Designation of a Juridical Seat Confers Exclusive Supervisory Jurisdiction Regardless of Where Cause of Action Arises

The Petitioner and Respondent entered into a Facility Agreement on 02.05.2019 containing an arbitration clause.

Following disputes, the High Court at Calcutta appointed a Sole Arbitrator on 22.12.2022.

Pleadings were completed on 08.02.2023, and the mandate was extended by consent until 08.08.2024.

During trial, while cross-examination was ongoing, the Respondent challenged the admissibility of the agreement under the Indian Stamp Act, leading the Tribunal to refer the document to the Collector on 17.06.2024.

The mandate expired on 08.08.2024, prompting the Petitioner to seek a six-month extension under Section 29A of the Arbitration and Conciliation Act, 1996.

The Respondent opposed the petition, alleging lack of territorial jurisdiction and the inadmissibility of the unstamped agreement.

1. Whether the High Court at Calcutta has territorial jurisdiction to entertain a Section 29A petition when the Respondent resides and the agreement was executed outside West Bengal, but the contract designates Kolkata as the "seat".

2. Whether the pending adjudication of stamp duty by the Collector precludes the Court from extending the arbitral mandate.

The Court applied Section 2(1)(e) and Section 29A of the Arbitration and Conciliation Act, 1996.

It relied on the "Seat Theory" established in Bharat Aluminium Company v. Kaiser Aluminium Technical Services.

The "Seat Theory" was clarified in Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd., which holds that the designation of a "seat" is akin to an exclusive jurisdiction clause.

It followed BGS SGS Soma JV v. NHPC Ltd., stating that the courts of the seat have exclusive jurisdiction regardless of where the cause of action arose.

The Court also referenced the Commercial Courts Act, 2015, regarding pecuniary jurisdiction for claims exceeding Rs. 1 crore.

The Court rejected the Respondent's challenge to territorial jurisdiction, noting that Clause 13.2 of the Facility Agreement expressly designated Kolkata as the seat of arbitration, and Clause 13.1 granted exclusive jurisdiction to Kolkata courts.

Following BGS SGS Soma JV, the Court reasoned that the juridical seat—not the location of the parties or the execution of the contract—is the determinative factor for supervisory jurisdiction.

Regarding the Stamp Act objection, the Court held that under Section 29A, it is only concerned with whether the extension of the mandate is warranted for the completion of proceedings, not the merits of evidentiary admissibility, which remains within the Tribunal's domain.

The Court found no undue delay by the Arbitrator.

The proceedings were at an advanced stage of evidence.

It ruled that the designation of a seat confers exclusive jurisdiction even if no part of the cause of action arises there.

The Court extended the mandate of the Sole Arbitrator for six months from the date of the order to ensure the publication of the award.

The petition was disposed of in favour of the Petitioner.