Clause 32 Cannot Be Ignored | Delhi HC Dismisses Section 29A Petition For Lack Of Jurisdiction | Upholds Exclusive Jurisdiction Of Gautam Budh Nagar
Isabella Mariam
The High Court of Delhi Single Bench of Justice Jasmeet Singh has dismissed a petition seeking extension of the mandate of a sole arbitrator under Section 29A (5) of the Arbitration and Conciliation Act, 1996. The court held that it lacked territorial jurisdiction to entertain the petition, in view of the parties' arbitration agreement which specifically stated that any suit or application for enforcement of the arbitration clause must be filed in the competent court at Gautam Budh Nagar. The court recorded that despite the procedural order issued by the arbitrator fixing New Delhi as the seat of arbitration, the contractual stipulation of exclusive jurisdiction in Gautam Budh Nagar prevailed. Consequently, the court dismissed the petition on the ground of lack of jurisdiction.
The petitioner, M/s Viva Infraventure Pvt. Ltd., is a private limited company engaged in construction and maintenance of roads and buildings, and the respondent, New Okhla Industrial Development Authority (NOIDA), is a statutory body constituted under the Uttar Pradesh Industrial Development Act, 1976. The dispute between the parties arose from a contract awarded to the petitioner for the construction of a 60-meter-wide road project in Noida, pursuant to a tender issued on 21 February 2015. The petitioner submitted its bid on 11 June 2015, and was awarded the contract through a Letter of Award dated 19 October 2015. On the same date, a Contract Agreement was executed.
The arbitration clause was incorporated as Clause 34 of the General Conditions of Contract attached to the Contract Agreement. It provided that disputes relating to the execution of the work would be referred to the sole arbitration of a person appointed by the CEO of the respondent. The clause also stated that such an arbitrator could be a government or public servant and that the arbitration award would be subject to the provisions of the Arbitration and Conciliation Act, 1996.
Following disputes between the parties, the petitioner approached the High Court of Allahabad under Section 11 of the Arbitration and Conciliation Act, 1996, for appointment of a sole arbitrator. The High Court of Allahabad, by order dated 13 September 2022 in ARB P. 113/2022, appointed Justice G.S. Singhvi (Retired), former Judge of the Supreme Court of India, as the sole arbitrator. The arbitrator entered reference on 15 October 2022 and issued a procedural order on the same date designating New Delhi as the seat of arbitration.
The pleadings in the arbitral proceedings were completed on 7 April 2023. Under Section 29A (1) of the Arbitration and Conciliation Act, 1996, the one-year period for concluding arbitral proceedings commenced from 23 March 2023. With mutual consent under Section 29A (3), the parties extended the mandate of the arbitrator by a further six months until 21 September 2024. At the time of the petition, the arbitral proceedings had reached the stage of final arguments.
The petitioner submitted that although Clause 32 of the Contract Agreement conferred exclusive jurisdiction on courts at Gautam Budh Nagar, the arbitrator's procedural order changed the seat of arbitration to Delhi. The petitioner relied on decisions such as BGS SGS Soma JV v. NHPC Limited, (2020) 4 SCC 234, and Inox Renewables Ltd. v. Jayesh Electricals Ltd., (2023) 3 SCC 733, to argue that once the seat was fixed in New Delhi, only the courts at New Delhi would have jurisdiction under Section 2(1)(e) of the 1996 Act.
The petitioner further relied on the coordinate bench decision in Ashiyana Infrahomes Pvt. Ltd. v. Adani Power Ltd., 2018 SCC OnLine Del 9110, to contend that once the parties mutually agreed to change the seat from Gautam Budh Nagar to Delhi, and the arbitration proceeded accordingly, Delhi courts had jurisdiction.
The respondent, on the other hand, argued that Clause 32 of the Contract Agreement specifically conferred exclusive jurisdiction on courts at Gautam Budh Nagar and precluded jurisdiction of any other court. It was argued that the arbitrator could not override a contractual clause on jurisdiction. Further, it was pointed out that at the time of passing the procedural order dated 15 October 2022, the Contract Agreement was not available to the arbitrator, and thus the arbitrator could not have exercised powers under Section 20(2) to change the seat.
