The Delhi High Court, in ๐ญ๐๐๐๐ ๐ช๐๐๐๐๐๐๐๐๐๐๐๐ ๐๐. ๐ต.๐พ.๐ฎ.๐ฌ.๐ณ ๐ช๐๐๐๐๐ (๐จ๐น๐ฉ.๐ท. 1318/2024), ruled that when an arbitration agreement does not specify a seat or venue, the court's jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996, must be determined based on Sections 16 to 20 of the Civil Procedure Code, 1908. The ruling, delivered by Justice Manoj Kumar Ohri on March 20, 2025, emphasized that ๐ท๐๐ฟ๐ถ๐๐ฑ๐ถ๐ฐ๐๐ถ๐ผ๐ป ๐ฑ๐ฒ๐ฝ๐ฒ๐ป๐ฑ๐ ๐ผ๐ป ๐๐ต๐ฒ๐ฟ๐ฒ ๐๐ต๐ฒ ๐ฟ๐ฒ๐๐ฝ๐ผ๐ป๐ฑ๐ฒ๐ป๐ ๐ฟ๐ฒ๐๐ถ๐ฑ๐ฒ๐ ๐ผ๐ฟ ๐ฐ๐ผ๐ป๐ฑ๐๐ฐ๐๐ ๐ฏ๐๐๐ถ๐ป๐ฒ๐๐ ๐ฎ๐ป๐ฑ ๐๐ต๐ฒ๐ฟ๐ฒ ๐๐ต๐ฒ ๐ฐ๐ฎ๐๐๐ฒ ๐ผ๐ณ ๐ฎ๐ฐ๐๐ถ๐ผ๐ป ๐ฎ๐ฟ๐ถ๐๐ฒ๐.
The dispute arose from an agreement dated July 6, 2022, for construction work in Odisha. The petitioner alleged a breach of contract by the respondent and invoked arbitration. The respondent contended that since the agreement did not specify the arbitration seat or venue, the jurisdiction should be in Rajgangpur, Odisha, where the project was executed. The petitioner argued that part of the cause of action arose in Delhi, as payments were received in a Delhi-based bank account and invoices were raised from Delhi.
The court reaffirmed that i๐ป๐๐ถ๐ด๐ป๐ถ๐ณ๐ถ๐ฐ๐ฎ๐ป๐ ๐ณ๐ฎ๐ฐ๐๐ผ๐ฟ๐, ๐๐๐ฐ๐ต ๐ฎ๐ ๐บ๐ฎ๐ถ๐ป๐๐ฎ๐ถ๐ป๐ถ๐ป๐ด ๐ฎ ๐ฏ๐ฎ๐ป๐ธ ๐ฎ๐ฐ๐ฐ๐ผ๐๐ป๐ ๐ถ๐ป ๐ฎ ๐ฑ๐ถ๐ณ๐ณ๐ฒ๐ฟ๐ฒ๐ป๐ ๐น๐ผ๐ฐ๐ฎ๐๐ถ๐ผ๐ป, ๐ฑ๐ผ ๐ป๐ผ๐ ๐ฐ๐ผ๐ป๐๐ฟ๐ถ๐ฏ๐๐๐ฒ ๐๐ผ ๐๐ต๐ฒ ๐ฎ๐ฐ๐ฐ๐ฟ๐๐ฎ๐น ๐ผ๐ณ ๐ฎ ๐ฐ๐ฎ๐๐๐ฒ ๐ผ๐ณ ๐ฎ๐ฐ๐๐ถ๐ผ๐ป. It held that the agreement was executed in Odisha, the construction work was carried out there, and the respondent’s principal place of business was in Odisha. Given these considerations, the court ruled that the material cause of action arose outside Delhi's territorial jurisdiction and dismissed the petition. This decision reinforces the principle that arbitration jurisdiction must be based on substantial and integral facts rather than incidental connections.
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