Sp Singla Constructions v State of Jharkhand - Arbitral Extension

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Sp Singla Constructions Pvt Ltd vs State Of Jharkhand & Anr on 1 April, 2026

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 12.03.2026
Judgment pronounced on: 01.04.2026

              +        O.M.P.(MISC.)(COMM.) 384/2024, I.A. 10888/2024 (Ex.) &
                       I.A. 38745/2024 (Stay)

                       SP SINGLA CONSTRUCTIONS PVT LTD                      .....Petitioner
                                                Through:   Mr. Anirudh Wadhwa, Mr.
                                                           Kartik Gupta and Mr. Vibhu
                                                           Pahuja, Advocates.
                                                versus

                       STATE OF JHARKHAND & ANR.                         .....Respondents
                                                Through:   Mr. Sachin Kumar, Additional
                                                           Advocate General, Mr. Kumar
                                                           Anurag Singh and Mr. Zain A.
                                                           Khan,     Advocates,      for
                                                           Respondent No. 1.
                                                           Ms. Astha Sharma and Mr.
                                                           Nikhil Anand, Advocates, for
                                                           Respondent No. 2.

                       CORAM:
                       HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
                       SHANKAR
                                                JUDGMENT HARISH VAIDYANATHAN SHANKAR, J.

1.   The present Petition has been instituted under Sub-sections (4)
             and (5) of Section 29A of the Arbitration and Conciliation Act,
             19961, inter alia, seeking the regularisation of the period commencing
             from 03.12.2023 and the grant of a further extension of twelve
   
                 A&C Act
   
              months, or such period as this Court may deem fit and appropriate, for
             the continuation of the mandate of the learned Arbitral Tribunal.
   

2.    At the outset, it is noted that Respondent No. 1 has raised a
             preliminary objection with respect to the jurisdiction of this Court,
             which has been duly contested by the Petitioner. It is evident that,
             should the objection as to jurisdiction be sustained in the present
             adjudication, the Petition itself would not survive for consideration,
             and consequently, the reliefs sought by the Petitioner herein would not
             be liable to be granted.
   

BRIEF FACTS:

1. Shorn of unnecessary details, the material facts germane to the institution of the present Petition are set out hereunder:

(a). The parties entered into an Agreement dated 25.05.20192 for
the „Construction of a 4-Lane Elevated Corridor with Cable-
Stayed Bridge and Approach Road for Anna Chowk-Gobindpur
Bypass Road at Jamshedpur, having a total length of 1540
metres, on EPC mode‟.

(b). Alleging certain breaches on the part of the counterparty, the
Agreement came to be terminated vide Termination Notice
dated 22.10.2020. Consequently, the Petitioner issued a Notice
dated 14.01.2021 under Section 21 of the A&C Act, invoking
arbitration and seeking reference of the disputes to an Arbitral
Tribunal.

(c). In the interregnum, it is the Petitioner‟s case that Respondent
No. 1 failed to release the performance security furnished under
the Agreement. The Petitioner was, therefore, constrained to

                  Agreement

                        seek interim protection by filing a Petition under Section 9 of
                       the A&C Act. Vide Order dated 27.01.2021, this Court issued
                       notice in the said Petition and directed maintenance of status
                       quo, till the next date of hearing, i.e., 04.03.2021, in respect of
                       the Performance Bank Guarantee furnished by the Petitioner for
                       an amount of Rs. 6,93,85,000/-.

(d). On the next date of hearing, i.e., 04.03.2021, the said Section 9
Petition came to be withdrawn by the Petitioner on instructions.

(e). Thereafter, vide letter dated 03.06.2022, the Society for
Affordable Redressal of Disputes3 constituted the learned
Arbitral Tribunal and appointed Mr. Justice Vidya Bhushan
Gupta (Retd.) as the learned Sole Arbitrator to adjudicate the
disputes between the parties.

(f). Pursuant thereto, the Petitioner filed its Statement of Claim
before the learned Arbitrator on 30.09.2022.

(g). In the meantime, Respondent No. 1 instituted Writ Petition No.
3609/2022 before the Jharkhand High Court, challenging the
constitution of the learned Arbitral Tribunal. The said writ
petition came to be dismissed as not maintainable vide Order
dated 03.01.2023. The Jharkhand High Court, however,
observed that such a challenge could appropriately be raised
before the learned Arbitral Tribunal by way of an application
under Section 16 of the A&C Act.

(h). In light of the aforesaid, Respondent No. 1 filed an application
under Section 16 of the A&C Act on 05.01.2023, which came to
be dismissed by the learned Arbitral Tribunal vide Order dated
08.08.2023.

SAROD

(i). Thereafter, Respondent No. 1 filed its Statement of Defence and
also preferred counterclaims. The said counterclaims were,
however, dismissed by the learned Arbitrator vide Order dated
05.10.2023 on account of non-payment of fee.

(j). The Petitioner thereafter filed its Rejoinder along with the
Affidavit of Admission and Denial, which were taken on record
on 30.11.2023.

(k). Respondent No. 1, in turn, filed its Affidavit of Admission and
Denial on 07.02.2024.

(l). On the same date, i.e., 07.02.2024, the learned Arbitral Tribunal
sought the consent of the parties for extension of its mandate by
a further period of six months with effect from 03.12.2023.
However, the learned counsel for Respondent No. 1 submitted
that he would need to seek instructions in this regard.

(m). On the subsequent date of hearing, i.e., 05.03.2024, the learned
Arbitral Tribunal directed the Petitioner to file an appropriate
application seeking extension of the Tribunal‟s mandate, in
view of Respondent No. 1‟s continued stand of requiring
instructions.

(n). Upon such application being filed, Respondent No. 1 declined
to accord its consent for extension of the mandate of the learned
Arbitral Tribunal, inter alia, on the ground that once the
mandate had lapsed, the same could not be extended by mutual
consent of the parties.

1. In these circumstances, the Petitioner has preferred this Petition under Section 29A of the A&C Act seeking appropriate orders from this Court.

