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BBR (India) Pvt. Ltd. vs. S.P. Singla Constructions Private Ltd.

Civil Appeal · 2022 INSC 591Decided 18 May 2022
Civil Appeal Nos. 4130-4131 of 2022

Background

BBR (India) and S.P. Singla Constructions were in a contract dispute over a cable-stay bridge project, resolved through arbitration. The first arbitrator fixed the arbitration venue as Panchkula, Haryana, but after he recused himself, the second arbitrator held the remaining proceedings and pronounced the award in Delhi. When the award went against BBR (India), the company challenged it before the Delhi High Court, while S.P. Singla separately sought interim relief before a Panchkula court, creating a dispute over which city's courts actually had jurisdiction to supervise the arbitration.

Decision Breakdown

The Supreme Court held that once an arbitral tribunal fixes the "seat" of arbitration under Section 20(2) of the Arbitration Act (as the first arbitrator did here, fixing it at Panchkula), that seat becomes fixed and exclusive: later proceedings held at a different city (Delhi, in this case, due to a change of arbitrator) only shift the "venue," not the legal "seat," unless both parties expressly agree to relocate it. Since the seat remained Panchkula, only courts there had jurisdiction to entertain challenges to the award, and the Delhi High Court had no jurisdiction. The appeals challenging the Punjab and Haryana High Court's ruling (which had reached the same conclusion) were accordingly dismissed.

Lesson Learnt

In arbitration agreements, parties should clearly specify the "seat" of arbitration upfront, since once a seat is fixed by the tribunal, merely holding later hearings elsewhere does not shift which courts have the power to hear challenges to the award: this determines where you must go to court if something goes wrong.

Official source (sci.gov.in)View Judgment (PDF)

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