Madhya Pradesh High Court
M/S Colliers Internatinal (India) ... vs Patanjali Ayurved Limited Through Its ... on 10 September, 2025
NEUTRAL CITATION NO. 2025:MPHC-IND:25905
1 AC-45-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PAVAN KUMAR DWIVEDI
ARBITRATION CASE No. 45 of 2025
M/S COLLIERS INTERNATINAL (INDIA) PROPERTY SERVICE PVT.
LTD. THROUGH ITS AUTHORIZED REPRESENTATIVE A
Versus
PATANJALI AYURVED LIMITED THROUGH ITS DIRECTOR
Appearance:
Shri Mohammad Ibrahim - with Shri Mr. Rizwan Khan, Advocate and
with Ms. Sachi Chopra - Advocate for the petitioner.
Shri Sanjay Kumar Shandilya, learned counsel and Shri Kshitij Vyas,
learned counsel for the respondent No.1.
Heard on : 10.9.2025
Pronounced on : 03.11.2025.
.......................................................................................................................................................
ORDER
The present application has been filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator with an allegation that the applicant invoked the arbitration clause but the respondent failed to respondent thus there is no consensus for appointment of arbitrator.
2. Short facts of the case are that the applicant is a real estate services and investment management company. It provides services including advisory and consulting project management and construction services. The registered address of the applicant is Unit 601, 6th Floor, A Wing, One BKC, Plot C- 66, Bandra (East) Mumbai City, Mumbai, Maharashtra (India) and the Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 2 AC-45-2025 address where the books of accounts of the applicant are maintained is First Floor Sunningdale, Embassy Golf Links Business Park Domlur, Domlur, Bangalor, Bangalore North, Karnataka India.
3. That the respondent is an Indian fast moving consumer goods company (FMCG) Company engaged in the manufacture and sale of Ayurvedic Harbal and Natural Consumer Product including food items, personal care products and health supplements. The registered address of the respondent is 3rd Floor, Plot No.231, Sector 9, Dwarka, Rajnagar - II, South West, Delhi, New Delhi, India. Address where the the books of account of the respondent are maintained is Patanjali Food and Herbal Park, Haridwar - Laxer Road, Padarth, Haridwar, Uttarakhand, India.
4. The respondent approached the petitioner for construction of a warehouse, biscuit plant and floor mill in Noida pursuant to which work order No.5500030689 was issued for executing civil work at the District Plant Patanjali, Noida. A separate work order was issued ie., work order No.5500030685 for executing civil work at Patanjali Noida warehouse and the third work order ie., No.5500030691 was issued for executing civil work at Patanjali Noida Floor Mill. Pursuant to these work order the E-mail was sent by the petitioner on 26/7/2023 thereby intimating the respondent that within a period of 15 days it would be mobilizing resources and shall commence the assigned work. A meeting was held on 4/8/2023 with respect to the aforesaid work in which it was agreed upon that the respondent shall ensure termly payment to the petitioner in terms of Clause 19 of the minutes of meeting dated 4/8/2023. It was agreed that 70% of the total amount would Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 3 AC-45-2025 be released by the respondent within 7 days and for remaining 30% payment was to be made within following 15 days. In a subsequent meeting held on 16/8/2023 it was agreed that the respondent would be responsible for providing electricity at the project site but it failed to provide electricity connection in timely manner causing disruption in the work. Thus further meetings were held on 16/8/2023, 26/8/2023, 2/9/2023 and 20/9/2023 in which certain terms were agreed upon. Subsequent to the above meetings a work order was issued on 29/6/2024 ie., work order No.5500033247 for further civil work to be done at the Patanjali Ware House, Noida for a value of Rs.40,83,197/-. However on 3/7/2024 the respondent issued an E-mail thereby demanding immediate surrender of the project and de-scoping of the oven area in violation of the contractual terms under the work orders to which the applicant registered its objection. The applicant submitted its final bill on 4/12/2024 to the tune of Rs.12,65,55,403/- for the civil works executed at the biscuit plant warehouse site etc. However, despite repeated communications, the respondent did not pay the bills. Ultimately the applicant invoked arbitration by issuing notice dated 1/3/2025. The respondent replied to the said notice vide its reply dated 21/3/2025 whereby rejecting the referral of the dispute to the arbitration and denied all the claims. Learned counsel in wake of this refusal has filed the present application.