The respondent relied on the judgment of the Supreme Court in BBR (India) (P) Ltd. v. S.P. Singla Constructions (P) Ltd., (2023) 1 SCC 693, to argue that once the seat is contractually fixed, it remains static. The respondent also stated that the petition under Section 11 had been filed in the Allahabad High Court by the petitioner itself, accepting Gautam Budh Nagar as the seat and place of jurisdiction.
The respondent further submitted that it had already filed an application before the arbitrator seeking clarification/modification of the procedural order to state that New Delhi was merely the venue and not the seat.
Justice Jasmeet Singh referred to Section 2(1)(e) and Section 20 of the Arbitration and Conciliation Act, 1996. He stated: "A bare perusal of Section 20 of the 1996 Act reveals the principle of party autonomy. The provision governs the 'place of arbitration.'" He noted that under Section 20(1), parties are free to agree on any place as the seat, and in its absence, the arbitral tribunal may fix the seat under Section 20(2). However, he recorded that "Section 20(3), however, pertains only to procedural convenience—allowing the tribunal to hold hearings at any venue it considers appropriate."
Examining Clause 32 of the Contract Agreement, the Court recorded that the clause states: "Any suit or application for the enforcement of this arbitration clause shall be filed in the competent court at Gautam Budh Nagar, no other court or any other district or Pradesh or outside Uttar Pradesh shall have any jurisdiction in the matter."
The Court stated: "The argument of the petitioner is that the first part of the arbitration clause... must be read along with the procedural order... contemplating the seat of arbitration to be Delhi. Hence, the jurisdiction of the 'Delhi' courts under Section 2(1)(e) of the Act is established."
However, the Court held: "In my view, there is, in fact, no ambiguity on this aspect. The courts have time and again held that in cases where the arbitration clause specifies a particular 'venue' for arbitration, such designation is to be construed as the 'seat' of arbitration, unless there is a clear indication to the contrary."
The Court referred to BGS SGS Soma to elaborate that when the entire arbitration proceedings are held at a place, it could be construed as the seat. However, in the present case, the Court observed: "It is also pertinent to mention the second part of Clause 32 i.e., any suit or application for the enforcement of this arbitration clause shall be filed in the competent at Gautam Budh Nagar. The same cannot be ignored."
Relying on Precitech Enclosures Systems Private Limited v. Rudrapur Precision Industries and Another, 2025 SCC OnLine Del 1609, the Court stated: "Where an agreement contains an exclusive jurisdiction clause covering the arbitration clause, the court identified in the exclusive jurisdiction clause will be deemed to have supervisory jurisdiction over the seat of arbitration."
The Court rejected the petitioner's reliance on Inox Renewables and Ashiyana Infrahomes on the ground that neither of those cases involved an express exclusive jurisdiction clause.
The Court further observed: "The procedural order dated 15.10.2022 fixing the venue/seat of arbitration at New Delhi is only an order under Section 20(3) of the 1996 Act and does not override Clause 32 of the Contract agreement."
"It cannot be said that there was clear and unequivocal consent of the respondent for change of seat of arbitration to New Delhi."
The Court concluded its judgment with the following directions: "For the said reasons, the petition is dismissed on the ground of lack of territorial jurisdiction."
Advocates Representing the Parties:
For the Petitioner: Mr. Suhail Dutt, Senior Advocate with Mr. Vikas Tiwari, Mr. Kumar Deepraj, Ms. Arushi Rathore, Advocates
For the Respondent: Mr. Suvigya Awasthy, Mr. Vivek Joshi, Mr. Rohan Gulati, Advocates
Case Title: M/s Viva Infraventure Pvt. Ltd. v. New Okhla Industrial Development Authority
Neutral Citation: 2025: DHC:5127
Case Number: O.M.P.(MISC.) (COMM.) 606/2024
Bench: Justice Jasmeet Singh