SUBMISSIONS BY THE PARTIES:

1.    Learned      Additional   Advocate General4     appearing      for
             Respondent No. 1-State would raise a preliminary objection as to the
             maintainability of the present Petition, contending that the same is not
             maintainable before this Court for want of jurisdiction. In support of
             this contention, reliance would be placed upon Article/Clause 27 of
             the Agreement, being the jurisdiction clause, which unequivocally
             stipulates that the courts at Ranchi shall have exclusive jurisdiction in
             respect of all matters arising out of or relating to the Agreement.
   

2.    It would be further submitted that Clause 26 of the Agreement,
             which governs dispute resolution, and in particular Clause 26.3(ii)(d)
             thereof, provides that the venue of arbitration shall be at Ranchi.
             According to the learned AAG, a conjoint reading of the aforesaid
             clauses clearly establishes that the courts at Ranchi alone would have
             territorial jurisdiction to entertain disputes arising between the parties,
             thereby excluding the jurisdiction of the courts at Delhi.
   

3. In order to buttress the aforesaid submissions, learned counsel
   for Respondent No. 1 would place reliance upon the judgment of the
   Hon‟ble Supreme Court in BGS SGS SOMA JV v. NHPC5.

4.    Per Contra, learned counsel appearing for the Petitioner would
             submit that the present Petition is maintainable before this Court and
             that this Court possesses the requisite territorial jurisdiction to
             entertain the same.
   

5.    It would be contended that this Court had, on an earlier
             occasion, entertained and adjudicated upon a Petition filed by the
             Petitioner under Section 9 of the A&C Act, and in view thereof, it
   
                 AAG
   
                 (2020) 4 SCC 234
   
              would be urged that the objection raised by Respondent No. 1 is
             barred by virtue of Section 42 of the A&C Act, which mandates that
             once a Court has been approached in relation to an arbitration
             agreement, all subsequent applications arising out of the same
             agreement must be made before that very Court.
   

6. It would be further submitted that the reliance placed by the
   learned AAG on the exclusive jurisdiction clause, i.e., Clause 27 of
   the Agreement, is misplaced. Attention would be drawn by Petitioner
   to the Dispute Resolution Clause, particularly Clause 26.3(i), which
   provides that disputes not resolved amicably through conciliation shall
   be referred to arbitration „in accordance with the Rules of the Society
   for Affordable Redressal of Disputes (SAROD)‟.

7. Learned counsel for the Petitioner would then place reliance
   upon Rule 23.1 of the SAROD Rules to contend that the seat of
   arbitration is designated as New Delhi. It would thus be argued that,
   since the parties have expressly agreed to be governed by the SAROD
   Rules, the seat of arbitration as stipulated therein would prevail,
   thereby conferring jurisdiction upon the courts at New Delhi.

8. Learned counsel for the Petitioner would further submit that it
   is a well-settled principle of law that, in the event of a conflict
   between a broad or general exclusive jurisdiction clause and a clause
   designating the seat of arbitration, primacy must be accorded to the
   latter, and this is for the reason that the designation of the seat of
   arbitration carries with it the legal consequence of conferring
   exclusive supervisory jurisdiction upon the courts of the seat.

9. In support of this proposition, reliance, by the learned counsel
   for the Petitioner, would be placed upon the judgment of the Madras
   High Court in [Balapreetham Guest House (P) Ltd. v. Mypreferred

              Transformation and Hospitality (P) Ltd.6](https://indiankanoon.org/doc/130247731/), as well as the decisions of
             the Coordinate Benches of this Court [Manmohan Kapani v. Kapani
             Resorts (P) Ltd.7](https://indiankanoon.org/doc/32721358/) and [Devyani International Ltd. v. Siddhivinayak
             Builders and Developers8](https://indiankanoon.org/doc/37612546/).
   

10. Learned counsel for the Petitioner, in conclusion, would submit
    that in light of the material placed on record, this Court is duly vested
    with the jurisdiction to entertain the present Petition, and, therefore,
    would pray that the present Petition be allowed and the mandate of the
    learned Arbitral Tribunal be extended in terms of the reliefs sought
    herein.

11. In rebuttal, learned AAG for Respondent No. 1 would submit,
    on the aspect of the earlier Section 9 Petition relied upon by the
    Petitioner, that no adjudication on merits was ever undertaken by this
    Court in the said proceedings. It would be contended that the order
    passed on the first date of hearing was purely ex parte, rendered in the
    absence of and without participation by Respondent No. 1, and
    furthermore, the said Petition itself came to be withdrawn on the very
    next date of hearing by the Petitioner.

12. In such circumstances, it would be urged by the learned AAG
    that there was no adjudication on merits under Section 9 of the A&C
    Act. It would further be submitted that a petition which is withdrawn
    without adjudication, particularly in the context of arbitration
    proceedings, ceases to exist in the eyes of the law and, therefore,
    cannot be relied upon to anchor jurisdiction before this Court under
    Section 42 of the A&C Act.

(2021) 1 HCC (Mad) 515

                2023 SCC OnLine Del 1618

                2017 SCC OnLine Del 11156

1. Learned AAG would further submit that the Agreement
   executed between the parties does not expressly designate any "seat"
   of arbitration. According to him, the Agreement merely stipulates that
   disputes, once referred to arbitration, shall be governed by the Rules
   of the SAROD, which, in itself, does not ipso facto imply that the seat
   indicated in the SAROD Arbitration Rules would automatically
   become the juridical seat of arbitration.

2. It would further be contended that there exists a catena of
   judicial precedents to the effect that, in the absence of an express
   designation of the "seat" in the agreement, the "venue" of arbitration
   may, depending on the facts and intention of the parties, be construed
   as the seat.

3. Expanding upon the aforesaid submissions, learned AAG would
   argue that the Agreement, as consciously executed between the
   parties, makes a dual reference to "Ranchi", first, as the venue of
   arbitration, and second, as the place whose courts shall have exclusive
   jurisdiction. It would thus be contended that the intention of the
   parties is manifest and unequivocal, namely, to vest exclusive
   jurisdiction in the courts at Ranchi.

