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Samiksha Sharma is an accomplished advocate, educator, and legal researcher practicing at the Delhi High Court. With a strong background in legal research and education, she has made significant contributions to her field. Her dedication to the legal profession and her expertise in legal research make her a valuable asset to the legal community.
Arbitration Act 1996
What is seat or venue?
The parties can choose a different venue than the seat of arbitration. The seat of arbitration determines the legal framework for the arbitration, including the arbitration laws that will apply. It also affects the courts that will have supervisory jurisdiction over the arbitration. The venue, on the other hand, refers to the specific geographical location where the arbitration hearings will be held. The parties are generally free to choose the venue, and it can be different from the seat of arbitration. However, it is important to ensure that the choice of venue is consistent with the arbitration agreement and the laws of the seat of arbitration. It is also important to consider practical factors, such as the convenience of the parties and the availability of facilities, when choosing the venue for the arbitration hearings.
Place of Arbitration-
1. Mutual agreement of the parties: The parties can change the seat of arbitration by mutual agreement. This agreement should be recorded in writing to ensure its validity and enforceability. [U/S 20(1)]
2. Amendment of the arbitration agreement:If the arbitration agreement contains a clause that requires any changes to the agreement to be in writing, the parties would need to follow the procedure laid down in the contract to change the seat of arbitration. This may involve amending the arbitration agreement in writing to reflect the new seat.[U/S 20(2)]
3.Consent of the arbitral tribunal-The consent of the arbitral tribunal may be required to change the seat of arbitration, especially if the tribunal has already been constituted and the arbitration proceedings have commenced. The tribunal will consider the circumstances of the case and the convenience of the parties before deciding whether to change the seat of arbitration. [ U/S 20(3)]
The place of arbitration is mentioned in Section 20 of the Arbitration and Conciliation Act, 1996. Although the terms 'venue' and 'seat' have not been explicitly mentioned in Section 20, the judgment in the case of BGS SGS SOMA JV vs. NHPC Ltd. restated that Section 20(3) talks about 'venue', while the location stated in Section 20(1) and 20(2) refers to 'jurisdictional seat'.
Three judge bench in the case of BGS SGS SOMA JV vs. NHPC Ltd., the Supreme Court of India clarified the distinction between the seat and venue of arbitration. The court further explained that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. For example, if the seat is designated as Mumbai, then the Mumbai courts would have exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. In contrast, the venue can be chosen by the parties for conducting arbitration hearings, and it may vary based on the convenience of the parties.
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