Exclusive jurisdiction clauses in arbitration agreements signify the seat of arbitration, even without specific seat nomenclature.

The Petitioner, a logistics service provider, entered into a Merchant Services Agreement dated 18.09.2024 with the Respondent, an apparel company.

The Petitioner alleged that the Respondent failed to provide accurate data and rider information, leading to operational disruptions and non-payment of outstanding dues amounting to Rs. 2,09,81,622.

The Petitioner invoked arbitration under Clause 8 of the Agreement, which provided for arbitration under the Arbitration and Conciliation Act, 1996, and stipulated that "courts of Delhi shall have the exclusive jurisdiction".

The Respondent resisted the petition, arguing that in the absence of a designated "seat" or "venue," an exclusive jurisdiction clause cannot confer jurisdiction if no cause of action arose in Delhi.

The court primarily applied Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996, regarding the appointment of arbitrators.

It relied heavily on the Supreme Court precedent in M/S Activitas Management Advisor Private Limited v. Mind Plus Healthcare Private Limited (2025), which established that where an exclusive jurisdiction clause is provided in the context of arbitration, it must be construed as indicative of the "seat" of arbitration.

The court also noted the principle from Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., stating that specifying jurisdiction at a particular place excludes all other courts.

The Court examined Clause 8 of the Agreement and found that the parties explicitly agreed to resolve disputes via arbitration and granted exclusive jurisdiction to the Courts of Delhi.

The Respondent’s contention—that the lack of a "seat" designation or cause of action in Delhi precluded jurisdiction—was rejected based on the "seat vs. venue" jurisprudence established by the Apex Court.

The Court reasoned that because the "jurisdiction" was mentioned specifically within the context of the dispute resolution and arbitration clause, the term "jurisdiction" must be understood as the "seat".

Consequently, following the rule in Activitas, the Court held that the parties’ intent to submit to Delhi’s exclusive jurisdiction effectively designated Delhi as the seat of arbitration, thereby empowering the Delhi High Court to entertain the Section 11 petition.

The Court appointed Ms. Varuna Bhandari Gugnani, Advocate, as the Sole Arbitrator to adjudicate the disputes under the aegis of the Delhi International Arbitration Centre (DIAC).

The Respondent was granted liberty to raise the issue of arbitrability before the learned Arbitrator.