The Supreme Court clarified the distinction between 'venue' and 'seat' in arbitration agreements, holding that where an agreement stipulates arbitration proceedings in Goa and confers exclusive jurisdiction on Goa courts, the Delhi High Court lacked authority under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator. The judgment reinforces that exclusive jurisdiction clauses prevail over venue designations in determining the juridical seat.
Background & Facts
The Dispute
The dispute arises from a Franchise Agreement dated 03 August 2023 between Arcis Clean Energy Pvt. Ltd. (appellant) and Parshva Innovation (respondent). The agreement contained an arbitration clause (Clause 32) and a governing law and jurisdiction clause (Clause 38) that designated Goa as the exclusive forum for disputes.
Key Facts
- The Franchise Agreement was executed on 03 August 2023.
- Clause 32.4 states that the location of arbitration shall be within Delhi; Clause 32.5 provides that arbitration proceedings will be held in Goa.
- Clause 38 declares: “This Agreement shall be interpreted and construed exclusively in accordance with the laws of India and parties shall agree to submit to the exclusive jurisdiction of competent courts in Goa, India.”
- On 25 March 2025, the respondent issued a notice proposing a sole arbitrator.
- The appellant rejected the proposal via a response letter dated 19 April 2025.
- Consequently, the respondent approached the Delhi High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
- The Delhi High Court, by order dated 11 November 2025, appointed an arbitrator and left the venue for hearings to be selected in consultation with the parties.
- The appellant challenged the order, contending that the High Court lacked jurisdiction because the juridical seat of arbitration is Goa.
Procedural History
- 03 August 2023: Execution of the Franchise Agreement.
- 25 March 2025: Respondent’s notice proposing arbitrator.
- 19 April 2025: Appellant’s rejection of the proposed arbitrator.
- 11 November 2025: Delhi High Court’s order appointing arbitrator (impugned order).
- 12 October 2026: Date of the Supreme Court judgment.
Relief Sought
The appellant sought to set aside the Delhi High Court’s order dated 11 November 2025, declaring that the court lacked jurisdiction to appoint an arbitrator, and to be left at liberty to approach the competent court in Goa for any further proceedings.
The Legal Issue
The central question was whether, where an arbitration agreement designates multiple places for arbitration (Delhi and Goa) and contains an exclusive jurisdiction clause favoring Goa courts, the Delhi High Court possessed jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator. Specifically, the Court had to determine whether the designation of Delhi as the location of arbitration in Clause 32.4, coupled with the provision for proceedings in Goa under Clause 32.5, rendered Delhi the juridical seat, or whether the exclusive jurisdiction clause in Clause 38 prevailed to make Goa the seat, thereby depriving the Delhi High Court of authority to entertain the appointment application.
Arguments Presented
For the Appellant/Petitioner
The appellant argued that Clause 38’s exclusive jurisdiction clause, read with Clause 32.5, established Goa as the juridical seat; Delhi was merely a venue. Reliance was placed on Arif Azim Company Limited v. Micromax Informatics FZE (2025) 9 SCC 750, Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and others (2017) 7 SCC 678, Swastik Gases (P) Ltd. v. Indian Oil Corporation Ltd. (2013) 9 SCC 32, BGS SGS SOMA JV v. NHPC LIMITED (2020) 4 SCC 234, and Activitas Management Advisor Private Limited v. Mind Plus Healthcare Private Limited (2025) SCC Online SC 3069. The appellant contended that the High Court confused venue with seat, thereby lacking jurisdiction under Section 11(6).
For the Respondent/State
The respondent maintained that the arbitration agreement is independent and that Clause 32.4 (location within Delhi) prevails over later clauses, making Delhi the seat. Reliance was placed on Sasan Power Ltd. v. North American Coal Corporation (India) Pvt. Ltd. (2016) 10 SCC 813, M/s. Cable Corporation of India Ltd. v. M/s. Jay Pee Sports International Ltd. and Another (2018) SCC OnLine Del 10340, Sunil Kumar Chandra v. Spire Techpark (P) Ltd. (2023) SCC OnLine Del 286, Ramkishorelal and Another v. Kamal Narayan (1962) SCC OnLine SC 113, Shree Bhowani Cotton Mills v. Union Textile Traders (1965) SCC OnLine Cal 83, and M/s Lyrus Life Sciences Pvt. Ltd. v. M/s Acme Generics LLP (Civil Misc. Petition No.192/2020, decided by High Court of Karnataka at Bengaluru on 23.06.2021). The respondent asserted that the Governing Law clause does not override the arbitration clause’s seat determination.