ANALYSIS:

1. This Court has heard learned counsel for the parties at
   considerable length. With the able assistance rendered by them, the
   Court has also carefully perused the material placed on record,
   including the pleadings, documents, and the judicial precedents relied
   upon during the course of arguments.

2. Upon hearing learned counsel for the parties on the preliminary
   issue of jurisdiction, which arises at the very outset for consideration,

              this Court is of the view that the following broad questions fall for
             determination:
   

I. Whether the Petition under Section 9 of the A&C Act, filed by
the Petitioner before this Court in January 2021, prior to the
constitution of the learned Arbitral Tribunal, in the facts and
circumstances of the present case, would operate so as to vest or
seize jurisdiction in the courts at New Delhi in terms of Section
42 of the A&C Act; and
II. If the aforesaid question is answered in the negative, whether
the juridical seat of arbitration, as contemplated under the
SAROD Arbitration Rules, would prevail over the other clauses
in the Agreement designating the "venue" of arbitration and
conferring "exclusive jurisdiction", for the purpose of
determining the court vested with supervisory jurisdiction over
the arbitral proceedings.
22. Turning first to the submission regarding the filing of the
petition under Section 9 before this Court, it is apposite, for the sake
of clarity and convenience, to extract Section 42 of the A&C Act,
which reads as follows:

"42. Jurisdiction.- Notwithstanding anything contained elsewhere
in this Part or in any other law for the time being in force, where
with respect to an arbitration agreement any application under this
Part has been made in a Court, that Court alone shall have
jurisdiction over the arbitral proceedings and all subsequent
applications arising out of that agreement and the arbitral
proceedings shall be made in that Court and in no other Court."
23. Section 42 of the A&C Act essentially stipulates that once an
application concerning an arbitration agreement is made before a
"Court" of competent jurisdiction, that Court alone shall exercise
jurisdiction over the arbitral proceedings and all subsequent

               applications arising out of the arbitration agreement and the arbitral
              process.

1. However, within the scheme of the A&C Act, Section 42 is not
   intended to vest exclusive jurisdiction in a court merely by virtue of
   the fortuitous, premature, or tactical filing of an application under Part
   I. The underlying legislative intent is to prevent multiplicity of
   proceedings and to ensure procedural certainty and consistency, but
   only after a court of competent jurisdiction has validly and lawfully
   assumed seisin of the matter. Consequently, the jurisdiction
   contemplated under Section 42 of the A&C Act must be real,
   effective, and legally sustainable, and cannot be founded upon a
   jurisdictional assumption that is illusory, contrived, or inherently
   lacking in competence.

2. The expression "has been made in a Court" occurring in
   Section 42 assumes considerable significance, as it necessarily
   requires a determination of what qualifies as a "Court" for the
   purposes of the A&C Act. This determination is not left to general
   notions of jurisdiction, but is specifically governed by Section 2(1)(e)
   of the Act, which provides an exhaustive and determinative definition
   of the term "Court" as under:

"2. Definitions. - (1) In this Part, unless the context otherwise
requires, -

(e) "Court" means -

(i) in the case of an arbitration other than international commercial
arbitration, the principal Civil Court of original jurisdiction in a
district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction to decide the
questions forming the subject-matter of the arbitration if the same
had been the subject-matter of a suit, but does not include any Civil
Court of a grade inferior to such principal Civil Court, or any Court
of Small Causes;

(ii) in the case of international commercial arbitration, the High
Court in exercise of its ordinary original civil jurisdiction, having

jurisdiction to decide the questions forming the subject-matter of
the arbitration if the same had been the subject-matter of a suit, and
in other cases, a High Court having jurisdiction to hear appeals
from decrees of courts subordinate to that High Court;"
(emphasis supplied)

1. A plain and contextual reading of the said definition makes it
   manifest that the term "Court" refers to the principal civil court of
   original jurisdiction in a district, or, where applicable, a High Court
   exercising ordinary original civil jurisdiction, provided such court is
   competent to adjudicate the subject-matter of the arbitration as if it
   were a civil suit. The provision expressly excludes courts subordinate
   to such principal civil court, as well as Courts of Small Causes.

2. The determinative test, therefore, is whether the forum in
   question possesses the requisite subject-matter, territorial, and
   pecuniary jurisdiction to entertain and decide the dispute forming the
   subject-matter of the arbitration. In the context of domestic arbitration,
   this would ordinarily denote the principal civil court at the district
   level; however, in jurisdictions such as Delhi, Mumbai, Kolkata,
   Chennai, and Himachal Pradesh, where High Courts exercise ordinary
   original civil jurisdiction, such High Courts would also qualify as the
   "Court" within the meaning of the A&C Act, subject to the applicable
   pecuniary thresholds. Thus, the expression "Court" for the purposes of
   Section 42 must be understood as the forum which is otherwise
   competent to entertain the dispute in terms of Section 2(1)(e) of the
   Act.

3. The phrase "having jurisdiction to decide the questions forming
   the subject-matter of the arbitration" further reinforces that only a
   court vested with complete and lawful jurisdiction, encompassing
   subject-matter, territorial, and pecuniary competence, can validly

              assume supervisory authority over arbitral proceedings under the
             A&C Act. In the present case, the principal controversy between the
             parties centres around the territorial jurisdiction of this Court to
             entertain the present proceedings.
   

