The Andhra Pradesh High Court has held that mere mention of a place where arbitral proceedings are to be conducted does not, by itself, confer the status of juridical seat upon that location or vest exclusive territorial jurisdiction in its courts.

The Court observed that arbitration clauses must be read conjointly with jurisdiction clauses to ascertain the true intention of the parties, and where the agreement contains a contrary indicia excluding jurisdiction of courts at the arbitral venue, such venue cannot be elevated to the status of the juridical seat conferring territorial jurisdiction under the Arbitration and Conciliation Act, 1996.

A Division Bench comprising Justice Ravi Nath Tilhari and Justice Balaji Medamalli accordingly, held that the Commercial Court at Visakhapatnam possessed territorial jurisdiction to entertain proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 and not Hyderabad. It observed, “…Mere mentioning of a place of arbitration would not amount to fixing of the seat of arbitration, thereby conferring jurisdiction upon the courts of that place and Clauses 57 and 58 of the DAGPA must be conjointly read to arrive and draw the intention of the parties to the agreement while entering into such an agreement. Thus, the intention is very clear that the arbitration proceedings will be taken place at Hyderabad where the same has to be treated as a place/venue of arbitration and the same cannot be equated or elevated to the status of seat of arbitration”.

Advocate D S Sivadarshan appeared for the appellant and Advocate Devalampalli Purushotham Reddy appeared for the respondent.

In the matter, a Development Agreement-cum-General Power of Attorney (DAGPA) was the subject matter of the dispute, wherein Clause 57 of the agreement provided that arbitration proceedings “shall be held in Hyderabad only”, while Clause 58 stipulated that only civil courts in East Godavari District would have jurisdiction “to the exclusion of all other courts”.

The Commercial Court at Visakhapatnam dismissed an application under Section 9 of the Act on the ground that Hyderabad constituted the juridical seat of arbitration.

Challenging the order, the appellant argued that Clause 58 constituted a clear “contra indicia” preventing Hyderabad from being elevated from a mere venue to the juridical seat. Reliance was placed upon decisions including BGS SGS Soma JV v. NHPC Ltd., Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited, Brahmani River Pellets Limited v. Kamachi Industries Limited, and various High Court rulings interpreting conflicting venue and jurisdiction clauses.

The respondent, however, contended that Clause 57 operated independently of Clause 58 and that once Hyderabad was designated as the place where arbitration proceedings “shall be held”, it necessarily became the juridical seat conferring exclusive supervisory jurisdiction upon courts at Hyderabad.

After examining the rival submissions and precedents, the Court held that the arbitration clause could not be interpreted in isolation. The Bench observed that Clause 58 expressly excluded jurisdiction of all courts except those at East Godavari District, and therefore constituted a strong contra indicia against treating Hyderabad as the seat of arbitration.

The Bench further held that Clause 57 merely contemplated Hyderabad as the place where arbitral proceedings would be conducted for convenience of parties, whereas Clause 58 governed jurisdictional allocation. Consequently, Hyderabad could only be regarded as the venue or place of arbitration and not the juridical seat.

“In fact, it was the intention of the parties that all the clauses in the agreement are to be read in conjoint and cannot be in isolation. Clause 57 would only provide for arbitration and Clause 58 provide for jurisdiction of courts. Therefore, Clauses 57 and 58 have to be read together and they are dependent clauses and Clause 58 covers the proceedings under Clause 57 also which would mean to include the arbitration proceedings also. That apart, clause 57 speaks that the proceedings of arbitration shall be held at Hyderabad only would mean and intend that the said proceedings shall take place at Hyderabad for the convenience of the parties…Therefore, Hyderabad can be treated as place of arbitration only. The same cannot be treated as seat of arbitration. Thus, it can be safely held that the jurisdiction of all the civil courts other than the Courts at East Godavari District are excluded and as such the proceedings under Section 9 of the Arbitration and Conciliation Act are to be invoked or instituted in terms of Clause 57 read with Clause 58 of the agreement…”.

“…As the subject territory of East Godavari District has been attached to the jurisdiction of the Special Judge For Trial and Disposal of Commercial Disputes Act, Visakhapatnam, the Special Court at Visakhapatnam is vested with the territorial jurisdiction over the subject proceedings”, the Bench further observed.

Holding that the Commercial Court had erred in declining jurisdiction, the High Court set aside the order dated December 01, 2025 and allowed the appeal.

Cause Title: Carloyn Joyce Tadamala v. Royal City Developer Private Limited Comca.No.27 of 2025

Appearances:

Appellant: D S Sivadarshan, Advocate.

Respondent: Devalampalli Purushotham Reddy, Advocate.

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