The Court's Analysis
The Court began by reiterating the distinction between ‘seat’ and ‘venue’ in arbitration jurisprudence. Drawing from BGS SGS SOMA JV v. NHPC LIMITED and its affirmation in Arif Azim Company Limited v. Micromax Informatics FZE, it outlined a three-condition test for when a venue can be construed as the seat: (i) the arbitration agreement designates only one place; (ii) that place has anchored the arbitral proceedings without scope of change; and (iii) there is no significant contrary indicium showing the place is merely a venue. The Court noted that the present agreement mentions both Delhi and Goa, so the first condition fails, prompting a look at the Governing Law clause.
Applying the maxim expressio unius est exclusio alterius, the Court held that Clause 38’s stipulation that parties shall submit to the exclusive jurisdiction of competent courts in Goa impliedly excluded the jurisdiction of all other courts. Consequently, Goa, not Delhi, is the juridical seat. The provision in Clause 32.5 that arbitration proceedings will be held in Goa reinforces this conclusion, while Clause 32.4’s reference to Delhi is merely a venue designation.
The Court further observed that the parties’ intention, gathered from the entire agreement, points to Goa as the seat. The exclusive jurisdiction clause cannot be ignored when determining the seat under Section 11(6). Therefore, the Delhi High Court lacked jurisdiction to entertain the respondent’s application for appointment of an arbitrator.
“Upon reading the Agreement in its entirety, we find that the juridical seat of arbitration was at Goa, therefore, we are of the view that the Delhi High Court lacked jurisdiction to entertain the application under sub-section (6) of Section 11 of the 1996 Act.”
Having found the seat at Goa, the Court set aside the impugned order and left the parties free to approach the competent court in Goa.
The Verdict
The appellant succeeded. The Supreme Court set aside the Delhi High Court’s order dated 11 November 2025 that had appointed an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. The Court declared that the Delhi High Court lacked jurisdiction because the juridical seat of arbitration was Goa, as determined by the exclusive jurisdiction clause in Clause 38 and the provision for proceedings in Goa under Clause 32.5. The parties are left at liberty to approach the competent court in Goa for any further proceedings concerning the appointment of an arbitrator or other disputes arising from the Franchise Agreement.
What This Means For Similar Cases
Venue vs Seat Distinction is Crucial
Mere designation of a place for arbitration does not automatically make it the seat. Courts must examine the entire agreement, especially exclusive jurisdiction clauses, to ascertain the parties’ intention. A venue provision alone is insufficient to oust the jurisdiction of the courts designated by an exclusive jurisdiction clause.
- Look beyond the arbitration clause for governing law or jurisdiction provisions.
- Apply the three-condition test from BGS SGS SOMA to assess whether a venue can be treated as the seat.
- Remember that the seat determines which courts have supervisory jurisdiction over arbitral proceedings.
Governing Law Clause Determines Juridical Seat
When an agreement contains an exclusive jurisdiction clause, it prevails over conflicting venue provisions in the arbitration clause to fix the seat. The principle expressio unius est exclusio alterius operates to exclude other courts once the parties have agreed on exclusive jurisdiction.
- An exclusive jurisdiction clause is a strong indicator of the parties’ intent regarding the seat.
- Even if the arbitration clause names a different place for proceedings, the seat follows the exclusive jurisdiction clause.
- Courts at the place named in the exclusive jurisdiction clause alone can entertain applications under Section 11(6).
Drafting Clarity Prevents Jurisdictional Conflicts
To avoid disputes like the present one, parties should draft arbitration agreements with clarity on the seat. Contradictory clauses invite judicial interpretation and increase litigation risk.
- Clearly state the seat of arbitration in a single clause.
- Avoid mentioning multiple places for arbitration unless the intention is unequivocal.
- Use exclusive jurisdiction clauses to reinforce the chosen seat and oust other courts.