5. Learned counsel for the appellant by referring to Clause 16(b) of the warehouse order No.2 submitted that in terms of sub-clause b of Clause 16 of the work order the venue of the arbitration has been provided at Indore. Thus Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 4 AC-45-2025 this Court has the jurisdiction under Section 11 of the Arbitration and Conciliation Act for appointing an arbitrator for resolution of the dispute in the matter. He refers to para 15 of Annexure P/7 in which a specific referral was made to clause 16 of the work order which provides for dispute resolution and submits that by pointing out this Clause arbitration was invoked. He further argues that the respondent denied the same and by referring to para 10 of (Annexure P/8) ie., the reply of the respondent to notice sent by the applicant submits that the only objection raised by the respondent was that the Clause 16 of the work order provides for dispute, arbitration and Court jurisdiction, which was agreed by both the parties any proceeding has to be in compliance of the arbitration clause contained in clause 16. He points out that mention of venue at Indore has been responded to by saying that it was only a typographical error which cannot be the case. In support of his submissions he placed reliance on the judgments of the Hon'ble Apex Court rendered in the case of BGS SGS Soma JV V/s. NHPC Ltd., (2020) 4 SCC 234 , Reliance Infrastructure Ltd. V/s. Madhyanchal Vidyut Vitran Nigam Ltd., (2023) SCC Online Delhi 4894 , Case No.ARB.P 478 / 2025 of Delhi High Court. He thus prays for appointment of an independent arbitrator. He submits that for the convenience of party any retired Judge of High Court available at Delhi can be appointed as an arbitrator for resolution of the dispute.
6. On the other hand the learned counsel for the respondent refers to Clause 16 of the very same work order Annexure P/4 and submits that in sub-clause(a) of Clause 16, jurisdiction has been conferred to Court at Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 5 AC-45-2025 Haridwar. He submits that Clause 16 is an arbitration Clause which clearly provides the seat of arbitration in sub-clause(a) in as much as it states all dispute subject to Court at Haridwar only. Thus he submits that applicant could have filed his application either before the Court at Haridwar or at Delhi but here at Indore the proceedings are not maintainable as this Court does not have jurisdiction in view of the fact that no part of cause of action has arisen here. He submits neither any of the parties are situated within territorial jurisdiction of this Court nor the agreement was executed within the territorial jurisdiction of this Court. He points out that specification of venue of arbitration is only for convenience of all the parties including arbitrator but it cannot be termed as seat of arbitration. He refers to Section 2(e) of the Arbitration and Conciliation Act which provides for definition of Court and then refers to the provisions of Section 20 of the said Act and submits that in view of clear mandate of these provisions the place of arbitration is different than the venue of arbitration. He further points out that all the judgments cited by the counsel for the applicant have a common factor in them, in as much as in all of them there was complete absence of seat of arbitration. Thus the Court treated the venue of arbitration as the seat of arbitration but in the present case in Clause 16(a) seat of arbitration has been provided and in Clause 16(b) venue of arbitration has been provided. As such the convenience of parties cannot confer jurisdiction to this Court. Thus he prays for dismissal of the case.
7. Heard the learned counsel for the parties and perused the record.
"Section 2(e) and Section 20 of the Arbitration and Conciliation Act, 1996 provides as under :-Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:25905 6 AC-45-2025 [(e) "Court" means--
(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;] Section 20 reads as under :-
20. Place of arbitration.--(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at anyplace it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property."
