Full Judgment Text
REPORTABLE
2026 INSC 368
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. OF 2026
(@ SLP (C) No. OF 2026)
(@ DIARY No.44792 OF 2025)
J&K ECONOMIC
RECONSTRUCTION AGENCY ... APPELLANT
VERSUS
RASH BUILDERS INDIA
PRIVATE LIMITED … RESPONDENT
J U D G M E N T
ALOK ARADHE, J.
1. Delay condoned.
2. Leave granted.
3. The present appeal presents an occasion to revisit the settled
distinction between the seat and venue of arbitration, and
consequent determination of supervisory jurisdiction of the
courts. The appeal arises from an order directing return of a
Signature Not Verified
petition under Section 34 of Jammu & Kashmir Arbitration
Digitally signed by
Jayant Kumar Arora
Date: 2026.04.16
11:35:36 IST
Reason:
and Conciliation Act, 1997 (Act).
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FACTS: -
4. The facts giving rise to the present appeal are undisputed and
may be briefly stated. The appellant, Jammu and Kashmir
Economic Reconstruction Agency (JKERA) is a society
registered under the Societies Registration Act, 1941
functioning as a special purpose vehicle for execution of
externally aided infrastructure projects. The respondent is a
contractor engaged by the appellant for execution of four
infrastructure road projects namely, (i) Kralgund-Ashpora-
Qaziabad Road Project (Kralgund Project) (ii) Handwara-
Zachaldara-Waddur Road Project (Handwara Project) (iii)
Hubdipora-Kadar-Qaimoh Road Project (Hubdipora Project) and
(iv) Shahdra-Kamalkote Road Project (Shahdra Project) in the
State of Jammu & Kashmir. The agreements between the
parties were executed on 31.03.2008.
5. Disputes having arisen between the parties regarding the
contractual claims, the respondent invoked the arbitration, by
issuing a notice on 18.04.2014, in terms of Arbitration clause
contained in the agreements. The respondent thereafter filed
four separate applications on 12.06.2014 under Section 11 of
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the Act before the High Court of Jammu & Kashmir and
Ladakh at Srinagar (High Court) for appointment of sole
arbitrator for each project. By an order dated 30.07.2015, the
High Court, appointed Mr. Javed Ahmad Kawoosa, former
District and Sessions Judge as sole arbitrator.
6. The appellant challenged the said order by filing Civil Appeal
Nos.14167-14170 of 2015. By an order dated 07.12.2015, this
Court, having regard to the value of the contracts, modified the
High Court order and appointed Mr. Justice S.S. Nijjar, former
Judge of this Court as the sole arbitrator in substitution of the
previously appointed arbitrator.
7. By an order dated 26.03.2016, 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, on
26.03.2021, the High Court in exercise of powers under
Sections 14 and 15 of the Act vide order dated 17.09.2021
appointed Mr. Justice Amitava Roy, a former Judge of this
Court, as the sole arbitrator to continue proceedings from the
stage left by the previous arbitrator. The arbitral award was
delivered on 15.01.2024 at New Delhi. The applications under
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Section 33 of the Act filed by the appellant, were subsequently
decided by an order dated 12.03.2024.
8. The appellant filed a petition under Section 34 of the Act before
the High Court seeking to set aside the arbitral award dated
15.01.2024 and order dated 12.03.2024 in so far it related to
Shahdra Project. The respondent raised a preliminary objection
regarding the territorial jurisdiction.
9. By an order dated 08.07.2024, the 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.
SUBMISSIONS: -
10. Learned counsel for the appellant contended that by an order
dated 26.03.2016, 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 is
submitted that where the seat and venue differ, the seat
determines the supervisory jurisdiction, hence the courts at
Srinagar alone possess jurisdiction under Section 34 of the
Act.
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11. Learned counsel for the respondent, on the other hand,
submitted that appellant had also approached High Court of
Delhi by filing petitions under Section 34 of the Act and
thereafter has filed the Special Leave Petition. It is contended
that arbitral award recorded New Delhi as the place of
arbitration for all intents and purposes, and parties may alter
seat by mutual consent. Therefore, the appeal is liable to be
dismissed. In support of the aforesaid submissions, reliance
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has been placed on the decisions of this Court .
CASE LAW AND THE LEGAL PRINCIPLES: -
12. The distinction between the seat and venue of arbitration
though, firmly embedded in arbitral jurisprudence, continues
to give rise to jurisdictional errors. The present appeal
exemplifies one such instance, necessitating judicial correction.
The core issue is 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. In order to answer this question, it
1
Inox Renewables Ltd. v. Jayesh Electricals Ltd.; (2023) 3 SCC 733, BBR
(India) Private Limited v. S.P. Singla Constructions Private Limited; (2023) 1
SCC 693, BGS SGS SOMA JV v. NHPC Ltd.; (2020) 4 SCC 234 and Mankastu
Impex (Pvt.) Ltd. v. Airvisual Ltd.; (2020) 5 SCC 399
5
becomes necessary to revisit the well-settled principles
governing the concept of juridical seat of arbitration.
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13. A Constitution Bench of this Court , recognised that arbitration
is anchored to the seat or place chosen by the parties, and that
the law of that seat governs the arbitration. It was observed
that Section 20 of the Arbitration and Conciliation Act, 1996
embodies party autonomy in the choice of seat, while also
permitting, under sub-section (3), the holding of hearings at a
place convenient to the parties. The distinction is both
deliberate and doctrinal: while the seat determines jurisdiction
and applicable law, the venue is merely a matter of convenience
for conducting proceedings.
