Venue of Arbitration would be Deemed to be its Seat if not Expressly Designated

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Dec 30, 2019

Venue of Arbitration would be Deemed to be its Seat if not Expressly Designated

A three-judge bench of the SC in BGS SGS SOMA JV. v. NHPC Ltd.[1] held that the selection of a seat for an arbitration proceeding is tantamount to conferring exclusive jurisdiction to the courts of the place at which such seat is located.

SC overruled the judgment passed by its three-judge-bench in Union of India v. Hardy Exploration and Production (India) Inc.[2] to the extent that it failed to apply the tests for determination of the seat of arbitration, which had been upheld by its five-judge-bench in Bharat Aluminium Co. (BALCO) v. Kaiser Aluminium Technical Service, Inc.[3]. The test provides that in the absence of an express provision for an alternative place as the seat of arbitration proceedings and a supranational body of rules governing the arbitration, the stated venue of the arbitration would be the juridical seat of the arbitration proceeding. The SC elaborated that this intent can also be additionally inferred from the language of the arbitration agreement.

[1] Civil Appeal No. 9307 of 2019 arising out of SLP (Civil) No. 25618 of 2018 [2] (2018) 7 SCC 374. [3] (2012) 9 SCC 552

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