8. It is thus clear that in case of arbitration other than the international commercial arbitration. The principal Civil Court of original civil jurisdiction in a District and High Court in exercise of its ordinary original civil jurisdiction which is having jurisdiction to decide the questions forming the subject matter of the arbitration in case of a suit on the same subject matter would be the Court for the purposes of the Arbitration and Conciliation Act. Similarly in terms of above quoted Section 20 the parties Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 7 AC-45-2025 are free to agree on the place of arbitration failing any agreement the same shall be decided by the arbitral tribunal. Learned counsel for the applicant has placed heavy reliance on sub Clause (b) of Clause 16 of the agreement / work order (Annexure P/4) which provides that the venue for the arbitration proceedings shall be at Indore. However, he completely over looks sub Clause (a) of Clause 16 which provides that all disputes subject to Court at Haridwar only. For the ready reference the Clause 16 of the agreement / work order is quoted herein below which reads as under :-
"16. Disputes, Arbitration and Court Jurisdiction :
a) All disputes subject to Court at Haridwar only.
b) In case of any dispute arises between the parties at any time in connection with the validity, interpretation, implementation or alleged material breach of any provision of this terms and condition of this work order, the parties shall endeavour to settle such dispute amicably. In case parties falls to settle the dispute amicably then the dispute shall be referred to a sole Arbitrator, mutually decided by both the parties with the provisions of the Arbitration and Conciliation Act, 1996 of India. The venue for the arbitration proceeding shall be at Indore and the language of arbitration shall be English. The award passed by the Arbitrator(s) shall be final and binding on both the parties."
9. The reliance as placed by the learned counsel for the applicant on the judgment of Hon'ble Apex Court in the case of BGS SGS Soma JV (supra) appears to be misplaced. The Hon'ble Apex Court in the said case considered the question of seat of arbitration viz a viz venue of the arbitration by considering that where the parties have anchored the arbitral proceedings to one fixed location or place it would indicate that the parties intended such place to be the seat of arbitration. However there is a significant fact which is different in the matter in hand from that case. In the said case there was no mention of any other place. In fact, the only place which was referred as Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 8 AC-45-2025 venue was the place mentioned in the entire agreement but in the present case, two places have been mentioned, one where courts have jurisdiction and the other where the arbitral proceedings are to be held by terming it venue. Thus we have to see the BGS case in above context, in para 82 of the said judgment the Hon'ble Apex Court has held as under :-
"82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the "venue" of the arbitration proceedings, the expression "arbitration proceedings"
would make it clear that the "venue" is really the "seat" of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as "tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue", which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat" of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held" at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue" and not the "seat" of the arbitral proceedings, would then conclusively show that such a clause designates a "seat" of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the "stated venue", which then becomes the "seat" for the purposes of arbitration."
10. However, the Hon'ble Apex Court subsequently in the case of Arif Ajim Co. Ltd. V/s. Micromax Informatics FZE, (2024) SCC Online SC 3212 has considered the question regarding conflict between the seat and venue. The Hon'ble Apex Court after elaborately considering the various aspects of arbitration has considered the criterion for determination of seat of Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 9 AC-45-2025 arbitration. The Hon'ble Apex Court in the said case has held in para 46, 48, 52, 53, 54, 71 and 72 as under:
"46. What has been conveyed in so many words by this Court in NTPC (supra) is that the law which governs the contract including the arbitration agreement, the courts of that system of law will have the supervisory jurisdiction over the arbitration. Where however the parties have expressly chosen a place of arbitration or selected a court of particular country for submission to the jurisdiction or selected the law for conduct of arbitration i.e., curial law, such place will only be regarded as venue, unless such factor is supported by relevant connecting factor sufficient to draw an inference as to what the parties would have intended as regards the applicable law. Thus, a mere place chosen by the parties will only be regarded as a venue and will not be construed as seat unless there is a significant link with such place to be ascertained by applying the 'Closest Connection Test' to determine which place or system of law has the most real with the transaction or dispute.