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14. A two-Judge Bench of this Court while placing reliance on the
“closest and most intimate connection” test involved in English
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jurisprudence , held that seat of arbitration is juridical home of
arbitration and where the agreement of the parties is clear,
such designation must be given full effect. Even in cases of
ambiguity, the seat is to be determined by identifying the place
2
Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9
SCC 552.
3
Enercon (India) Ltd. & Ors. v . Enercon GMBH & Anr.; (2014) 5 SCC 1.
4
Naviera Amazonica Peruana S.A. v. Compania Internacional de Seguros del
Peru (1988) 1 Lloyd’s Rep 116 (CA).
6
with the closest and most intimate connection to the
arbitration.
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15. Another two-Judge Bench of this Court authoritatively
expounded the concept of the “juridical seat” and held that the
designation of a seat of arbitration is akin to an exclusive
jurisdiction clause. It was observed that the expression
“subject-matter of arbitration” in Section 2(1)(e) of the Act is not
to be confused with the subject-matter of the suit, but rather
refers to the process of dispute resolution, thereby identifying
the court which exercises supervisory jurisdiction over the
arbitral proceedings. It was further held that once a seat is
designated, it operates as the centre of gravity of the arbitration
and vests exclusive jurisdiction in the courts of that place for
all matters arising out of the arbitration, including challenges
to the arbitral award. The designation of a seat, therefore, is not
a matter of mere form, but carries with it significant legal
consequences.
16. The aforesaid principle has been affirmed by a three-Judge
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Bench of this Court and it has been held that the moment the
seat is designated, it operates as an exclusive jurisdiction
5
Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd. & Ors.;
(2017) 7 SCC 678
6
BGS SGS Soma JV v. NHPC Ltd.; (supra)
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clause, irrespective of whether any part of the cause of action
has arisen there. Arbitration law, in this respect, departs from
the Code of Civil Procedure, permitting parties to choose a
neutral seat which may have no connection with the underlying
dispute, yet vests exclusive jurisdiction in the Courts of that
place.
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17. A three-Judge Bench of this Court held that once the seat of
arbitration is designated, such clause becomes the exclusive
jurisdiction clause as a result of which only the courts where
the seat is located would have jurisdiction to the exclusion of
all other courts. Recently, another three-Judge Bench of this
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Court reaffirmed the principle that seat remains the judicial
anchor, determining both the applicable law and the
supervisory jurisdiction.
18. Thus, the principles governing the distinction between the seat
and venue of the arbitration, and the jurisdictional
consequences that follow, may be summarised as under: -
(i) The seat of arbitration constitutes the juridical home or
legal place of arbitration. It determines the curial law
7
Hindustan Construction Co. Ltd. v. NHPC Ltd. & Anr.; (2020) 4 SCC 310; See
also: Mankastu Impex Pvt. Ltd. v. Airvisual Ltd. (supra) and BBR (India) Pvt.
Ltd. v. S.P. Singla Constructions Pvt. Ltd. (supra).
8
Arif Azam Co. Ltd. v. Micromax Informatics FZE; (2025) 9 SCC 750.
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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.
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(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
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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.
APPLICATION TO FACTS: -
19. In the backdrop of aforesaid well-settled legal principles, we
may advert to the facts of the case in hand. In the instant
case, the sole arbitrator by an order dated 26.03.2016 had
fixed the seat of arbitration as Srinagar and venue of
9
Shashoua v. Sharma 2009 EWHC 957 (COMM).
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arbitration as New Delhi. The relevant extract of the order
dated 26.03.2016 reads as under: -
“…In the order dated 16.01.2016 the
direction that the seat of arbitration
shall be Srinagar and that the venue
shall be New Delhi has been
inadvertently omitted. Please note that
on agreement of the parties seat of
Arbitration shall be at Srinagar and
Venue shall be at New Delhi.”
20. In the present case, not only have the parties expressly agreed
upon Srinagar as seat of arbitration, but even the surrounding
circumstances reinforce this conclusion. The contracts are
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.
21. The contention of the respondent that arbitral award records
New Delhi as place of arbitration and is therefore determinative
of the seat cannot be accepted. 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
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remains immutable unless altered by an express agreement. In
the absence of any agreement, the designation of Srinagar as
seat of the arbitration continues to hold the field.
22. 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
23. The approach adopted by the High Court, if upheld, 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.
CONCLUSION: -
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24. For the foregoing reasons, the impugned order returning the
application filed by the appellant under Section 34 of the Act
cannot be sustained. The court at Srinagar being the court of
seat of arbitration, alone possesses the jurisdiction to entertain
and decide the challenge to the arbitral award. It was stated at
the Bar that after the impugned order, the appellant had filed
four separate petitions under Section 34 of the Act before High
Court of Delhi. Needless to state that the appellant shall be at
liberty to withdraw the petition under Section 34 of the Act
relating to Shahdra Project and the fate of remaining three
petitions shall abide by this decision.
25. In the result, impugned order dated 08.07.2024 passed by the
High Court is quashed and set aside. The proceeding under
Section 34 of the Act shall stand restored. The High Court shall
consider and decide the same on its own merits, with due
expedition. The appeal is allowed. There shall be no order as to
costs.
…..…….……………….………….……….J.
[PAMIDIGHANTAM SRI NARASIMHA]
…..…….……………….………….……….J.
[ALOK ARADHE]
NEW DELHI;
APRIL 15, 2026.
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