Clarifying the distinction between ‘venue’ and ‘seat’ during arbitration proceedings, the Supreme Court of India reiterated that courts in India have jurisdiction over arbitration proceedings when the arbitration ‘seat’ has not agreed between the parties.
Reviewing a plethora of case, a Large Bench of the Supreme Court said that, in the instant case, the sittings by arbitral tribunal at various places are relatable to venue and can’t be equated with the seat of arbitration or place of arbitration which has a different connotation.
“When a ‘place’ is agreed upon, it gets the status of seat which means the juridical seat. We have already noted that the terms ‘place’ and ‘seat’ are used interchangeably. When only the term ‘place’ is stated or mentioned and no other condition is postulated, it is equivalent to ‘seat’ and that finalizes the facet of jurisdiction. But if a condition precedent is attached to the term ‘place’, the said condition has to be satisfied so that the place can become equivalent to seat”, the Court said.
“To elaborate, a venue can become a seat if something else is added to it as a concomitant. But a place unlike seat, at least as is seen in the contract, can become a seat if one of the conditions precedent is satisfied. It does not ipso facto assume the status of seat. Thus understood, Kuala Lumpur is not the seat or place of arbitration and the interchangeable use will not apply in stricto sensu.