Supreme Court: holding arbitration hearings at a place does not make it the 'seat' of arbitration

Mahanadi Coalfields Ltd had a works contract with GSCO Infrastructure Pvt Ltd that contained no arbitration clause. After disputes arose, the Orissa High Court, in a writ petition, referred the matter to a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 without specifying any seat or venue; the arbitral proceedings were then conducted at Cuttack, where the High Court sits, apparently for the arbitrator's convenience. After an award was passed in GSCO's favour, Mahanadi Coalfields filed petitions under Section 34 of the Act to set the award aside before the District Judge, Sundargarh — the district where the underlying works were performed.

The High Court held these petitions were not maintainable, reasoning that Cuttack, where the hearings were held, was the 'seat' of arbitration, so only courts there had supervisory jurisdiction, and that the petitions were also time-barred. The Supreme Court (Sanjay Kumar and Sanjeev Sachdeva, JJ.) set this aside. It reiterated the distinction between 'seat' — which fixes the courts with supervisory jurisdiction — and 'venue', which is merely the physical location of hearings, relying on BALCO, Indus Mobile Distribution and BGS SGS Soma JV.

Since neither the parties nor the referral order had designated Cuttack as the seat, conducting hearings there did not confer jurisdiction on its courts. Absent an express seat, any court within the High Court's territorial jurisdiction competent to entertain a Section 34 petition — here, the District Judge, Sundargarh — could hear it. The petitions were restored.