Full Text
$ ~ J HIGH COURT OF DELHI
JUDGMENT
SNS ENGINEERING PVT. LTD. .....Petitioner
Through: Mr. Jittin Dua, Adv.
Through: Ms. Ratna Vora, Ms. Nazi Parveen, Mr. Miren Priyadarshi, Advs.
1. This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“1996 Act”) seeking appointment of an Arbitrator for adjudication of disputes between the parties arising out of the Work Order/ Acceptance Letter dated 21.10.2021.
FACTUAL MATRIX
2. The petitioner is a Private Limited Company, duly incorporated and registered under the provisions of the Companies Act, 1956, having its office at Plot No. 48, 3rd Floor, Vishal Tower, Wazirabad, Sector- 52, Gurugram-122003. The petitioner is a contractor and service provider operating in the field of mechanical, electrical, and airconditioning industry and engaged in executing contracts, assignments, and projects related to air-conditioning, electrification, construction, installation and supply of ancillary relevant materials thereto.
3. Respondent No. 1 is also a Private Limited Company, engaged in the business of construction and allied services, acting through its principal Director i.e. respondent No. 2.
4. In relation to an upcoming project of the respondents at Uttarakhand Bhawan, Chanakyapuri, New Delhi, (“Project”) the respondents approached the petitioner for air-conditioning services. Accordingly, the petitioner gave its quotation to the respondents on 06.10.2021. After various communications between the parties, vide letter dated 21.10.2021, the respondents accepted the petitioner‟s quotation along with the proposed terms and conditions (“Acceptance Letter”). Accordingly, the respondents placed an order with the petitioner for the HVAC system for the Project for a total contract value of Rs. 2,85,93,782/- plus applicable GST.
5. The Acceptance Letter contains the arbitration clause being Clause No. 14 and the same reads as under:- “14) Arbitration: This subcontract and all other matters, shall in all respect be construed and be operative in conformity with Indian laws and shall be subject to the jurisdiction of court in Ahmedabad only. For any decisions on any arbitration, HPL‟s Managing Director shall be the final authority.”
6. It is stated that as per the terms and conditions agreed upon between the parties under the Acceptance Letter, the respondents had undertaken and assured the petitioner that payments would be made in a timely manner against the monthly Running Bills raised by the petitioner.
7. Since certain disputes arose between the parties, the respondent No. 1 invoked arbitration via letter dated 29.08.2024 titled as “Appointment of sole arbitrator to resolve the disputes that have arisen out of the work order dated 21.10.2021” and requested its own Managing Director i.e. respondent No. 2, to appoint a Sole Arbitrator. The petitioner replied to the said letter on 09.09.2024, stating that in view of the settled law pertaining to the appointment of an Arbitrator, either a consensual person or a neutral person is to be appointed independently by the Court and rejected the appointment of any Arbitrator by respondent No. 2. Petitioner further suggested three names for an Arbitrator. The said names as proposed by the petitioner were denied by the respondents vide letter dated 14.10.2024.
8. Hence, the present petition has been filed.
9. The respondents have also filed a petition under Section 11(6) of the 1996 Act being ARB. P. 46/2025, before the Hon‟ble High Court of Gujarat and notice has been issued to the petitioner in the same.
10. At the outset, the respondents have challenged the jurisdiction of this Court to entertain the present petition. It is submitted that considering the clear and unambiguous arbitration clause being Clause No. 14 of the Acceptance Letter (reproduced above), the arbitration and all other matters, in all respect, are subject to the jurisdiction of “court in Ahmedabad only”. Hence, this Hon‟ble Court does not possess the territorial jurisdiction to adjudicate the present petition and therefore, the petition is liable to be dismissed for want of territorial jurisdiction.
11. In this regard, reliance is placed upon the following judgments: (1) Swastik Gases (P) Ltd. v. Indian Oil Corporation Ltd. (2013) 9 SCC 32; (2) B.E. Simoese Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd. (2015) 12 SCC 225; (3) Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd. (2017) 7 SCC 678 and (4) Brahmani River Pellets Ltd. v. Kamachi Industries Ltd. (2020) 5 SCC 462. On behalf of the Petitioner
12. In response to the respondents‟ objection regarding this Court‟s jurisdiction to entertain the present petition, the petitioner submits that this Court has the jurisdiction to entertain the present petition as the cause of action has arisen in New Delhi. It is stated that the Acceptance Letter was issued from and accepted at the respondents‟ New Delhi office. The respondents also possess a valid GST registration in Delhi. It is further submitted that all the pre-contract negotiations, discussions, meetings, and finalization of terms between the parties took place at the respondents‟ New Delhi office. The petitioner‟s quotation was also accepted by the respondents at New Delhi. The entire scope of work under the Acceptance Letter was executed by the petitioner at the respondents‟ premises at Uttarakhand Niwas, Chanakyapuri, New Delhi. Moreover, all Running Bills were submitted by the petitioner to the respondents‟ New Delhi office.