48. What can be discerned from the above decision of this Court in Enercon (supra) is that for determining the seat of arbitration the closest connection test involves identifying the law with which the agreement to arbitrate has its closest and most real connection. Where the parties have expressly or impliedly provided the law governing the substantive contract, the arbitration agreement and the curial law, the law with which the agreement to arbitrate has its closest and most real connection would be the law of the seat of arbitration. Where the question before the courts involves ascertaining whether a particular place is the seat or venue of arbitration, the place with the closest connection with the law governing the arbitration agreement would be the seat of arbitration. Interestingly, although this Court deliberately did not address whether seat is to be determined based on the closest connection with the law governing the arbitration agreement or the curial law since in the facts of the said case both the law governing the contract and the curial law were the same, yet this Court approvingly referred to two other decisions in Roger Shashoua (1) v. Sharma, [2009] EWHC 957 (Comm) and Sulamérica Cia Nacional de Seguros SA v. Enesa Engelharia SA, [2013] 1 WLR 102 (CA) wherein the seat of arbitration was construed on the basis of the curial law. The relevant observations read as under:--
"105. We are also unable to accept the submission made by Dr. Singhvi that in this case the venue should be understood as reference to place in the manner it finds mention in Section 20(1), as opposed to the manner it appears in Section 20(3) of the Indian Arbitration Act, 1996. Such a submission cannot be accepted since the parties have agreed that curial law would be the Indian Arbitration Act, 1996.
xxx
124. In Shashoua, such an expression was understood as seat instead of venue, as the parties had agreed that the ICC Rules would apply to the arbitration proceedings. In Shashoua, the ratio in Naviera and Braes of Doune has been followed. In that case, the Court was concerned with the construction of the shareholders' agreement between the parties, which provided that "the venue of the arbitration shall be London, United Kingdom". It provided that the arbitration proceedings should be conducted in English in accordance with the ICC Rules and that the governing law of the shareholders' agreement itself would be the law of India. The claimants made an application to the High Court in New Delhi seeking interim measures of protection under Section 9 of the Indian Arbitration Act, 1996, prior to the institution of arbitration proceedings. Following the Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905
10 AC-45-2025 commencement of the arbitration, the defendant and the joint venture company raised a challenge to the jurisdiction of the Arbitral Tribunal, which the panel heard as a preliminary issue. The Tribunal rejected the jurisdictional objection.
xxx
131. Upon consideration of the entire matter, it was observed in Sulamérica that "In these circumstances it is clear to me that the law with which the agreement to arbitrate has its closest and most real connection is the law of the seat of arbitration, namely, the law of England". It was thereafter concluded by the High Court that the English law is the proper law of the agreement to arbitrate.
xxx
133. We also do not find any merit in the submission of Dr. Singhvi that the close and the most intimate connection test is wholly irrelevant in this case. It is true that the parties have specified all the three laws. But the Court in these proceedings is required to determine the seat of the arbitration, as the respondents have taken the plea that the term "venue" in the arbitration clause actually makes a reference to the "seat" of the arbitration."
52. This Court in its decision in BGS SGS SOMA JV v. NHPC LTD., (2020) 4 SCC 234 held that wherever in the arbitration agreement there is designation of a place of arbitration as 'venue' of the 'arbitral proceedings', then such place effectively is the 'seat' of arbitration. This is because, the expression 'arbitral proceedings' does not refer to individual hearings but rather the whole arbitration process including the making of the award. It further held that where the parties have anchored the arbitral proceedings to one fixed location or place, it would indicate that the parties intended such place to be the seat of arbitration. It held that where the place designated as venue in the arbitration agreement is coupled with there being no other significant contrary indicia that such place is merely a venue, then such place would be construed as the 'seat' of the arbitral proceedings. This Court also added that the international context where a supranational body of rules is to govern the arbitration in or in the national context the laws of a particular country then this would further be an indicia that the 'venue' designated in the arbitration agreement is really the seat of arbitration. The relevant observations read as under:--
"82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the "venue" of the arbitration proceedings, the expression "arbitration proceedings"
would make it clear that the "venue" is really the "seat" of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as "tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue", which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat" of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held" at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue" and not the "seat" of the arbitral proceedings, would then conclusively show that such a clause designates a "seat" of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated, would be the seat of the arbitral proceedings. In a Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 11 AC-45-2025 national context, this would be replaced by the Arbitration Act, 1996 as applying to the "stated venue", which then becomes the "seat" for the purposes of arbitration."
