The Madhya Pradesh High Court has clarified that when an arbitration agreement fails to designate a seat or venue, the court with territorial jurisdiction under the Code of Civil Procedure may appoint an arbitrator under Section 11. This decision reinforces the principle that procedural gaps in arbitration clauses must be filled by reference to statutory defaults, not by dismissing applications on technical grounds.
Background & Facts
The Dispute
The petitioner, Madhya Pradesh Fisheries Federation Co-op Maryadit, is a state-established apex cooperative for fisheries development with regional offices across Madhya Pradesh. The respondent, Anil Yadav, is an individual contractor engaged for fishing and ancillary operations at the Mahi water body in District Dhar. An agreement dated 08.07.2021 was executed for a term extending from 07.07.2021 to 15.06.2028, with a total consideration of Rs. 1,33,17,336.
Key Facts
- The agreement (Annexure A-1) included a clause (Clause 47) providing for arbitration in case of disputes.
- The respondent failed to make payments as stipulated under the agreement.
- On 29.09.2023, the petitioner issued an order terminating the contract due to non-payment.
- The respondent did not challenge the termination order.
- On 19.07.2024, the petitioner issued a formal notice invoking arbitration under Clause 47, demanding payment of arrears amounting to Rs. 10,73,667.
- The respondent did not consent to the proposed arbitrator, prompting the petitioner to file the present application under Section 11 of the Arbitration and Conciliation Act, 1996.
Procedural History
- 08.07.2021: Agreement executed between petitioner and respondent for fishing operations at Mahi reservoir, Dhar.
- 29.09.2023: Petitioner terminated contract due to non-payment of dues.
- 19.07.2024: Petitioner issued notice invoking arbitration under Clause 47 of the agreement.
- 16.03.2026: Application under Section 11 filed before the Madhya Pradesh High Court at Indore.
- 13.05.2026: Judgment pronounced by Justice Pavan Kumar Dwivedi.
The Parties' Positions
Petitioner: Argued that the arbitration clause is valid and enforceable, that a clear dispute exists regarding unpaid dues, and that the High Court at Indore has territorial jurisdiction as the contract was executed and performed in Dhar, which falls within its jurisdiction.
Respondent: Contended that: (1) the arbitration was invoked beyond the 6-month limitation period under Clause 47, which allegedly commenced on 29.09.2023 (date of termination); (2) the Civil Court at Bhopal has exclusive jurisdiction over disputes arising from the arbitrator’s award, implying that no other court - including Indore - can appoint an arbitrator.
Relief Sought
The petitioner sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, to adjudicate the dispute over unpaid arrears of Rs. 10,73,667.
The Legal Issue
Can a court appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, when the arbitration clause does not specify a seat or venue, and the respondent raises objections regarding limitation and jurisdiction?
Arguments Presented
For the Petitioner
The petitioner’s counsel relied on the Delhi High Court’s decision in M/s. Kings Chariot v. Mr. Tarun Wadhwa to argue that where no seat or venue is specified, the court with territorial jurisdiction under the Code of Civil Procedure may entertain the Section 11 application. The dispute arose only upon non-payment after the notice of demand, not upon termination. The agreement was executed and performed in Dhar, within the territorial jurisdiction of the Indore Bench. The 6-month limitation period under Clause 47 had not been breached because the dispute commenced only when payment was refused after the 19.07.2024 notice.
For the Respondent
The respondent’s counsel contended that the dispute commenced on 29.09.2023, the date of contract termination, and since the arbitration notice was issued on 19.07.2024 - beyond the 6-month window - the invocation was time-barred. They also cited Anshul Chawla v. Taskus India Pvt. Ltd. to argue that jurisdictional exclusivity clauses in arbitration agreements must be respected, and that the Civil Court at Bhopal’s exclusive jurisdiction over arbitral awards implied that no other court could appoint an arbitrator.
The Court's Analysis
The Court rejected the respondent’s limitation argument on the ground that the termination order was not contested and did not constitute the dispute. The dispute, as per the agreement’s context, arose only when payment was demanded and refused. The Court observed:
"The order of termination of contract is not the relevant date for considering the initiation of dispute between the parties. It is only when the demand was raised and the amount was not paid, the dispute arose."
Regarding jurisdiction, the Court noted that Clause 47 did not specify a seat or venue for arbitration. The reference to the Civil Court at Bhopal pertained only to challenges against the arbitral award, not to the appointment of the arbitrator. The Court held that in the absence of a designated seat, Section 2(1)(e) and Section 20 of the Code of Civil Procedure govern territorial jurisdiction. Since the agreement was executed in Dhar, the subject matter (Mahi reservoir) is located in Dhar, and the respondent resides in Dhar - all within the territorial jurisdiction of the Indore Bench - the Court was competent to entertain the application.
The Court distinguished Anshul Chawla on the basis that it involved a clause mandating institutional arbitration under MCIA rules, whereas the present agreement contained no such institutional reference. The Court emphasized that the absence of a seat or venue does not invalidate arbitration; it merely triggers statutory defaults under the Act.
The Verdict
The petitioner succeeded. The Court appointed Hon’ble Shri Justice Rajendra Kumar Verma (Retd.) as arbitrator. The Court directed the Principal Registrar to obtain a declaration of impartiality and independence from the proposed arbitrator in accordance with Section 11(8) and the Sixth Schedule of the Arbitration and Conciliation Act, 1996. The matter was listed for further hearing on 15.05.2026.
What This Means For Similar Cases
Arbitration Clauses Without Seat or Venue Are Still Enforceable
- Practitioners may now confidently file Section 11 applications before courts where the contract was executed, performed, or where the respondent resides, even if the arbitration clause is silent on seat or venue.
- Courts will apply Section 20 of the CPC and Section 2(1)(e) of the Arbitration Act to determine jurisdiction, not dismiss applications on technical grounds.
Limitation Periods in Arbitration Clauses Must Be Tied to the Actual Dispute
- The date of termination or breach does not automatically trigger the limitation clock; the dispute commences only when a clear demand is made and refused.
- Parties must carefully document the date of the first formal demand for payment to establish the correct limitation period.
Jurisdictional Objections Must Be Raised in Writing
- Oral objections to jurisdiction, especially those not pleaded in the reply, are not sustainable.
- Any claim of exclusive jurisdiction over appointment must be explicitly stated in the arbitration clause; silence on seat implies statutory default.
