Amicable settlement clauses are directory; designated seat determines jurisdiction notwithstanding conflicting exclusive jurisdiction clauses.

The Petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator

The dispute arose from a Property Management Service Agreement dated 20.10.2021

Clause 22.2 of the Agreement designated New Delhi as the seat of arbitration, while Clause 22.4 stipulated that the courts of Mumbai would have exclusive jurisdiction over the Agreement

The Petitioner invoked arbitration via a legal notice dated 30.04.2025, which the Respondents declined on 30.05.2025

The Respondents contested the petition’s maintainability, arguing that it was premature due to non-compliance with a pre-arbitration amicable settlement clause and that the Delhi High Court lacked territorial jurisdiction in favor of Mumbai

1. Whether the petition is premature due to non-compliance with the pre-arbitration amicable settlement procedure contemplated under Clause 22.1

2. Whether the Delhi High Court has territorial jurisdiction to entertain the petition when the seat of arbitration is New Delhi, but the agreement confers exclusive jurisdiction to the courts of Mumbai

The court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, concerning the appointment of arbitrators

It relied on Oasis Projects Ltd. v. National Highway & Infrastructure Development Corporation Limited and Kuwar Narayana v. Ozone Overseas Pvt. Limited to establish that pre-arbitration settlement clauses are directory, not mandatory

Regarding jurisdiction, the court followed BGS SGS SOMA JV v. NHPC Ltd. and Ravi Ranjan Developers Private Limited v. Aditya Kumar Chatterjee, which hold that supervisory jurisdiction vests in the courts of the designated "seat" of arbitration

Finally, the court applied the standard of judicial scrutiny defined in SBI General Insurance Co. Ltd. v. Krish Spinning, which confines the court’s role under Section 11 to a prima facie examination of the existence of an arbitration agreement

The court dismissed the Respondents' first objection, reasoning that the requirement to explore amicable settlement before invoking arbitration is merely directory; thus, non-compliance does not render a Section 11 petition premature

Regarding the second objection, the court applied the principle of harmonious construction to Clause 22.2 (Seat: New Delhi) and Clause 22.4 (Jurisdiction: Mumbai). It reasoned that once a "seat" is designated, the courts at that seat possess exclusive supervisory jurisdiction over the arbitral process

The "exclusive jurisdiction" clause in favor of Mumbai was interpreted to apply only to non-arbitral disputes requiring the filing of a suit

Following the mandate in Krish Spinning, the court limited its enquiry to the existence of the arbitration agreement and found no impediment to the appointment of an arbitrator, leaving all other contentious issues for the tribunal to decide

The court appointed Mr. Kamal Digpaul, Advocate, as the Sole Arbitrator to adjudicate the disputes

The arbitrator was directed to provide disclosures under Section 12(2) and was entitled to fees as per the Fourth Schedule of the Act, to be shared equally by the parties

The petition and pending applications were disposed of accordingly