The Punjab and Haryana High Court has clarified a critical jurisdictional ambiguity in statutory arbitrations under the National Highways Act, 1956, holding that the seat of arbitration is determined by the place where proceedings are conducted and the award is rendered - not by the location of the acquired land or the revenue district of the claimant. This ruling resolves conflicting interpretations across lower courts and reinforces the primacy of party conduct and arbitral procedure over territorial convenience.
Background & Facts
The Dispute
The dispute arises from land acquisitions by the National Highways Authority of India (NHAI) for the four-laning of the Amritsar-Bathinda section of NH-15 in Punjab. Under Section 3G(5) of the National Highways Act, 1956, when landowners dispute the compensation awarded by the Competent Authority for Land Acquisition (CALA), they may apply to the Central Government for referral to an Arbitrator. The Central Government, by order dated 17.08.2015, appointed the Commissioner of the Faridkot Division as the Arbitrator for the revenue districts of Faridkot and Bathinda. The Arbitrator, based in Faridkot, conducted all hearings and issued awards from Faridkot, even though the acquired land was located in Bathinda.
Key Facts
- The Central Government’s order dated 17.08.2015 appointed the Commissioner, Faridkot Division, as Arbitrator for revenue districts of Faridkot and Bathinda.
- All arbitral proceedings, including hearings and evidence recording, were conducted at Faridkot.
- The arbitral awards were signed and issued by the Arbitrator at Faridkot on 18.01.2019.
- The land subject to acquisition in all 95 cases was situated in the revenue district of Bathinda.
- The Faridkot Division comprises three districts: Faridkot, Bathinda, and Mansa.
- In 83 cases, objections under Section 34 of the Arbitration and Conciliation Act, 1996 were filed at Bathinda.
- The Additional District Judge, Bathinda, initially returned these objections on the ground that Faridkot was the seat of arbitration.
- On 29.04.2023, the same court restored the objections, relying on a limited observation by the Supreme Court in SLPs 2080-20809 of 2022.
- In the remaining 12 cases, objections were directly filed and entertained at Bathinda.
Procedural History
- 17.08.2015: Central Government issues order appointing Commissioner, Faridkot Division, as Arbitrator for Faridkot and Bathinda districts.
- 18.01.2019: Arbitrator passes award at Faridkot in all cases.
- 2019 - 2022: Objections under Section 34 filed at Bathinda; returned by Additional District Judge, Bathinda, citing lack of territorial jurisdiction.
- 30.09.2022: Coordinate Bench of Punjab and Haryana High Court, in Civil Revision No. 259 of 2022, holds that Faridkot is the seat of arbitration and only Faridkot Court has jurisdiction over Section 34 objections and execution.
- 29.11.2022: Supreme Court dismisses SLPs 2080-20809 of 2022 with observation: "since objections under Section 34 have been filed in Bathinda and respondents have raised objection on territorial jurisdiction, the aspect of territorial jurisdiction will not be influenced by any observations made in the impugned judgment."
- 29.04.2023: Additional District Judge, Bathinda, restores 83 objections under Section 34, citing the Supreme Court’s observation.
- 20.04.2026: Punjab and Haryana High Court delivers judgment in 95 connected cases.
The Parties' Positions
Petitioners (Landowners): Argued that the seat of arbitration is Faridkot, as all proceedings and the award occurred there. They contended that the Additional District Judge, Bathinda, lacked jurisdiction to entertain or restore Section 34 objections.
Respondents (NHAI and Union of India): Argued that Bathinda, being the location of the land and a revenue district under the Arbitrator’s jurisdiction, has concurrent jurisdiction. They relied on the Supreme Court’s observation in SLPs 2080-20809 of 2022 and claimed practical hardship in transferring cases to Faridkot.
Relief Sought
The petitioners sought quashing of the restoration orders dated 29.04.2023 and directions to return all pending Section 34 objections filed at Bathinda to the appropriate court at Faridkot. They also sought a declaration that Faridkot is the exclusive seat of arbitration.
The Legal Issue
The central question was whether, in a statutory arbitration under Section 3G(5) and (6) of the National Highways Act, 1956, the seat of arbitration for the purpose of filing objections under Section 34 of the Arbitration and Conciliation Act, 1996, is determined by the place where the arbitral proceedings are conducted and the award is rendered, or by the location of the subject land or the revenue district specified in the appointing order.