4.   Consequently, for the bar under Section 42 of the A&C Act to
             be attracted, it is not sufficient that the initial application is one
             referable to Part I of the Act; it must, in addition, be instituted before
             and entertained by a court that satisfies the statutory definition under
             Section 2(1)(e). This legal position stands authoritatively settled by a
             three-Judge Bench of the Hon‟ble Supreme Court in [State of W.B. v.
             Associated Contractors9](https://indiankanoon.org/doc/107180491/), wherein it was held that the exclusivity
             contemplated under Section 42 is triggered only when the first
             application is made to a court of competent jurisdiction. Applications
             instituted before forums lacking jurisdiction, or before authorities that
             do not qualify as a "Court" within the meaning of the Act, fall outside
             the ambit of Section 42 and, therefore, do not operate as a bar to
             subsequent proceedings being instituted before a duly competent
             forum. The relevant portion of [the said judgment](https://indiankanoon.org/doc/107180491/) reads as under:
   

"24. If an application were to be preferred to a court which is not a
Principal Civil Court of original jurisdiction in a district or a High
Court exercising original jurisdiction to decide questions forming
the subject matter of an arbitration if the same had been the subject
matter of a suit, then obviously such application would be outside
the four corners of Section 42. If, for example, an application were
to be filed in a court inferior to a Principal Civil Court, or to a High
Court which has no original jurisdiction, or if an application were
to be made to a court which has no subject-matter jurisdiction,
such application would be outside Section 42 and would not debar
subsequent applications from being filed in a court other than such
court.

1. Our conclusions therefore on Section 2(1)(e) and Section 42 of the Arbitration Act, 1996 are as follows:

(2015) 1 SCC 32

(a) Section 2(1)(e) contains an exhaustive definition marking out
only the Principal Civil Court of Original Jurisdiction in a
district or a High Court having original civil jurisdiction in the
State, and no other court as "court" for the purpose of Part I of
the Arbitration Act, 1996.

(b) The expression "with respect to an arbitration agreement"
makes it clear that Section 42 will apply to all applications made
whether before or during arbitral proceedings or after an award
is pronounced under Part I of the 1996 Act.

(c) However, Section 42 only applies to applications made under
Part I if they are made to a court as defined. Since applications
made under Section 8 are made to judicial authorities and since
applications under Section 11 are made to the Chief Justice or
his designate, the judicial authority and the Chief Justice or his
designate not being court as defined, such applications would be
outside Section 42.

(d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are
applications which are within Section 42.

(e) In no circumstances can the Supreme Court be "court" for the
purposes of Section 2(1)(e), and whether the Supreme Court
does or does not retain seisin after appointing an arbitrator,
applications will follow the first application made before either a
High Court having original jurisdiction in the State or a
Principal Civil Court having original jurisdiction in the district,
as the case may be.

(f) Section 42 will apply to applications made after the arbitral
proceedings have come to an end provided they are made under
Part I.

(g) If a first application is made to a court which is neither a
Principal Court of Original Jurisdiction in a district or a High
Court exercising original jurisdiction in a State, such application
not being to a court as defined would be outside Section 42.
Also, an application made to a court without subject-matter
jurisdiction would be outside Section 42.

The reference is answered accordingly."

1. In the present case, although a petition under Section 9 of the
   A&C Act was initially instituted before this Court, there is no
   consideration, either express or implied, that this Court possessed the
   requisite jurisdiction to entertain the same. This aspect assumes
   particular significance in light of the sequence of events that unfolded.
   The initial order dated 27.01.2021, directing Respondent No. 1 to

              maintain the status quo, came to be passed in its absence, as
             Respondent No. 1 had not yet entered an appearance. On the very next
             date of hearing, upon Respondent No. 1 entering an appearance before
             this Court, the Petitioner chose, of its own volition, to withdraw the
             said petition. As a direct consequence of such withdrawal at a nascent
             stage, the question of jurisdiction, whether territorial, pecuniary, or
             with respect to subject-matter, was neither adjudicated upon nor even
             substantively examined by this Court.
   

2. In this backdrop, it becomes evident that Respondent No. 1 was
   effectively deprived of any meaningful and substantive opportunity to
   raise objections as to the jurisdiction of this Court. Jurisdictional
   objections, particularly those going to the root of the matter, are
   required to be raised and determined at the threshold, so as to ensure
   that proceedings are not conducted before a forum lacking
   competence in law. Had the proceedings under Section 9 been pursued
   and contested, Respondent No. 1 would have been fully entitled to
   challenge the maintainability of the petition on jurisdictional grounds,
   and this Court would have been called upon to render a considered
   finding on such objections. However, in the absence of any such
   opportunity or adjudication, no presumption can be drawn that this
   Court had validly assumed jurisdiction over the dispute.

3. In these circumstances, it would be wholly untenable to suggest
   that Respondent No. 1 stands precluded, by operation of Section 42 of
   the A&C Act, from questioning the jurisdiction of this Court in the
   present proceedings. Section 42 cannot be construed in a manner that
   forecloses a party‟s right to raise a fundamental jurisdictional
   objection, particularly when such objection could never be raised or
   was never adjudicated upon at any prior stage. Indeed, if this Court

              otherwise lacks jurisdiction in accordance with the settled principles
             of law, the mere prior filing of a petition under [Section 9](https://indiankanoon.org/doc/1079220/) or any other
             petition of application under the A&C Act, without any determination
             thereon, cannot operate as a binding factor so as to confer jurisdiction
             by default or estoppel. It is a settled principle of law that jurisdiction
             cannot be conferred by acquiescence, waiver, or mere procedural
             happenstance; it must inherently exist in law and be demonstrable in
             accordance with established legal principles.
   

4. In such circumstances, to hold that the mere filing of a petition
   under Section 9, followed by its immediate withdrawal, or the
   institution of any application under Part I of the Act without any
   judicial scrutiny on the issue of jurisdiction, would irrevocably vest
   exclusive jurisdiction in that court under Section 42 of the A&C Act,
   would amount to a manifest distortion and misuse of the statutory
   framework. Section 42 of the A&C Act, as noticed hereinabove, is
   intended to ensure consistency and avoid multiplicity of proceedings
   by conferring exclusive jurisdiction upon a court that has validly
   assumed seisin of the arbitral process. However, such an assumption
   of jurisdiction must be real, effective, and judicially sustainable.

