Supreme Court explains distinction between seat and venue of arbitration

Seat of arbitration is governed by the agreement of the parties and not by the place of hearing or the place where the award is signed – Supreme Court

In a recent judgment, Hon’ble Supreme Court has explained the distinction between the seat and venue of the arbitration observing that the seat of arbitration is governed by the agreement of the parties and not by the place of hearing or the place where the award is signed.

ABCAUS Case Law Citation:
5106 (2026) (04) abacus.in SC

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The appellant was a registered society functioning as a special purpose vehicle (SPV) for execution of externally aided infrastructure projects. The respondent was a contractor engaged by the appellant for execution of four infrastructure road projects in the State of Jammu & Kashmir.

As the disputes arose between the parties regarding the contractual claims, the respondent invoked the arbitration in terms of Arbitration clause contained in the agreements.

On respondent’s application(s), the High Court of Jammu & Kashmir and Ladakh, appointed a retired District and Sessions Judge a sole arbitrator. The Hon’ble Supreme Court in view of the civil appeal filed by the appellants, modified the High Court order and appointed a former Supreme Court Judge as the sole arbitrator in substitution of the previously appointed arbitrator.

The Arbitral Tribunal, with the consent of the parties fixed Srinagar as seat of arbitration and New Delhi as the venue. Upon the demise of sole arbitrator, the High Court in exercise of powers under the State Arbitration and Conciliation Act appointed another former Judge of Apex Court, as the sole arbitrator to continue proceedings from the stage left by the previous arbitrator.

Later, the arbitral award was delivered at New Delhi. The applications under Section 33 of the Act filed by the appellant, were subsequently decided by an order. However, the appellant approached Hon’ble High Court raising a preliminary objection regarding the territorial jurisdiction. However, the Hon’ble High Court returned the petition, holding that since the arbitration proceedings were conducted and the award was rendered at New Delhi, the courts at New Delhi alone had jurisdiction.

Aggrieved, the appellant approached Hon’ble Supreme Court contending that when by an order with the consent of the parties, the arbitrator had fixed the seat of arbitration at Srinagar and the same could be altered only by mutual agreement.

It was submitted that where the seat and venue differ, the seat determines the supervisory jurisdiction, hence the courts at Srinagar alone possessed jurisdiction under Section 34 of the Act.

Thus, the core issue before the Hon’ble Supreme Court was whether, despite an express designation of Srinagar as seat of arbitration, the conduct of proceedings and rendering of the award at New Delhi would confer jurisdiction upon courts at New Delhi?

The Hon’ble Supreme Court observed its several judgments and summarised principles governing the distinction between the seat and venue of the arbitration, and the jurisdictional consequences as under:

(i) The seat of arbitration constitutes the juridical home or legal place of arbitration. It determines the curial law governing the arbitral process and identifies the Court having supervisory control over the arbitration.

(ii) Once the seat is designated by agreement of the parties, the courts of that place alone have exclusive jurisdiction to entertain all proceedings arising out of the arbitration, including challenges to the award. The designation of the seat operates akin to an exclusive jurisdiction clause, excluding all other courts – even those where the cause of action may have arisen.

(iii) The venue is merely a geographical location chosen for convenience for holding hearings, examination of witnesses, or meetings of the arbitral tribunal. It does not confer jurisdiction and does not, by itself, alter or determine the seat. The arbitral tribunal is free to conduct proceedings at locations different from the seat without affecting the juridical seat.

(iv) The mere fact that arbitral proceedings are conducted or the award is rendered at a particular place does not confer jurisdiction on courts of that place if it is different from the designated seat. The seat remains fixed unless expressly altered by agreement of the parties.

(v) Where the seat is not expressly designated, courts determine it by applying:

(a) the closest and most intimate connection test, identifying the place most closely connected with the arbitration (based on the Naviera Amazonica principle); and

(b) in appropriate cases, construing the venue as the seat where the agreement and surrounding circumstances indicate such intention (as reflected in the Shashoua principle).

(vi) The intention of the parties, as discerned from the arbitration agreement and surrounding circumstances, is the paramount factor in determining the seat. Once such intention is expressed-either expressly or by necessary implication-it must be given full effect by Courts.

The Hon’ble Supreme Court observed that in the present case, not only have the parties expressly agreed upon Srinagar as seat of arbitration, but even the surrounding circumstances reinforced this conclusion. The contracts were executed in the State of Jammu & Kashmir and the works were to be carried out within the said State. The arbitration proceedings were initiated in the State of Jammu and Kashmir and the High Court had appointed the arbitrator. These factors as well as the ‘closest and most intimate connection test’ unmistakably anchors the arbitration at Srinagar.

The Hon’ble Supreme Court held that the seat of arbitration is governed by the agreement of the parties and not by any stray recital in the award. Once the seat of arbitration is fixed, it remains immutable unless altered by an express agreement. In the absence of any agreement, the designation of Srinagar as seat of the arbitration continued to hold the field.

The Hon’ble Supreme Court opined that the High Court ought to have appreciated that Srinagar was consciously designated as the seat of arbitration. Once such a designation was made, the legal consequence that inexorably follows is that courts at Srinagar alone would have supervisory jurisdiction over the arbitral proceeding. The mere fact that arbitral tribunal for reasons of convenience, conducted proceeding at New Delhi or rendered the award at that place does not and cannot, alter the juridical seat of arbitration.

The Hon’ble Supreme Court further held that if the approach adopted by the High Court, upheld, it would have the effect of rendering the concept of juridical seat otiose, and would introduce uncertainty in arbitration proceeding by allowing the place of hearing or the place where the award is signed to determine the jurisdiction. Such a consequence would be contrary to principles of party autonomy and legal certainty that underly the Arbitration and Conciliation Act, 1996.

Accordingly, it was held that the court at Srinagar being the court of seat of arbitration, alone possessed the jurisdiction to entertain and decide the challenge to the arbitral award.

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