in toto.                                      G
       5. Two petitions were then filed by Respondent No. l - the first
dated September 2015, under Section 9 of the Arbitration and Conciliation
Act, 1996 asking for various interim reliefs in the matter. By an order
dated 22.9.2015, the Delhi High Court issued notice in the interim
                                                                             H
748           SUPREME COURT REPORTS                          [2017] 4 S.C.R.


A application and restrained the appellant from transferring, alienating or
  creating any third party interests in respect of the property bearing No.281,
  TK Road, A~arpet, Chennai-600018 till the next date of hearing. By
  an application'dat~q 28.10.2015, Respondent No.l filed a Section ll
  petition to appoint an Arbitrator.
B         6. Both applications were disposed of by the impugned judgment.
  First and foremost, it was held by the impugned judgment that as no. part
  of the cause ofaction arose in Mumbai, only the courts of three territories
  could have junsdiction in the matter, namely, Delhi and Chennai (from
  and to where goods were supplied), and Amritsar (which is the registered
  office of the appellant company). The court therefore held that the
c exclusive jurisdiction clause would not apply on facts, as the courts in
  Mumbai would have no jurisdiction at all. It, therefore, determined that
  Delhi being the first Court that was approached would have jurisdiction
  in the matter and proceeded to confirm interim order dated 22.9.2015
  and also proceeded to dispose of the Section l l petition by appointing
D Justice S.N. Variava, retired Supreme Court Judge, as the sole Arbitrator
  in the proceedings. The judgment recorded that the conduct of the
  arbitration would be in Mumbai.
          7. Learned counsel on behalf of the appellant has assailed the
  judgment of the Delhi High Court, stating that even if it were to be
  conceded that no part of the cause of action arose at Mumbai, yet the
E seat of the arbitration being at Mumbai, courts in Mumbai would have
  exclusive jurisdiction in all proceedings over the same. According to
  him, therefore, the impugned judgment was erroneous and needs to be
   set aside.
          8. In opposition to these arguments, learned C'.JUnsel for
 F Respondent No. l sought to support the judgment by stating that no part
   of the cause of action arose in Mumbai. This being the case, even ifthe
   seat were at Mumbai, it makes no difference as one of the tests prescribed
   by the Civil Procedure Code, l 908, to give a court jurisdiction must at
   least be fulfilled. None of these tests being fulfilled on the facts of the
 G present case, the impugned judgment is correct and requires no
   interference.
            9. The relevant provisions of the Arbitration and Conciliation Act,
      1996 are set out hereinbelow:
            "2. Definitions. - ( l) In this Part, unless the context otherwise
 H          requires, -
  INDUS MOBILE DISTIDBUTION PVT. LTD v. DATAWIND                                 749
     INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

      (e) "Court" means the principal Civil Court of original jurisdiction A
      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 ifthe same had been
      the subject-matter ofa suit, but does not include any civil court of
      a grade inferior to such principal Civil Court, or any Court of B
      Small Causes;
      (2) This Part shall apply where the place ofarbitration is in India.
      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       C
      of arbitration shall be determined by the arbitral 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 D
      place it considers appropriate for 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. -
                                                                                 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." ·
       10. The concept of juridical seat has been evolved by the courts
in England and has now been firmly embedded in our jurisprudence.
                                                                                 F
Thus, the Constitution Bench in Bharat Aluminium Co. v. Kaiser
Aluminium Technical Services Inc., (2012) 9 SCC 552, has adverted
to "seat" in some detail. Paragraph 96 is instructive and states as under:-
      "Section 2(l)(e) of the Arbitration Act, 1996 reads as under:
         "2. Definitions.-{ 1) In this Part, unless the context otherwise        G
      requires-
           (a)-(d)***
          (e) 'Court' means the Principal Civil Court of Original
      Jurisdiction in a district, and includes the High Court in exercise
                                                                                 H
750      SUPREME COURT REPORTS                              [2017] 4 S.C.R.


