14 February 2022, Monday

2 years ago

The BGS test for determination of seat applied in domestic ad hoc arbitration: Calcutta High Court

18 January 2022 | SPML Infra Limited v. East India Udyog Limited | AP No 406 of 2020 | Prakash Shrivastava CJ | Delhi High Court | 2022 SCC OnLine Cal 146

The parties’ contract (purchase order) was unsigned, and Kolkata was stated as the venue of arbitration. Neither came in the way of the Calcutta High Court appointing an arbitrator.

The court noted that an arbitration agreement need not be signed [following Govind Rubber (2015) 13 SCC 477 & Caravel Shipping (2019) 11 SCC 461]. It determined that Kolkata was the seat of the arbitration because it was the specified venue, and the test set out in paragraph 61 of BGS SGS Soma (2020) 4 SCC 234 applied.

Paragraph 61 of BGS (SCC version) reads:

    61. 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 inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding.

Read the judgment here.

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