5. Where proceedings are terminated at the threshold without any
   adjudication, and where the opposing party is not even afforded a fair
   and effective opportunity to contest the competence of the forum, the
   foundational requirement for the application of Section 42 of the A&C
   Act remains unfulfilled. To permit the invocation of Section 42 of the
   A&C Act in such a scenario would enable parties to engage in forum
   shopping by filing proceedings in a court of their choice, obtaining ad
   interim orders in the absence of the opposite party, and thereafter
   withdrawing such proceedings so as to create an artificial basis for

              invoking exclusivity. Such an interpretation would not only defeat the
             legislative intent underlying [Section 42](https://indiankanoon.org/doc/192913/) of the A&C Act but would
             also undermine the principles of fairness, procedural propriety, and
             jurisdictional discipline that form the bedrock of the arbitral
             framework.
   

6. Accordingly, Section 42 of the A&C Act cannot be invoked to
   legitimise or sanctify proceedings instituted before a forum whose
   competence remains uncertain, untested, or unadjudicated, particularly
   where such proceedings are not carried to their logical or legal
   conclusion. The provision cannot be employed as a tool to create
   jurisdiction where none exists, nor can it be used to preclude a
   legitimate challenge to jurisdiction in subsequent proceedings.

7. This Court is, therefore, unable to accept the proposition that a
   unilateral and transient invocation of jurisdiction, by way of filing an
   application under Part I of the Act before a potentially incompetent
   forum, can bind the parties for all subsequent proceedings arising out
   of the arbitration agreement. The exclusivity envisaged under Section
   42 A&C Act is neither automatic nor mechanical; rather, it is
   conditional upon the initial application having been made before a
   court of competent jurisdiction which has validly and effectively
   assumed seisin of the arbitral process.

8. The concept of "seisin" in this context necessarily implies a
   conscious and lawful assumption of jurisdiction by the court, coupled
   with an opportunity to the parties to contest such jurisdiction and a
   corresponding judicial determination, whether express or implicit. In
   the absence of such elements, the mere filing of an application cannot
   be elevated to the status of a jurisdiction-conferring event. To hold

              otherwise would be to reduce the statutory safeguards embedded in
             the A&C Act to a matter of form rather than substance.
   

9.   In view of the foregoing analysis, and having regard to the facts
             and circumstances of the present case, this Court is of the considered
             view that the reliance placed by the Petitioner on [Section 42](https://indiankanoon.org/doc/192913/) of the
             A&C Act, to sustain the jurisdiction of this Court, is wholly
             misconceived and untenable in law. The invocation of [Section 42](https://indiankanoon.org/doc/192913/) of
             the A&C Act, in the absence of any prior adjudication or lawful
             assumption of jurisdiction, cannot operate as a bar to the present
             proceedings, nor can it confer jurisdiction where none otherwise
             exists.
   

10.   The determinative question that thus arises for consideration is
              whether this Court independently possesses the requisite jurisdiction,
              within the meaning of the A&C Act and in accordance with settled
              principles governing territorial competence, which constitutes the
              central issue in the present adjudication, to entertain the petition
              arising out of the arbitration agreement and the arbitral proceedings in
              question. It is only upon a proper and conclusive determination of this
              foundational issue that the maintainability of the present proceedings
              can be finally determined.
    

11.   The Court now turns to the next aspect for consideration,
              namely, the interpretation and effect of the relevant clauses of the
              agreement executed between the parties, in particular the Dispute
              Resolution Clauses and the Exclusive Jurisdiction Clause contained
              therein, which are extracted herein below for ready reference:
    

"....

Article 26 Dispute Resolution

26.1 Dispute Resolution

(i) Any dispute, difference or controversy of whatever nature
howsoever arising under or out of or in relation to this Agreement
(including its interpretation) between the Parties, and so notified in
writing by either Party to the other party (the ''Dispute") shall, in
the first instance, be attempted to be resolved amicably in
accordance with the conciliation procedure set forth in Clause 26.2.

(ii) The Parties agree to use their best efforts for resolving all
Disputes arising under or in respect of this Agreement promptly,
equitably and in good faith, and further agree to provide each other
with reasonable access during normal business hours to all non-
privileged records, information and data pertaining to any Dispute.

26.2 Conciliation
****
26.3. Arbitration

(i) Any Dispute which is not resolved amicably by conciliation, as
provided in Clause 26.2, shall be finally settled by arbitration in
accordance with the rules of arbitration of the Society for
Affordable Redressal of Disputes (SAROD).

(ii). The parties expressly agree as under in case of arbitration of
disputes:

(a) There shall be no arbitration for a dispute involving a claim
value upto INR 50 Lakh (IN fifty lakh). The Authority's
Engineer shall give a reasoned decision in case of such dispute
and the same shall be binding on both the parties.

(b) In case of a dispute involving claim value of above INR
50Lakh (INR fifty lakh), but upto INR 50 Crore (INR fifty
crore), the same shall be referred to a Sole Arbitrator within 30
days propose names of 5 (five) Arbitrators from the list of
Arbitrators maintained by SAROD (Society for Affordable
Redressal of Disputes) and the Contractor shall within 30
(thirty) days select one name from the list of five and the name
so selected by the Contractor shall be the Sole Arbitrator for
the matter in dispute. In case Authority delays in providing the
list of 5 (five) names, President, SAROD will provide 5 names
within 30 (thirty) days of receipt of reference from aggrieved
party in this regard In case the Contractor fails in selecting one
from the list of five, President, SAROD shall select one from
the list of five provided by Authority within 30 (thirty)days of
receipt of reference from aggrieved party in this regard

(c) In case of a dispute involving a claim value of more than IN
50 Crore (INR Fifty crore), the same shall be referred to an
Arbitral Tribunal comprising 3 (three) Arbitrators. The Dispute
shall be settled in accordance with the rules of Arbitration of
the Society for Affordable Redressal of Disputes (SAROD)

(d) The venue of arbitration shall be Ranchi, and the language if
arbitration proceedings shall be in English.

---

                     26.4 Adjudication          by   Regulatory   Authority,   Tribunal   or
                     Commission
                                                   ***** [Article 27](https://indiankanoon.org/doc/211413/) Miscellaneous
                     27.1 Governing law and jurisdiction
                     This Agreement shall be construed and interpreted in accordance
                     with and governed by laws of India, and the courts at [Ranchi]
                     shall have exclusive jurisdiction over matters arising out of or
                     relating to this Agreement."