A      ofits ordinary original civiljurisdiction, havingjurisdiction to decide
      'the questions forming the subject-matter of the arbitration ifthe
       same had been the subject-matter of a suit, but does l!Ot include
       any civil court of a grade inferior to such Principal Civil Court, or
       any Court of Small Causes;"
B     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 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
c     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 recognition to party autonomy. Accepting
      the narrow construction as projected by the learned counsel for
D     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 necessary as on many occasions the agreement may
       provide for a seat ofarbitration at a place which would be neutral
 E     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, ifthe arbitration is held in Delhi,
       where neither of the parties are from Delhi, (Delhi having been
       chosen as a neutral place as between a party from Mumbai and
 F     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 jurisdiction
        over the arbitration proceedings and the tribunal. This would be
        irrespective of the fact that the obligations to be performed under
 G      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 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
 H      is located." [para 96]
   INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND                             751
      INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

         11. Paragraphs 98 to 100 have laid down the law as to "seat"         A
thus:
        "We now come to Section 20, which is as under:
            "20. Place of arbitration.-{ 1) The parties are free to agree
        on the place of arbitration.
                                                                              B
           (2) Failing any agreement referred to in sub-section ( 1), the
        place of arbitration shall be determined by the Arbitral 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        c
        Arbitral Tribunal may, unless otherwise agreed 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 documents, goods or other property."
          A plain reading of Section 20 leaves no room for doubt that where D
          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)
        · authorises 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 E
          as consultations among its members for hearing witnesses, experts
          or the parties.
        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 F
        Part I, where the place of arbitration is in India. Therefore, Section
        20 would also not support the submission of the extra-territorial
        applicability of Part I, as canvassed by the learned counsel for the
        appellants, so far as purely domestic arbitration is concerned.
        True, that in an international commercial arbitration, having a seat G
        in India, hearings may be necessitated outside India. In such
        circumstances, the hearing of the arbitration will be conducted at
        the venue fixed by the parties, but it would not have the effect of
        changing the seat of arbitration which would remain in India. The
        legal position in this regard is summed up by Redfern and Hunter,
                                                                             H
752      SUPREME COURT REPORTS                           (2017)4 S.C.R.


A     The Law and Practice ofInternational Commercial Arbitration
      ( 198~) at p. 69 in the following passage under the heading "The
      Place ofArbitration":
                                           •
          "The preceding discussion has been on the basis that there is
      only one 'place' of arbitration. This will be the place chosen by or
 B    on behalfofthe parties; and it will be designated in the arbitration
      agreement or the terms of the 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 people of many
 c     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
 D     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 move of the
       Arbitral Tribunal does not ofitself mean that the seat of arbitration
        changes. The seat of the arbitration remains the place initially
        agreed by or on behalf of the parties."
 E
      This, in our view, is the correct depiction of the practical
      considerations and the distinction between "seat" [Sections 20( 1)
      and 20(2)) and "venue" [Section 20(3)]. We may point out here
      that the distinction between "seat" and "venue" would be quite
      crucial in the event, the arbitration agreement designates a foreign
 F    country as the "seat"/"place" of the arbitration and also selects
      the Arbitration Act, 1996 as the curial law/law governing the
      arbitration proceedings. It would be a matter of construction of
      the individual agreement to decide whether:
             (i) the designated foreign "seat" would be read as in fact
 G     only providing for a "venue"/"place" where the hearings would
       be held, in view of the choice of the Arbitration Act, 1996 as being
       the curial law, oR
            (ii) the specific designation of a foreign seat, necessarily
       carrying with it the choice of that country's arbitration/curial law,
  H
  INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND                               753
     INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

      would prevail over and subsume the conflicting selection choice          A
      by the parties of the Arbitration Act, 1996." [paras 98 - 100]
        12. In an instructive passage, this Court stated that an agreement
as to the seat of an arbitration is analogous to an exclusive jurisdir:tion
clause as follows:
      "Thus, it is clear that the regulation of conduct of arbitration         B ·
      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
      international instruments, such as the Geneva Convention and the
      New York Convention as well as the UNCITRAL Model Law. It                C
      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 843 :             D
      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."
                                                      (emphasis supplied)      E
      In the aforesaid case, the Court of Appeal had approved the
      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             F
      a remedy ... as to the validity of an existing interim or final
      award is agreed to be made ·only in the courts of the place
      designated as the seat of arbitration."
                                           (emphasis supplied) [para 123]
       13. The Constitution Bench's statement of the law was further
expanded in Enercon (India) Ltd. v. Enercon Gmbh, (2014) 5 SCC 1.              G
After referring to various English authorities in great detail, this Court
held, following the Constitution Bench, as follows:
      "It is accepted by most of the experts in the law relating to
      international arbitration that in almost all the national laws,
                                                                               H
754      SUPREME COURT REPORTS                         [2017] 4 S.C.R.