Arguments Presented
For the Appellant/Petitioner
The petitioners relied on BGS SGS Soma JV v. NHPC Ltd. (2020) 4 SCC 234 and Mankastu Impex v. Airvisual Ltd. (2020) 5 SCC 399 to argue that when the seat is not expressly designated, the venue - where proceedings are held and the award is signed - becomes the juridical seat. They emphasized that all hearings occurred at Faridkot, the award was signed there, and no party objected to the venue during proceedings. They contended that Section 31(4) of the Arbitration Act deems the award to have been made at the place determined under Section 20, which in this case was Faridkot. They further argued that the Supreme Court’s observation in SLPs 2080-20809 of 2022 was not a ratio decidendi and could not override established principles of seat determination.
For the Respondent/State
The respondents argued that the Central Government’s 2015 order, by listing both Faridkot and Bathinda as revenue districts under the Arbitrator’s jurisdiction, conferred concurrent territorial jurisdiction on both districts. They contended that since the cause of action arose in Bathinda (land acquisition), Section 20(1) and (2) of the Arbitration Act permitted Bathinda to be the seat. They also cited hardship due to case load in Faridkot and relied on a Madhya Pradesh High Court judgment to argue that statutory arbitrations do not automatically make the venue the seat. They interpreted the Supreme Court’s observation as permitting Bathinda Court to retain jurisdiction.
The Court's Analysis
The Court undertook a detailed analysis of the statutory framework under Section 3G(5) and (6) of the National Highways Act, 1956, and the Arbitration and Conciliation Act, 1996. It noted that while the appointment of the Arbitrator was statutory, once appointed, the proceedings were governed by the Arbitration Act, including Section 20 on the place of arbitration and Section 31(4) on the deemed place of the award.
The Court emphasized that the absence of an express agreement on seat or venue did not preclude the application of the BGS SGS Soma JV principle. The Court held that where the parties, by their conduct, participate in proceedings at a single venue and the award is rendered there, that venue becomes the juridical seat - even in statutory arbitrations. The Court observed:
"The factual position pertaining to the place of conducting the arbitral proceedings as well as the conduct of the parties becomes the determining factor... all the proceedings before the learned Arbitrator were held at Faridkot and secondly, the award was passed and signed at Faridkot."
It rejected the respondents’ argument that the revenue district listing in the 2015 order conferred jurisdiction on Bathinda, clarifying that the order merely defined the Arbitrator’s functional jurisdiction, not the seat for Section 34 proceedings. The Court further held that the Supreme Court’s observation in SLPs 2080-20809 of 2022 was not a binding precedent but a procedural observation, and could not override the settled law on seat determination.
The Court also dismissed the argument of practical hardship, stating that administrative convenience cannot override statutory jurisdiction. It reaffirmed that Section 31(4) of the Arbitration Act deems the award to have been made at Faridkot, thereby vesting exclusive jurisdiction in the Faridkot Court.
The Verdict
The petitioners succeeded. The Court set aside the orders dated 29.04.2023 restoring 83 Section 34 objections filed at Bathinda. The Court directed that all 83 objections be returned to the respondents for filing before the appropriate court at Faridkot. In the remaining 12 cases where objections were pending at Bathinda, the Court directed the Additional District Judge, Bathinda, to return them to the respondents for filing at Faridkot. The Court held that Faridkot is the exclusive seat of arbitration for all cases arising under the 2015 appointment order.
What This Means For Similar Cases
The Seat Is Determined by Conduct, Not Geography
- Practitioners must now focus on where arbitral hearings occurred and where the award was signed - not where the land or subject matter is located.
- In statutory arbitrations, the absence of a contractual seat does not negate the application of BGS SGS Soma JV; conduct of parties and venue of award are decisive.
- Revenue district boundaries or administrative jurisdiction of appointing authorities do not determine the juridical seat.
Restoration of Objections Without Legal Basis Is Invalid
- Courts cannot restore objections previously returned on jurisdictional grounds merely by citing a non-ratio observation from a higher court.
- Any order restoring a Section 34 petition must be grounded in a clear legal basis, not procedural ambiguity.
- The doctrine of res judicata applies to jurisdictional determinations; once returned, objections cannot be revived without a change in law or fact.
Statutory Arbitrations Are Not Exempt from Seat Doctrine
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The source of arbitration (statutory vs. consensual) affects appointment, not procedure.
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Once the Arbitration Act applies, the principles of seat and venue govern jurisdiction for challenges under Section 34.
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Practitioners must document venue and award location meticulously in statutory arbitrations to avoid jurisdictional disputes.
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All arbitral awards must clearly state the place of arbitration under Section 31(4).
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Parties should not assume concurrent jurisdiction exists merely because multiple districts are listed in an appointing order.
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The judgment reinforces that jurisdictional clarity in arbitration is non-negotiable and must be determined by law, not convenience.