---

                                                                                 ...."

(emphasis supplied)

1. It is also necessary to advert to Rule 23 of the SAROD Arbitration Rules, upon which considerable reliance has been placed by the Petitioner in support of the contention that the juridical seat of arbitration ought to be New Delhi. The said Rule 23 reads as follows:

"Rule 23 - Judicial Seat of Arbitration
23.1 Unless otherwise agreed by the Parties, the judicial seat of
arbitration shall be New Delhi. The venue for the Arbitration
meeting shall be organized by the SAROD Secretariat.
23.1 Notwithstanding Rule 22 and 23.1, the Tribunal may, unless
otherwise agreed by the Parties, hold hearings and meetings
anywhere convenient, subject to the provisions of Rule 28.2."
(emphasis supplied)

1. A holistic and purposive reading of Clauses 26 and 27 of the
   agreement, however, reveals that the intention of the parties with
   respect to jurisdiction and the arbitral framework must be discerned
   from the agreement as a whole, and not from isolated provisions read
   in abstraction. The contractual scheme indicates a carefully structured
   dispute resolution mechanism, beginning with amicable resolution and
   conciliation, followed by arbitration under SAROD Rules, and
   culminating in a clear stipulation regarding governing law and
   exclusive jurisdiction.

2. The principal controversy between the parties, therefore, centres
   on the determination of the juridical seat of arbitration. While
   Respondent No. 1 relies upon Clause 26.3(ii)(d), which designates
   Ranchi as the venue of arbitration, read conjointly with Clause 27.1,
   which confers exclusive jurisdiction upon courts at Ranchi, to contend
   that Ranchi is the seat of arbitration, the Petitioner, on the other hand,
   relies upon the incorporation of SAROD Arbitration Rules through
   Clause 26.3(i), and then read with Rule 23 of the SAROD Arbitration
   Rules, to assert that New Delhi must be treated as the juridical seat.

3. This Court is unable to accept the submissions advanced on
   behalf of the Petitioner. The contention that the seat of arbitration is
   New Delhi, solely by virtue of the incorporation of SAROD Rules,
   overlooks the fundamental principle that party autonomy must be
   gathered from the express terms of the contract, and that a clear and
   specific stipulation in the agreement cannot be overridden by a general
   provision contained in a set of institutional rules.

4. The determination of the juridical seat in the present case,
   therefore, necessitates a careful reconciliation of three competing
   contractual indicators, first, the designation of Ranchi as the venue of
   arbitration; second, the conferment of exclusive jurisdiction upon
   courts at Ranchi; and third, the incorporation of SAROD Rules, which
   provide that, in the absence of agreement to the contrary, the seat shall
   be New Delhi. The resolution of this apparent divergence must be
   guided by settled principles of arbitral jurisprudence, particularly
   those relating to party autonomy, contractual interpretation, and the
   distinction among "seat", "venue", "exclusive jurisdiction", and
   "institutional rules".

5.   It is well settled that the "seat" of arbitration constitutes the
             juridical centre of gravity of the arbitral process. It determines the
             curial law governing the arbitration and identifies the court that
             exercises supervisory jurisdiction over the arbitral proceedings. The
             Hon‟ble Supreme Court, in a catena of decisions including [Indus
             Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd.10 and
             BGS SGS Soma JV](https://indiankanoon.org/doc/75853915/) (supra), has authoritatively held that the
             designation of a seat is akin to an exclusive jurisdiction clause,
             conferring supervisory authority upon the courts of that seat to the
             exclusion of all others. However, these principles operate on the
             foundational premise that the seat has been clearly and consciously
             designated by the parties.
   

6.   In the present case, the agreement does not contain any explicit
             stipulation designating New Delhi as the seat of arbitration. The
             Petitioner‟s contention seeks to derive such designation indirectly, on
             account of the adoption of SAROD Rules. This distinction between an
             express designation and a derivative or implied attribution is of
             critical importance. The juridical seat must emanate from the
             conscious and deliberate choice of the parties, and not from a default
             provision contained in institutional rules, particularly where the
             contract itself contains indications to the contrary.
   

7.   In contrast, the agreement contains two clear and unequivocal
             stipulations pointing towards Ranchi. First, Clause 26.3(ii)(d)
             designates Ranchi as the venue of arbitration. Second, and more
             significantly, Clause 27.1 confers exclusive jurisdiction upon courts at
             Ranchi in respect of all matters arising out of or relating to the
             agreement. These provisions are explicit, deliberate, and leave little
   
                  (2017) 7 SCC 678
   
              room for ambiguity. The exclusive jurisdiction clause, in particular, is
             a strong indicator of the parties‟ intention to localise all legal
             proceedings in Ranchi.
   

8.   While it is true that the designation of a "venue" does not, in
             every case, amount to the designation of a "seat", the legal position is
             equally clear that where the designation of a venue is accompanied by
             other significant indicia, such as an exclusive jurisdiction clause, the
             venue may, in fact, assume the character of the seat. The combined
             effect of specifying Ranchi as the venue and conferring exclusive
             jurisdiction upon Ranchi courts strongly suggests that the parties
             intended Ranchi to be the juridical seat of arbitration.
   