A     arbitrations are anchored to the seat/place/situs of arbitration.
      Redfern anc{ Hunter on International Arbitration (5th Edn.,
      Oxford University Press, Oxford/New York 2009), in Para 3.54
      concludes that "the seat of the arbitration is thus intended to be
      its centre of gravity". In .BALCO [Bharat Aluminium Co. v.
      Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 :
B
      (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 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
 c    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 from
       Redfern and Hunter has been quoted which is as under: (SCC p.
       598, para 75)
 D    "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 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 theArbitral Tribunal
 E    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 a place other than the
 F     designated place of arbitration, either for its own ponvenience 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 circumst!lnces each move
       of the Arbitral Tribunal does not of itself mean that the seat of
 G     arbitr<1tion changes. The seat of arbitration remains the place
       initially agreed by or on behalf of the parties.' (Naviera case
       [Naviera Amazonica Peruana S.A.             v. Cornpania
       Internacional De Seguros Del Peru, (1988) l Lloyd's Rep 116
       (CA)], Lloyd's Repp. 121)"
 H                                                  (emphasis in original)
   INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND                               755
      INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

       These observations have also been noticed in Union of India              A
       v. McDonnell Douglas Corpn. [( 1993) 2 Lloyd's Rep 48]"
       [para 134]
       14. This Court reiterated that once the seat of arbitration has
been fixed, it would be in the nature ofan exclusive jurisdiction clause as
to the courts which exercise supervisory powers over the arbitration.           B
(See: paragraph 138).
       15. In Reliance Industries Ltd. v. Union of India, (2014) 7
sec, 603, this statement of the law was echoed in several paragraphs.
This judgment makes it clear that 'juridical seat" is nothing but the "legal
place" of arbitration. It was held that since the juridical seat or legal       c
place of arbitration was London, English courts alone would have
jurisdiction over the arbitration thus excluding Part I of the Indian Act.
(See: paragraphs 36, 41, 45 to 60 and 76.1 and 76.2). This judgment
was relied upon and followed by Harmony Innovation Shipping
Limited v. Gupta Coal India Limited and Another, (2015) 9 SCC
 172 (See: paragraphs 45 and 48). In Union of India v. Reliance                 D
Industries Limited and Others, (2015) 10 SCC 213, this Court
referred to all the earlier judgments and held that in cases where the
seat of arbitration is London, by necessary implication Part I of the
Arbitration and Conciliation Act, 1996 is excluded as the supervisory
jurisdiction of courts over the arbitration goes along with "seat".             E
      16. In a recent judgment in Eitzen Bulk A/S v. Ashapura
Minechem Limited and Another, (2016) 11 SCC 508, all the aforesaid
authorities were referred to and followed. Paragraph 34 of the said
judgment reads as follows:
       "As a matter of fact the mere choosing of the juridical seat of          F
       arbitration attracts the law applicable to such location. In other
       words, it would not be necessary to specify which law would
       apply to the arbitration proceedings, since the law of the parti-:ular
       country would apply ipso jure. The following passage from
       Redfern and Hunter on International Arbitration contains the             G
       following explication of the issue:
           "It is also sometimes said that parties have selected the
       procedural law that will govern their arbitration, by providing for
       arbitration in a particular country. This is too elliptical and, as an
       English court ·itself held more recently in Breas of Daune Wind          H
756           SUPREME COURT REPORTS                            [2017] 4 S.C.R.


A           Farm it does not always hold true. What the parties have done is
            to choose a place of arbitration in a particular country. That choice
            brings with it submission to the laws of that country, including any
            mandatory provisions of its law on arbitration. To say that the
          · parties have "chosen" that particular law to govern the arbitration
            is rather like saying that an English woman who takes her car to
B
            France has "chosen" French traffic law, which will oblige her to
            drive on the right-hand side of the road, to give priority to vehicles
            approaching from the right, and generally to obey traffic laws to
            which she may not be accustomed. But it would be an odd use of
            language to say this notional motorist had opted for "French traffic
 c          law". What she has done is to choose to go to France. The
            app1icability of French law then follows automatically. It is not a
            matter of choice.
                  Parties may well choose a particular place of arbitration
             precisely because its lex arbitri is one which they find attractive.
 D           Nevertheless, once a place of arbitration has been chosen, it brings
             with it its own law. If that law contai11s provisions that are
             mandatory so far as arbitration are concerned, those provisions
             must be obeyed. It is not a matter of choice any more than the
             notional motorist is free to choose which local traffic laws to obey
           · and which to disregard." [para ~4]
 E
             17. It may be mentioned, in .passing, that the Arbitration and
      Conciliation Act, 1996 has been amended in 2015 pursuant to a detailed
      Law Commission Report. The Law Commission specifically adverted
      to the difference between "seat" and "venue" as follows:

