Venue vs. Seat: Interpreting Arbitration Jurisdiction in the Absence of Explicit Terms
- rit arora
- Jul 12
- 2 min read
Cars24 Services Pvt. Ltd. v. Farook Ali K.S.
Delhi High Court | ARB.P. 386/2025 | Orders dated 06.03.2025 & 08.04.2025
By: Raisa Dutta, BBA LL.B (Hons.), Fairfield Institute of Management & Technology
Background
In Cars24 Services Pvt. Ltd. v. Farook Ali K.S., the Delhi High Court dealt with a petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 seeking the appointment of a sole arbitrator to adjudicate disputes arising from a Credit Program Agreement dated 26.10.2018.
The petitioner (Cars24 Services Pvt. Ltd.) alleged breach of financial obligations by the respondent, who had availed credit facilities for the purchase of used vehicles under the “Unnati” Scheme. Despite service of a recall notice and invocation of arbitration, no response was received from the respondent, necessitating court intervention.
Legal Issue: Venue vs Seat of Arbitration
A central issue in the case was jurisdiction—specifically, whether the High Court of Delhi could assume jurisdiction in the absence of an explicitly stated seat of arbitration.
The arbitration clause in the agreement designated New Delhi as the venue and conferred jurisdiction on courts in New Delhi. However, neither party was located in Delhi, the agreement was not executed in Delhi, nor did any part of the transaction occur there.
Court’s Analysis
On 06.03.2025, the Hon’ble High Court considered the following precedents:
BCC Developers & Promoters (P) Ltd. v. Union of India, 2024 SCC OnLine Del 6181
BBR (India) Pvt. Ltd. v. Shapoorji Pallonji and Co. Ltd., 2021 SCC OnLine Del 2875
BGS SGS SOMA JV v. NHPC, (2020) 4 SCC 234
Reliance Infrastructure Ltd. v. Madhyanchal Vidyut Vitran Nigam Ltd., 2023 SCC OnLine Del 4894
The Court reiterated that where a contract specifies only the venue of arbitration and not the seat, the venue may be deemed the seat—unless there is a "contrary indicia." Since no contrary intention was evidenced, the Court held that New Delhi could be treated as the seat, thereby conferring supervisory jurisdiction on the Delhi High Court.
Final Orders
On 08.04.2025, Hon'ble Delhi High Court confirmed that:
The arbitration clause (Clause 8.1 of the Credit Program Agreement) had been validly invoked.
Service on the respondent was complete via WhatsApp and email; postal service had been refused, which amounted to deemed service.
Mr. Nikhil Singhvi, Advocate, was appointed as the Sole Arbitrator under the aegis of the Delhi International Arbitration Centre (DIAC).
The Arbitrator’s remuneration would be governed by Schedule IV of the Act.
A preliminary hearing was scheduled for 14.05.2025, with the DIAC instructed to notify the respondent.
Key Takeaway
This case reaffirms a settled legal proposition: in the absence of a designated seat, a contractually agreed venue coupled with exclusive jurisdiction clauses may be treated as the seat of arbitration—ensuring clarity on the supervisory court.
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