The Supreme Court has held that the venue for arbitral proceedings would not automatically be the seat of arbitration and the juridical seat would have to be ascertained by reading the Agreement in its entirety to decipher the true intention of the parties.

The Apex Court was considering an appeal challenging the judgment of the Delhi High Court whereby, in exercise of its jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, the High Court appointed an arbitrator to resolve the disputes between the parties arising out of a “Franchise Agreement”.

The Division Bench of Justice Manoj Misra and Justice Vijay Bishnoi held, “In the present case, a plain reading of the arbitration clause would indicate that Delhi is not the only place specified for arbitration. Both Delhi and Goa are mentioned as places for holding arbitration. Thus, when we apply the tests laid down in BGS SGS SOMA (supra), which have been affirmed in Arif Azim (supra), the place specified i.e. venue for arbitral proceeding would not automatically be the seat of arbitration.”

“In the present case, there is no issue about the existence of an arbitration agreement and, further, there is no dispute that the arbitration agreement itself specifies two places, namely, Delhi and Goa; in such circumstances, in our view, the juridical seat would have to be ascertained by reading the Agreement in its entirety so as to decipher the true intention of the parties”, it added.

AOR Salvador Santosh Rebello represented the Appellant while AOR Mudit Gupta represented the Respondent.

Factual Background

The Agreement had a clause on Arbitration and Dispute Resolution which said that any dispute or difference between the Parties arising out of or in connection with the Agreement, either during the term of the Agreement or at any time thereafter, would be settled between the parties through friendly consultations and negotiations. Invoking this clause, the respondent proposed the name of a sole arbitrator. The said proposal was rejected by the appellant. Consequently, the respondent applied to the High Court for appointing an arbitrator under Section 11(6). By the impugned order, the High Court appointed the arbitrator and left it open for him to select the venue for the hearings in consultation with the parties.

Reasoning

On a perusal of the facts of the case, the Bench noted that both Delhi and Goa were mentioned as places for holding arbitration. Thus, referring to the judgments in BGS SGS SOMA JV v. NHPC LIMITED (2020) as well as Arif Azim Company Limited v. Micromax Informatics FZE (2025), the Bench held that the place specified, i.e., the venue for arbitral proceedings, would not automatically be the seat of arbitration

“Since Clause 38 of the Agreement confers exclusive jurisdiction to the courts at Goa and Clause 32.5 provides that arbitration proceedings will be held in Goa, it is clear that the parties have agreed that Goa shall be the juridical seat, Delhi is just a venue”, it added.

According to Clause 32.4, the location of the arbitration was to be within Delhi; whereas Clause 32.5 stated that the arbitration proceedings would be held in Goa. Construing these harmoniously, to ensure that neither became redundant, and reading them in conjunction with Clause 38 of the Agreement vesting exclusive jurisdiction in the courts at Goa, the Bench held that the juridical seat was at Goa and Delhi was just a venue

“Upon reading the Agreement in its entirety, we find that the juridical seat of arbitration was at Goa, therefore, we are of the view that the Delhi High Court lacked jurisdiction to entertain the application under sub-section (6) of Section 11 of the 1996 Act”, it held.

Thus, allowing the appeal, the Bench ordered, “Consequently, the appeal is allowed. The order passed by the High Court is set aside. The parties would be at liberty to take recourse to appropriate proceedings before the jurisdictional High Court.”

Cause Title: ARCIS Clean Energy Pvt. Ltd. v. Parshva Innovation (Neutral Citation: 2026 INSC 1109)

Appearance

Appellant: AOR Salvador Santosh Rebello, Advocates Raghav Sharma, Sneha Bhargava, Ankit Rana, Devesh Khandelwal

Respondent: AOR Mudit Gupta, Advocates Varun Singh, Alankriti, Somesa Gupta, Kajal Gupta, Arun Sidhant, Deepeika Kalia, Sudeep Chandra

Click here to read/download Judgment




Justice Manoj MisraJustice Vijay Bishnoi

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.