 F          "40. The Supreme Court in BALCO decided that Parts I and II
            of the Act are mutually exclusive of each pther. The intention of
            Parliament that the Act is territorial in nature and sections 9 and
            34 will apply only when the seat of arbitration is in India. The seat
            is the "centre of gravity" of arbitration, and even where two
            foreign parties arbitrate in India, Part I would apply and, by 24
 G          virtue of section 2(7), the award would be a "domestic award".
            The Supreme Court recognized the "seat" of arbitration to be the
            juridical seat; however, in line wi_th international practice, it was
            observed that the arbitral hearings may take place at a location
            other than the seat of arbitration. The distinction between "seat"
 H
INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND                                757
   INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

  and "venue" was, therefore, recognized. In such a scenario, only            A
  ifthe seat is determined to be India, Part I would be applicable. If
  the seat was foreign, Part I would be inapplicable. Even if Part I
  was expressly included "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           B
  arbitration and which are not inconsistent with the mandatory
  provisions of the [foreign) Procedural Law/Curial Law." The same
  cannot be used to confer jurisdiction on an Indian Court. However,
  the decision in BALCO was expressly given prospective effect
  and applied to arbitration agreements executed after the date of
  the judgment.                                                               C
  41. While the decision in BALCO is a step in the right direction
  and would drastically reduce judicial intervention in foreign
  arbitrations, the Commission feels that there are still a few areas
  that are likely to be problematic.
  (i) Where the assets of a party are located in India, and there is a        D
   likelihood that that party will dissipate its assets in the near future,
   the other party will lack an efficacious remedy if the seat of the
   arbitration is abroad. The latter party will have two possible
   remedies, but neither will be efficacious. First, the latter party can
   obtain an interim order from a foreign Court or the arbitral tribunal
   itself and file a civil suit to enforce the right created by the interim   E
   order. The interim order would not be enforceable directly by
   filing an execution petition as it would not qualify as a "judgment"
   or "decree" for the purposes of sections 13 and 44A of the Code
   of Civil Procedure (which provide a mechanism for enforcing
   foreign judgments). Secondly, in the event that the former party           F
   does not adhere to the terms of the foreign Order, the latter party
   can initiate proceedings for contempt in the foreign Court and
   enforce the judgment of the foreign Court under sections 13 and
   44A of the Code of Civil Procedure. Neither of these remedies is
   likely to provide a 25 practical remedy to the party seeking to
   enforce the interim relief obtained by it.                                 G
   That being the case, it is a distinct possibility that a foreign party
   would obtain an arbitral award in its favour only to realize that the
   entity against which it has to enforce the award has been stripped
   of its assets and has been converted into a shell company.
                                                                              H
758            SUPREME COURT REPORTS                            [2017] 4 S.C.R.


A          (ii) While the decision in BALCO was made prospective to ensure
           that hotly negotiated bargains are not overturned overnight, it results
           in a situation where Courts, despite knowing that the decision in
           Bhatia is no longer good law, are forced to apply it whenever they
           are faced with a case arising from an arbitration agreement
           executed pre-BALCO.
B
           42.The above issues have been addressed by way of proposed
           Amendments to sections 2(2), 2(2A), 20, 28 and 31."
           18. In amendments to be made to the Act, the Law Commission
      recommended the following:
C          "Amendment of Section 20
           12.In section 20, delete the word "Place" and add the words "Seat
           and Venue" before the words "of arbitration''.
           (i) In sub-section (1), after the words "agree on the" delete the
D
           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". ·
            [NOTE: The departure from the existing phrase "place" o'f
            arbitration is proposed to make the wording of the Act consistent
E           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] seat" from a"[ mere]
            venue" of arbitration.]
            Amendment of Section 31
 F          17.In section 31
            (i) In sub-section (4), after the words "its date and the" delete the
            word "place" and add the word "seat"."
          19. The amended Act, does not, however, contain the aforesaid
 G 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 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
 H
   INDUS MOBILE DISTRIBUTION PVT. LTD v. DATAWIND                                 759
      INNOVATIONS PRIVATE LTD. [R. F. NARIMAN, J.]

Constitution Bench of the Supreme Court has already done by way of A
construction of the Act. .
        20. A conspectus of all the aforesaid provisions shows that the
moment the seat is designated, it is akin to an excluiiive 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 clearthat jurisdiction exclusively B
vests in the Mumbai courts. Under 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 may have C
arisen at the neutral venue and neither would any of the provisions of
Section 16 to 21 of the CPC 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
agreement between the parties.                                                  D
        21. 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 was followed in a recent
judgment in B.E. Simoese Von Staraburg Niedenthal and Another E
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. 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 F
this judgment, so that the respondents may take necessary steps under
Section 9 in the Mumbai Court. Appeals are disposed of accordingly..


Ankit Gyan                                                 Appeals disposed of.