9.   This position finds support in the decisions of the Hon‟ble
             Supreme Court in Brahmani River Pellets Ltd. v. Kamachi Industries
             Ltd.11 and BGS SGS Soma JV (supra), wherein it has been held that
             where an agreement specifies a particular place for arbitration and also
             evinces an intention to exclude other courts, such place may be
             construed as the seat of arbitration. The rationale underlying this
             principle is that the combination of a specified location and an
             exclusionary jurisdiction clause reflects a conscious and deliberate
             localisation of the arbitral process. The relevant extract of [BGS SGS
             Soma JV](https://indiankanoon.org/doc/143184125/) (supra) is reproduced below:
   

"59. Equally incorrect is the finding in Antrix Corpn.
Ltd. v. Devas Multimedia (P) Ltd., 2018 SCC OnLine Del 9338,
that Section 42 of the Arbitration Act, 1996 would be rendered
ineffective and useless. Section 42 is meant to avoid conflicts in
jurisdiction of courts by placing the supervisory jurisdiction over
all arbitral proceedings in connection with the arbitration in one
court exclusively. This is why the section begins with a non
obstante clause, and then goes on to state "...where with respect to
an arbitration agreement any application under this part has been
made in a court..." It is obvious that the application made under

(2020) 5 SCC 462

this part to a court must be a court which has jurisdiction to decide
such application. The subsequent holdings of this court, that where
a seat is designated in an agreement, the courts of the seat alone
have jurisdiction, would require that all applications under Part I be
made only in the court where the seat is located, and that court
alone then has jurisdiction over the arbitral proceedings and all
subsequent applications arising out of the arbitral agreement. So
read, Section 42 is not rendered ineffective or useless. Also, where
it is found on the facts of a particular case that either no "seat" is
designated by agreement, or the so-called "seat" is only a
convenient "venue", then there may be several courts where a part
of the cause of action arises that may have jurisdiction. Again, an
application under Section 9 of the Arbitration Act, 1996 may be
preferred before a court in which part of the cause of action arises
in a case where parties have not agreed on the "seat" of arbitration,
and before such "seat" may have been determined, on the facts of a
particular case, by the Arbitral Tribunal under Section 20(2) of the
Arbitration Act, 1996. In both these situations, the earliest
application having been made to a court in which a part of the
cause of action arises would then be the exclusive court under Section 42, which would have control over the arbitral
proceedings. For all these reasons, the law stated by the Bombay
and Delhi High Courts in this regard is incorrect and is overruled.

---

                     Tests for determination of "seat"

1. The judgments of the English courts have examined the concept of the "juridical seat" of the arbitral proceedings, and have laid down several important tests in order to determine whether the "seat" of the arbitral proceedings has, in fact, been indicated in the agreement between the parties. The judgment of Cooke, J., in Shashoua v. Sharma, 2009 EWHC 957 (Comm): (2009) 2 Lloyd's Law Rep 376, states:

"34. London arbitration is a well-known phenomenon
which is often chosen by foreign nationals with a different
law, such as the law of New York, governing the
substantive rights of the parties. This is because of the
legislative framework and supervisory powers of the
courts here which many parties are keen to adopt. When
therefore there is an express designation of the arbitration
venue as London and no designation of any alternative
place as the seat, combined with a supranational body of
rules governing the arbitration and no other significant
contrary indicia, the inexorable conclusion is, to my mind,
that London is the juridical seat and English Law the
curial law. In my judgment it is clear that either London
has been designated by the parties to the arbitration
agreement as the seat of the arbitration, or, having regard
to the parties' agreement and all the relevant

circumstances, it is the seat to be determined in
accordance with the final fall back provision of Section 3 of the Arbitration Act."
61. It will thus be seen that wherever there is an express
designation of a "venue", and no designation of any alternative
place as the "seat", combined with a supranational body of rules
governing the arbitration, and no other significant contrary indicia,
the inexorable conclusion is that the stated venue is actually the
juridical seat of the arbitral proceeding."

(emphasis supplied)

1. Applying the aforesaid principles to the facts of the present
   case, this Court is of the considered view that Ranchi cannot be
   regarded as a mere geographical venue chosen for convenience.
   Rather, it emerges as the juridical focal point intended by the parties.
   The presence of an exclusive jurisdiction clause in favour of Ranchi
   courts removes any residual ambiguity and reinforces the conclusion
   that the parties intended Ranchi to be the seat of arbitration.

2. On the contrary, the reliance placed by the Petitioner on the
   SAROD Arbitration Rules to contend that New Delhi constitutes the
   juridical seat of arbitration must be examined in the proper contractual
   and legal context. It is a well-settled canon of contractual
   interpretation that terms incorporated by reference, whether expressly
   or by necessary implication, cannot override or supplant clear and
   specific stipulations contained in the principal agreement between the
   parties. Institutional arbitration rules are, by their very nature,
   designed to provide a procedural framework for the conduct of arbitral
   proceedings. While such rules may supplement the agreement by
   filling gaps or providing default mechanisms in the absence of
   contrary stipulations, they cannot be construed in a manner that
   displaces or nullifies an express contractual arrangement regarding
   jurisdiction, venue, or forum.

3. To accept the Petitioner‟s contention that New Delhi becomes the
   seat of arbitration solely by virtue of the applicability of the SAROD
   Arbitration Rules would effectively elevate a derivative procedural
   provision above the express and negotiated terms of the agreement.
   Such an approach would not only undermine the fundamental
   principle of party autonomy but would also invert the established
   hierarchy between the primary contractual terms and secondary
   incorporated rules. The correct interpretative approach, therefore, is to
   treat institutional rules as subordinate to, and operating within, the
   framework delineated by the agreement, rather than as instruments
   capable of overriding it.

4. Furthermore, the argument advanced by the Petitioner, if
   accepted, would lead to uncertainty and inconsistency in the
   interpretation of arbitration agreements. The Petitioner seeks to isolate
   Clause 26.3(i), which provides that disputes shall be resolved in
   accordance with the SAROD Arbitration Rules, and to read it
   independently so as to import the default seat provision contained in
   Rule 23.1. Such a piecemeal and fragmented reading of the dispute
   resolution clause cannot be countenanced. It is trite that contractual
   provisions must be construed holistically, with due regard to the
   agreement as a whole. A conjoint reading of Clause 26 (dealing with
   dispute resolution) and Clause 27 (dealing with governing law and
   jurisdiction) makes it abundantly clear that the parties intended to
   anchor the arbitral process in Ranchi.