(Emphasis supplied)
53. Thus, this Court in BGS SGS SOMA (supra) laid down a three-condition test as to when 'venue' can be construed as 'seat' of arbitration. The conditions that are required to be fulfilled are as under:--
i. The arbitration agreement or clause in question should designate or mention only one place;
ii. Such place must have anchored the arbitral proceedings i.e., the arbitral proceedings must have been fixed to that place alone without any scope of change; iii. There must be no other significant contrary indicia to show that the place designated is merely the venue and not the seat.
Where the aforesaid conditions are fulfilled, then the place that has been designated as 'venue' can be construed as the 'seat' of arbitration. It is clarified that, while applying the aforesaid test, it must be borne in mind that where a supranational body of rules has been stipulated in an arbitration agreement or clause, such stipulation is not to be regarded as a contrary indicium, such stipulation does not mean that no seat has been designated rather such stipulation is a positive indicia that the place so designated is actually the 'seat'.
54. The aforesaid test was approvingly applied by this Court in Mankastu Impex Private Ltd. v. Airvisual Ltd. reported in (2020) 5 SCC 399 and it was held that where the reference to a place in the arbitration agreement is not simply as "venue" and rather a reference as place for final resolution by arbitration, such place shall be construed as the seat of arbitration. The relevant observations read as under:--
"20. It is well settled that "seat of arbitration" and "venue of arbitration" cannot be used interchangeably. It has also been established that mere expression "place of arbitration" cannot be the basis to determine the intention of the parties that they have intended that place as the "seat" of arbitration. The intention of the parties as to the "seat" should be determined from other clauses in the agreement and the conduct of the parties.
21. In the present case, the arbitration agreement entered into between the parties provides Hong Kong as the place of arbitration. The agreement between the parties choosing "Hong Kong" as the place of arbitration by itself will not lead to the conclusion that the parties have chosen Hong Kong as the seat of arbitration. The words, "the place of arbitration" shall be "Hong Kong", have to be read along with Clause 17.2. Clause 17.2 provides that "... any dispute, controversy, difference arising out of or relating to MoU shall be referred to and finally resolved by arbitration administered in Hong Kong....". On a plain reading of the arbitration agreement, it is clear that the reference to Hong Kong as "place of arbitration" is not a simple reference as the "venue" for the arbitral proceedings; but a reference to Hong Kong is for final resolution by arbitration administered in Hong Kong. The agreement between the parties that the dispute "shall be referred to and finally resolved by arbitration administered in Hong Kong" clearly suggests that the parties have agreed that the arbitration be seated at Hong Kong and that laws of Hong Kong shall govern the arbitration proceedings as well as have power of judicial review over the arbitration award.Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:25905 12 AC-45-2025
22. As pointed out earlier, Clause 17.2 of MoU stipulates that the dispute arising out of or relating to MoU including the existence, validity, interpretation, breach or termination thereof or any dispute arising out of or relating to it shall be referred to and finally resolved by the arbitration administered in Hong Kong. The words in Clause 17.2 that "arbitration administered in Hong Kong" is an indicia that the seat of arbitration is at Hong Kong. Once the parties have chosen "Hong Kong" as the place of arbitration to be administered in Hong Kong, the laws of Hong Kong would govern the arbitration. The Indian courts have no jurisdiction for appointment of the arbitrator."
71. From the above exposition of law, the following position of law emerges:--
(i) Part I of the Act, 1996 and the provisions thereunder only applies where the arbitration takes place in India i.e., where either (I) the seat of arbitration is in India OR (II) the law governing the arbitration agreement are the laws of India.
