Unilateral appointment of a venue becomes the valid seat where the counterparty's conduct indicates waiver of objection and consensus.

The Petitioner, a Non-Banking Financial Company (NBFC), entered into a Business Loan Agreement with the Respondents in March 2023 for Rs. 93,15,000/-

The agreement contained Clause 13.5, which designated the venue of arbitration as Pune "or such other place that the lender may in its sole discretion determine."

Following a default in installments after March 2025, the Petitioner issued a demand notice from its Kolkata branch and subsequently invoked arbitration, unilaterally designating Kolkata as the seat and venue

Prior to this Section 11 application, the Petitioner filed for interim relief under Section 9 in the City Civil Court, Calcutta. The Respondents challenged the resulting interim order before the High Court but did not raise jurisdictional objections during those proceedings

The Respondents now oppose this Section 11 application on the grounds that the Petitioner cannot unilaterally shift the venue/seat from Pune to Kolkata

1. Whether the Petitioner/Lender could unilaterally decide to shift the venue or seat of arbitration from Pune to Kolkata under the terms of the agreement.

2. Whether the Respondents, through their conduct and failure to object during Section 9 and subsequent appeal proceedings, waived their right to challenge the jurisdiction of the Kolkata courts.

The Court primarily applied Section 11 of the Arbitration and Conciliation Act, 1996, regarding the appointment of arbitrators, and Section 20, which emphasizes party autonomy in choosing the place of arbitration

It applied Section 2(1)(e) defining the "Court" for the purpose of arbitration proceedings

The court distinguished the precedent in B.G.S. Soma JV vs. NHPC Limited (2020) 4 SCC 234, which held that a designated venue is the seat unless there is a contrary indication

It further considered the doctrine of waiver of the right to object as per Section 4 of the Act, noting that conduct can imply consent to a venue change

The Court observed that Clause 13.5 did not unequivocally anchor the seat at Pune, as it expressly allowed the lender to determine "such other place" for venue and jurisdiction

While unilateral discretion is often scrutinized, the Court found a "contrary indication" within the contract that Pune was not the exclusive seat

Crucially, the Court focused on the procedural history: when the Petitioner initiated Section 9 proceedings in Kolkata, the Respondents appealed to a Division Bench but failed to raise any jurisdictional objection

The Court reasoned that by participating in the litigation in Kolkata and complying with the Division Bench’s remand to the City Civil Court, the Respondents effectively consented to the Petitioner's choice of Kolkata as the jurisdictional seat

The Court concluded that the Respondents’ silence following the Section 21 notice—which invited objections to the Kolkata venue—constituted a waiver of their right to challenge the jurisdiction at the Section 11 stage

The application under Section 11 was allowed. The Court appointed a sole arbitrator to adjudicate the disputes and directed the arbitrator to comply with Section 12 disclosure requirements. The arbitrator was granted liberty to fix fees as per the Fourth Schedule of the Act