5. This Court also cannot be oblivious to the internal structure and
   scheme of the relevant clauses. Clause 26 constitutes the
   comprehensive dispute resolution mechanism, within which Clause
   26.3 specifically addresses arbitration, including the applicable

              procedural rules, the venue, and the language of proceedings. Clause
             27.1, on the other hand, is a distinct and explicit provision dealing
             with governing law and jurisdiction, wherein it is categorically
             stipulated that the courts at Ranchi shall have exclusive jurisdiction
             over all matters arising out of or relating to the agreement. The intent
             of the parties, as reflected in these provisions, is both clear and
             unequivocal. A harmonious construction of the designation of Ranchi
             as the venue, read together with the conferment of exclusive
             jurisdiction upon Ranchi courts, leads to the inescapable conclusion
             that Ranchi was intended to be the juridical centre of the arbitral
             process. The mere absence of the express term "seat" in the agreement
             does not detract from, or dilute, the significance of these provisions in
             determining the parties‟ intention as to the seat of arbitration.
   

6. It is also a settled principle that contractual provisions must be
   interpreted in a manner that gives effect to all parts of the agreement,
   and avoids any construction that renders a clause redundant, otiose, or
   devoid of meaning. If New Delhi were to be treated as the seat of
   arbitration, the express conferment of exclusive jurisdiction upon the
   courts at Ranchi would be rendered nugatory. Such an interpretation
   would effectively deprive Clause 27.1 of its substantive content and
   reduce it to a mere surplusage, which is impermissible in law. If the
   parties had indeed intended to designate Ranchi as the venue and to
   confer exclusive jurisdiction upon its courts, while simultaneously
   treating New Delhi as the seat of arbitration, such an arrangement
   would have been explicitly provided for in the agreement. It cannot be
   inferred indirectly by placing reliance on a default provision contained
   in institutional rules. Acceptance of the Petitioner‟s construction
   would, in effect, result in a situation where, in most institutional

              arbitrations, the default provisions of arbitral rules would override
             contractual stipulations unless the term "seat" is expressly used, an
             outcome that is both anomalous and contrary to established principles
             of contractual interpretation.
   

7. It is further pertinent to note that Rule 23.1 of the SAROD
   Arbitration Rules itself is prefaced with the qualifying expression
   "unless otherwise agreed by the Parties". This phrase is of critical
   importance, as it clearly indicates that the default designation of New
   Delhi as the seat is subject to any contrary agreement between the
   parties. In the present case, the agreement, when read as a whole,
   clearly manifests such a contrary intention by designating Ranchi as
   the venue and conferring exclusive jurisdiction upon its courts.
   Accordingly, the default rule contained in Rule 23.1 stands displaced
   by the express and implied terms of the agreement. In any event, at the
   cost of repetition, institutional rules cannot, as a matter of principle,
   override the express or necessarily implied contractual stipulations
   agreed upon between the parties.

8. As regards the various judicial precedents relied upon by the
   Petitioner, this Court is of the considered view that none of them
   advance the Petitioner‟s case in the factual matrix at hand. In none of
   the cited decisions has it been held that a default provision contained
   in the rules of an arbitral institution can override a clear designation of
   venue coupled with an exclusive jurisdiction clause in determining the
   seat of arbitration. The factual and contractual context in the present
   case is materially distinct, and the principles laid down in those
   decisions do not support the proposition canvassed by the Petitioner.

9. Lastly, this Court is of the considered view that treating Ranchi
   as the juridical seat of arbitration enables a harmonious and consistent

              construction of the arbitration agreement in its entirety. Under this
             interpretation, Ranchi serves both as the designated venue and the
             juridical seat of arbitration; consequently, the courts at Ranchi alone
             would exercise exclusive supervisory jurisdiction over the arbitral
             proceedings. At the same time, the SAROD Arbitration Rules operate
             purely as the procedural framework governing the conduct of the
             arbitration and do not, in any manner, displace or dilute the parties‟
             express choice of seat. Such a construction preserves the coherence,
             efficacy, and internal consistency of the contractual arrangement,
             while giving due primacy to the clearly manifested intention of the
             parties.
   

10. Further, this Court cannot lose sight of the fact that it is
    nobody‟s case before this Court that any part of the contract was
    performed in Delhi. On the contrary, the cause of action between the
    parties has arisen in Ranchi. This undisputed factual matrix lends
    further support to the conclusion that Ranchi constitutes the
    appropriate juridical seat of arbitration.

11. It is also pertinent to emphasise that the doctrine of the arbitral
    seat is ultimately a means to give effect to party autonomy, and not to
    defeat it. Where the agreement discloses a clear and discernible
    preference for a particular forum, courts must lean in favour of
    upholding that choice, unless there exists an equally clear and
    competing designation of seat. In the present case, no such competing
    express designation exists. The invocation of New Delhi as the seat
    rests solely on an indirect and inferential basis, which is insufficient to
    override the clear contractual indicators pointing towards Ranchi.

12. In view of the foregoing discussion, this Court is of the
    considered opinion that the only tenable conclusion is that the parties,

               by expressly designating Ranchi as the venue of arbitration and by
              conferring exclusive jurisdiction upon the courts at Ranchi, have
              consciously and unequivocally chosen Ranchi as the juridical seat of
              arbitration. The incorporation of the SAROD Arbitration Rules does
              not evince any contrary intention sufficient to displace this conclusion
              and must be understood as procedural in character.
    

13.  Accordingly, the reliance placed by the Petitioner on Clause
              26.3(i) read with Rule 23.1 of the SAROD Arbitration Rules to
              contend that New Delhi is the seat of arbitration is misconceived and
              untenable, and is therefore rejected.
    

CONCLUSION:

1.  In view of the foregoing analyses, this Court is of the
   

   considered opinion that it lacks territorial jurisdiction to entertain the
   present petition. The competent court, having regard to the contractual
   stipulations and the juridical seat of arbitration, is the court at Ranchi
   alone.

2.  Accordingly, the present petition is held to be not maintainable
   

   and is, therefore, dismissed.

3.  The present Petition, along with pending application(s), if any,
   

   stands disposed of in the above terms.

4.  No orders as to cost.
   

   HARISH VAIDYANATHAN SHANKAR, J.

APRIL 01, 2026/sm/va