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27 December 2021, Monday

2 years ago

Though the “venue” of arbitration is Gurugram, the clause vesting jurisdiction in the Delhi High to appoint an arbitrator is enforceable: Delhi High Court

13 December 2021 | Arjun Sethi v. All About Outdoor Pvt. Ltd.| Arb. P. 1056 of 2021 | Sanjeev Narula J | Delhi High Court | 2021 SCC OnLine Del 5343

Before it, the court had an arbitration clause under which the venue of arbitration was Gurugram, and courts in Gurugram had exclusive jurisdiction. However, the parties were to apply to the Delhi High Court for the appointment of a sole arbitrator.

  1. The clause is unusual because the venue is Gurugram, but the Delhi High Court is the appointing authority. An identical clause was considered in Cars24 Services 2020 SCC Online 1720, where the court upheld party autonomy to select the appointing court.
  2. This case has one distinction from Cars24 because a Section 9 ACA application had been filed in Gurugram. But this factor too was considered in Orix Leasing Arb. Pe. 637 of 2019 decided on 23 November 2021 (the Chief Justice of the Bombay High Court was the appointing authority, Delhi was the venue of arbitration, and an application for interim relief had been filed earlier in a Delhi district court. However, the Delhi High Court refused to appoint an arbitrator for lack of jurisdiction).
  3. Also, it is common ground that Section 42 ACA would not apply, and all proceedings would be at Gurugram.

[Ed. Note: The court emphasises the venue clause versus the appointing clause in its reasoning. However, it seems conscious that the seat of arbitration was also Gurugram (because courts there had exclusive jurisdiction as well). The court also notes that Cars24 Services had an identical clause. In that case, the seat was Delhi, but the appointing authority was a court at Haryana; so, the Delhi High Court enforced the clause and declined jurisdiction.]

Read the decision here.

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Categories: Appointment of Arbitrators | BGS Soma | Choice of Seat | Designation of Arbitral Seat | Exclusive Jurisdiction | Party Autonomy | Party Autonomy to Select Appointing Authority | Place | Place of Arbitration | Seat | Seat of Arbitration | Section 11 ACA | Section 20 ACA | Tests for Determination of Seat | Venue | Venue of Arbitration

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