13. Hence, it is submitted that since the entire cause of action in respect of the balance claim of the petitioner have accrued at New Delhi, therefore this Court is fully competent to entertain the present petition, as per Section 20 of the Code of Civil Procedure, 1908 (“CPC”).
ANALYSIS AND FINDINGS
14. I have heard learned counsels for the parties.
15. The law is well settled that even in absence of the express term „seat‟ in the arbitration clause/ agreement, the Court which is granted the exclusive jurisdiction will be deemed to have supervisory jurisdiction over the arbitral proceedings[1] i.e., will be the seat of the arbitration. Most recently, the Hon‟ble Supreme Court in M/S Activitas Management Advisor Private Limited v. Mind Plus Healthcare Private Limited, SLP (C) No. 27714/2024, vide order dated 05.08.2025, while relying on Brahmani River Pellets (supra), held that since the arbitration clause being Clause No. 10 therein, conferred exclusive jurisdiction on Mumbai High Court, the seat of arbitration would be Mumbai. The operative portion of the said order is extracted below:-
16. The view taken by the Hon‟ble Supreme Court squarely covers the issue before this Court in the present petition. In the present case, Clause No. 14 of the Acceptance Letter i.e. the arbitration clause, expressly holds that any differences arising out of or in connection with the Acceptance Letter will be subject to the „jurisdiction‟ of Court at Ahmedabad only. Although Clause No. 14 does not explicitly Swastik Gases (supra), paragraph No. 32; B.E. Simoese Von Staraburg Niedenthal (supra), paragraph No. 12. use the term „seat‟, the use of the word „jurisdiction‟ in the arbitration clause clearly stipulates the parties‟ intention to submit to the exclusive jurisdiction of Court at Ahmedabad only. Therefore, in view of the clear wording of Clause No. 14, Ahmedabad stands constituted as the seat of arbitration. Only the Court at Ahmedabad have the exclusive jurisdiction to regulate the arbitral proceedings in the present case and consequently also the jurisdiction to appoint an Arbitrator under Section 11(6) of the 1996 Act.
17. Additionally, while dealing with a similar jurisdictional issue, this Court in Sanjay Kumar Verma v. Planning and Infrastructural Development Consultants Pvt. Ltd., 2024:DHC:99, observed as under:-
the parties‟ evident consensus on this matter. The parties have mutually and explicitly agreed to place the arbitration under the exclusive jurisdiction of the courts in Patna. This agreement effectively establishes Patna as the seat of arbitration. Consequently, it is the court in Patna that holds the jurisdiction to appoint an Arbitrator under Section 11(6) of the Arbitration Act.” (Emphasis supplied)
18. Similarly, the language used in Clause No. 14 is categorical and exclusionary, leaving no scope for doubt regarding the parties‟ intention to confer exclusive jurisdiction upon the Court at Ahmedabad with regards to disputes arising from the Acceptance Letter and thereby, demonstrating their intention to choose Ahmedabad as the seat of arbitration. While interpreting such exclusive jurisdictional clauses it must be borne in mind, that when parties agree in the arbitration clause/ agreement to vest exclusive jurisdiction in a particular Court for adjudication of any disputes thereof, it is to be presumed that they intended that Court only to have supervisory control.
19. As regards the contention raised by the petitioner that since the cause of action has arisen in New Delhi, this Court has the jurisdiction to entertain the present petition by relying on Section 20 of CPC, the same is meritless. The law is clear on the aspect that parties have right to select a neutral seat of arbitration, irrespective of the place of cause of action or fulfillment of contractual obligations, as observed by the Hon‟ble Supreme Court in Indus Mobile Distribution (supra). The relevant paragraph of the said judgment is extracted below: -
20. Additionally, when arbitration clause provides exclusive jurisdiction, the concept of cause of action becomes irrelevant, as observed by a Coordinate Bench of this Court in G R Builders Through Its Prop Sanjeev Kumar v. M/S Metro Speciality Hospitals Pvt. Ltd. & Ors, 2023:DHC:7050. The relevant paragraph of the said judgment is extracted below: -
the purposes of Section 11. Location of seat of arbitration is what will be a relevant consideration. In the present case, as per clause 31.16, the place of arbitration is Faridabad (Haryana), which would be the chosen as the seat, since seat has not been separately named and there is no other contrary indicia to show that the place of arbitration was not intended to be the seat of arbitration.”
21. In view of the settled law as observed above, irrespective of the fact where the cause of action has arisen, since the seat of arbitration is Ahmedabad, as mutually agreed by the parties via Clause No. 14, such agreement overrides the place of cause of action and thereby, only Court at Ahmedabad will have the supervisory jurisdiction over the arbitral proceedings.
CONCLUSION
22. In view of the above discussion, this Court does not have the territorial jurisdiction to entertain the present petition. The petition is dismissed on the ground of lack of territorial jurisdiction, along with pending applications, if any.
JASMEET SINGH, J SEPTEMBER 09, 2025/ (HG)