Designation of seat is determinative of jurisdiction only if arbitration agreement specifies a clear juridical seat.

The Petitioner, a 5% shareholder in the Respondent No. 1 partnership firm (M/s Villayati Ram Mittal) under a 2014 Deed, alleged that Respondent No. 2 (holding 95% share) fraudulently projected the Petitioner’s retirement using fabricated documents.

The Petitioner claimed that despite his alleged retirement, no settlement of accounts or valuation of assets (valued at over ₹1,500 Crores) occurred.

Following the Petitioner’s invocation of arbitration and a notice for dissolution, the Respondents filed three eviction suits in the Small Causes Court, Mumbai, to remove the Petitioner from partnership-owned flats.

The Petitioner approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking to stay the eviction suits and protect partnership assets.

The Respondents challenged the territorial jurisdiction, noting the firm’s registered office is in Delhi.

1. Whether the Bombay High Court has territorial jurisdiction under Section 9 when the partnership is registered in Delhi but assets/disputes are in Mumbai?

2. Whether an injunction can be granted under Section 9 to restrain a party from prosecuting eviction suits in a competent Civil Court?

3. Whether the Petitioner made out a prima facie case for interim protection of partnership assets pending arbitration?

The Court applied Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, defining "Court", and Section 20 regarding the "place of arbitration".

It relied on BGS SGS SOMA JV v. NHPC Ltd. and BBR (India) Pvt. Ltd. v. S.P. Singla Constructions, establishing that the "seat" of arbitration determines supervisory jurisdiction.

Regarding partnership property, it applied the principle from Addanki Narayanappa v. Bhaskara Krishtappa, holding that partnership assets are the property of the firm, and a partner’s right is limited to a share in profits and net value upon dissolution.

It further applied Firm Ashok Traders v. Gurumukh Das Saluja, clarifying that Section 9 is intended for formulated interim measures to prevent the frustration of rights under adjudication.

The Court first resolved the jurisdictional challenge by noting that the Partnership Deed did not designate a "seat," and since substantial business was conducted in Mumbai, the assets were located there, and the threat of dispossession arose there, a "substantial part of the cause of action" arose within Mumbai.

On the merits, the Court found that while the Respondents claimed the Petitioner had retired, they failed to produce an undisputed Retirement Deed or proof of settlement of accounts. This created a prima facie triable issue regarding the Petitioner's status as a partner.

The Court reasoned that it could not stay the Small Causes Court proceedings because Section 9 does not confer supervisory/appellate jurisdiction over other competent judicial forums; the Petitioner must raise his defenses (including the effect of the arbitration clause) before that specific court.

The Court partly allowed the petition; it refused to stay the eviction suits in the Small Causes Court but granted interim protection by restraining Respondents from creating third-party rights in Mumbai flats, directing preservation of disputed documents, ordering maintenance of accounts, and prohibiting induction of new partners based on the alleged retirement.