(ii) Arbitration agreements executed after 06.09.2012 where the seat of arbitration is outside India, Part I of the Act, 1996 and the provisions thereunder will not be applicable and would fall beyond the jurisdiction of Indian courts.
(iii) Even those arbitration agreements that have been executed prior to 06.09.2012 Part I of the Act, 1996 will not be applicable, if its application has been excluded by the parties in the arbitration agreement either explicitly by designating the seat of arbitration outside India or implicitly by choosing the law governing the agreement to be any other law other than Indian law.
(iv) The moment 'seat' is determined, it would be akin to an exclusive jurisdiction clause whereby only the jurisdictional courts of that seat alone will have the jurisdiction to regulate the arbitral proceedings. The notional doctrine of concurrent jurisdiction has been expressly rejected and overruled by this Court in its subsequent decisions.
(v) The 'Closest Connection Test' for determining the seat of arbitration by identifying the law with which the agreement to arbitrate has its closest and most real connection is no longer a viable criterion for determination of the seat or situs of arbitration in view of the Shashoua Principle. The seat of arbitration cannot be determined by formulaic and unpredictable application of choice of law rules based on abstract connecting factors to the underlying contract. Even if the law governing the contract has been expressly stipulated, it does not mean that the law governing the arbitration agreement and by extension the seat of arbitration will be the same as the lex contractus.
(vi) The more appropriate criterion for determining the seat of arbitration in view of the subsequent decisions of this Court is that where in an arbitration agreement there is an express designation of a place of arbitration anchoring the arbitral proceedings to such place, and there being no other significant contrary indicia to show otherwise, such place would be the 'seat' of arbitration even if it is designated in the nomenclature of 'venue' in the arbitration agreement.
(vii) Where the curial law of a particular place or supranational body of rules has been stipulated in an arbitration agreement or clause, such stipulation is a positive indicium that the place so designated is actually the 'seat', as more often than not the law governing the arbitration agreement and by extension the seat of the arbitration tends to coincide with the curial law.
(viii) Merely because the parties have stipulated a venue without any express choice of a seat, the courts cannot sideline the specific choices made by the parties in the arbitration agreement by imputing these stipulations as inadvertence at the behest of the parties as regards the seat of arbitration. Deference has to be shown to each and every choice and stipulations made by the parties, afterall the courts are only a Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 13 AC-45-2025 conduit or means to arbitration, and the sum and substance of the arbitration is derived from the choices of the parties and their intentions contained in the arbitration agreement. It is the duty of the court to give weight and due consideration to each choice made by the parties and to construe the arbitration agreement in a manner that aligns the most with such stipulations and intentions.
(ix) We do not for a moment say that, the Closest Connection Test has no application whatsoever, where there is no express or implied designation of a place of arbitration in the agreement either in the form of 'venue' or 'curial law', there the closest connection test may be more suitable for determining the seat of arbitration.
(x) Where two or more possible places that have been designated in the arbitration agreement either expressly or impliedly, equally appear to be the seat of arbitration, then in such cases the conflict may be resolved through recourse to the Doctrine of Forum Non Conveniens, and the seat be then determined based on which one of the possible places may be the most appropriate forum keeping in mind the nature of the agreement, the dispute at hand, the parties themselves and their intentions. The place most suited for the interests of all the parties and the ends of justice may be determined as the 'seat' of arbitration.
72. Thus, for all the foregoing reasons, we have reached the conclusion that the present petition under Section 11 of the Act, 1996 is not maintainable as neither the seat of arbitration is India nor is the arbitration agreement governed by laws of India. (emphasis added) 11 . It may be profitable to remembered at this stage the law as laid down by the Hon'ble Supreme Court in the case of Ramana Dayaram Shetty Vs. International Airport Authority of India reported in (1979)3 SCC489 to the effect that contractual terms must be given their due meaning and cannot be rendered redundant or superfluous. The Courts must ensure that the words used in the agreement, being part of a formal document, are accorded their full significance. In the present case, clause 16 provides for the jurisdiction of the court. If the contention of the counsel for the applicant is accepted then the seat of arbitration will have to be treated at Indore and if this is done then this will render sub-clause (a) of clause 16 as redundant as there will be nothing to agitate for at Haridwar.
