ALLAHABAD HC EXPLAINED THE DIFFERENCE BETWEEN ARBITRATION VENUE AND SEAT

Recently, while hearing a writ petition, the Allahabad High Court explained the difference between “Seat” and “Venue” of Arbitration. 

A dispute arose between the petitioner and the respondent regarding the payments for an apartment. During the arbitration stage, the Petitioner claimed that as per the agreement, the arbitration would take place in “New Delhi”. Given the same, the High Court appointed a sole arbitrator with its seat in New Delhi.

After passing the award, the respondent filed an Arbitration Application under Section 34 of the Arbitration and Conciliation Act ("The Act") before the District Judge of Gautam Budh Nagar, UP, who issued a notice to the petitioner. 

The petitioner applied before the Commercial Court, questioning the validity of arbitration proceedings in Gautam Budh Nagar, UP u/s 34 of the Act. The same of dismissed and hence present petition in the High Court. 

The petitioner raised the question, of whether the above-mentioned Commercial Court had the jurisdiction to hear the case u/s 34 of the Act against the award passed by the sole arbitrator in New Delhi. 

The petitioner argued that the "Venue of Arbitration" has been chosen Delhi by both parties. Whereas, the arbitration clause does not specify the "Seat of Arbitration". Hence, in the absence of a Seat of Arbitration, the venue of arbitration will be the juridical seat of arbitration proceedings. Thus, District- Gautam Budh Nagar is not maintainable.

The Court held that “The term “seat” is important because it indicates the location of the arbitration. Venue and Seat are often confused with each other. It is important to note that the Venue is more of a location chosen as a suitable location by the parties to carry out arbitration proceedings, and therefore, should not be confused with “seat.”