12. Apart from above, in BGS (supra) case the Hon'ble Supreme Court laid down the circumstances under which 'venue' can be treated as 'seat', first the arbitration agreement should designate or mention only one place, second to Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 14 AC-45-2025 such place must have anchored the arbitral proceedings and there must be no other significant indicia to show that the place designated is merely the venue and not the seat. In the present case, two places have been mentioned, one is Haridwar and the other is Indore and by specifying in sub-clause (a) of clause 16 that the courts at Haridwar shall have exclusive jurisdiction significant contrary indicia has been provided against treating the venue of arbitration at Indore as also the seat of arbitration.
13. Similarly, in the case of Arif Azim (supra) not only that the ratio of BGS case was reiterated but it was further held that merely because the parties have stipulated a venue without any express choice of seat, the courts cannot sideline the specific choices made by the parties in the arbitration agreement. It was further held that deference has to be shown to each and every choice and stipulations made by the parties, it is the duty of the court to give weight and due consideration to each choice made by the parties and to construe the arbitration agreement in a manner that aligns the most with such stipulations and intentions. Keeping in mind this mandate of law, a perusal of the heading of clause 16 would show that it provides for Disputes, Arbitration and Court Jurisdiction. Significantly, in both sub-clauses i.e. (a) and (b) word 'dispute' has been used and in sub-clause (a) it has clearly been mentioned that 'all disputes subject to Court at Haridwar only", intention of the parties is clear by this, a clear choice of conferring jurisdiction to courts at Haridwar has been provided. This cannot be brushed away by a casual argument that courts at Haridwar are conferred jurisdiction for all disputes but not for arbitration. This will, as stated above, render sub-clause (a) as Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 15 AC-45-2025 redundant which certainly is not the intention of the parties.
14. It is thus clear that mere expression of venue of arbitration cannot be the basis to determine the intention of the parties that they have intended that place as the seat of arbitration. In the present case, the intention of the parties is clearly discernible. The disputes arbitration and Court jurisdiction clause in the present case is contained in Clause 16 of the agreement which clearly provides that all disputes subject to Court at Haridwar only. It is thus clear that exclusive jurisdiction has been conferred upon the Courts at Haridwar and clearly in case of disputes the parties have anchored the proceedings at Haridwar only and for arbitration a venue has been provided at Indore. It appears that keeping in view the fact that the registered office of the applicant is at Mumbai and registered office of the respondent is at Delhi, the venue for arbitration is determined at Indore but it would not mean that the parties intended to anchor the entire proceedings at Indore as the intention has clearly been demonstrated in sub Clause (a) of Clause 16 by conferring exclusive jurisdiction to Court at Haridwar only. It is not the case of the applicant that either its Office is situated at Indore or some part of the agreement was executed at Indore or even any work has to be performed at Indore. Indore is merely a venue for arbitration looking to the location of the contesting parties. However merely for determining Indore as venue for arbitration it cannot readily be accepted as the seal of arbitration. In view of the clear definition of Courts in Section 2(3) of the Arbitration and Conciliation Act, it is also not the case that in case of any dispute is tried in a suit then Court at Indore would have jurisdiction. Thus in any case the Courts Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM NEUTRAL CITATION NO. 2025:MPHC-IND:25905 16 AC-45-2025 at Indore are not having any jurisdiction in the present case.
15. In view of the above, the present application fails and is hereby dismissed. The parties are free to move competent Court having jurisdiction in the matter for appointment of arbitrator.
(PAVAN KUMAR DWIVEDI) JUDGE SS/-
Signature Not Verified Signed by: SHAILESH MAHADEV SUKHDEVE Signing time: 11/4/2025 2:32:39 PM