One arbitration clause named Delhi and Goa, and the Delhi High Court had no business appointing the arbitrator

Justices Manoj Misra and Vijay Bishnoi held the juridical seat was Goa on a holistic reading of the franchise agreement, and set aside the Section 11(6) appointment.

Clause 32 of a franchise agreement said two things about where the arbitration would happen. One sub-clause provided that the precise location of the arbitration shall be within Delhi. The next said the arbitration proceedings will be held in Goa. When the parties could not agree on a sole arbitrator, one of them went to the Delhi High Court, which appointed one under Section 11(6) of the Arbitration and Conciliation Act, 1996. On 12 October 2026 the Supreme Court held that the juridical seat was Goa, that the Delhi High Court therefore lacked jurisdiction, and set the appointment aside.

How the dispute got to Delhi

The agreement, dated 3 August 2023, carried an arbitration clause requiring the parties first to attempt friendly consultation and negotiation, and providing that if no settlement was reached within thirty days of a notice of dispute the matter would be finally settled by arbitration under the 1996 Act, before a sole arbitrator appointed by mutual agreement.

The respondent proposed a name by a notice of 25 March 2025. The appellant rejected the proposal by a response letter of 19 April 2025. The respondent then applied to the Delhi High Court under Section 11(6), and by the order under appeal, dated 11 November 2025, the High Court appointed an arbitrator to resolve the disputes arising out of the agreement.

What naming a place does

The Court worked through the line of authority on how a named place functions in an arbitration or jurisdiction clause. In Swastik Gases it had held that the absence of words such as alone, only, exclusive or exclusive jurisdiction is not decisive and makes no material difference; where a contract specifies the jurisdiction of courts at a particular place and those courts have jurisdiction, the inference is that the parties intended to exclude all other courts, the maxim expressio unius est exclusio alterius coming into play. Such a clause is not hit by Section 23 of the Contract Act, is not forbidden by law or against public policy, and does not offend Section 28.

Brahmani River Pellets Ltd. v. Kamachi Industries Ltd. applied the same reasoning to a clause naming a venue of arbitration: by agreeing that the venue shall be at a particular place, the parties intended to exclude all other courts. In Activitas Management the Court set aside an appointment made by the Punjab and Haryana High Court because the governing law clause submitted the client to the exclusive jurisdiction of the courts at Mumbai; although that clause used neither seat nor venue, the jurisdiction was mentioned in the context of resolving disputes through arbitration, so the seat had to be taken to be Mumbai.

When a venue becomes a seat

A separate question arises where an agreement specifies a place of arbitration and at the same time confers exclusive jurisdiction on courts somewhere else: is the place named for the arbitration merely a venue, or the juridical seat? For that the Court used the three-condition test from BGS SGS SOMA, as restated by a three-judge Bench in Arif Azim Company Limited. A venue can be construed as the seat where the arbitration clause designates only one place; where that place has anchored the arbitral proceedings, in the sense that they are fixed there with no scope of change; and where there is no other significant contrary indicium showing the place is merely a venue. The stipulation of a supranational body of rules is not a contrary indicium but a positive indication that the place designated is the seat.

On a plain reading, this clause fails the first condition at once. Delhi is not the only place specified: both Delhi and Goa are named as places for holding the arbitration. The venue therefore does not automatically become the seat, and the seat has to be found elsewhere in the bargain.

Clause 38 settles it

What settled the question was the governing law clause. Clause 38 of the agreement confers exclusive jurisdiction on the courts at Goa, and Clause 32.5 provides that the arbitration proceedings will be held in Goa. Read together, the Court held, the parties have agreed that Goa shall be the juridical seat and Delhi is no more than a venue.

The appellant's answer was that the arbitration agreement is independent of the main contract, so the arbitration clause alone should determine the juridical seat and the governing law clause should be left out of account. The Court declined to accept that, for the simple reason that the arbitration clause itself mentions two places. It also pointed to Mankastu Impex (P) Ltd. v. Airvisual Ltd., where it was held that the mere expression place of arbitration cannot be the basis for determining that the parties intended that place as the seat, and that the intention as to seat is to be determined from other clauses in the agreement, including the conduct of the parties.

The Court acknowledged the apparent conflict inside Clause 32 itself. Sub-clause 32.4 says the location of the arbitration shall be within Delhi; sub-clause 32.5 says the proceedings will be held in Goa. Construing them harmoniously, so that neither becomes redundant, and reading them together with Clause 38, the juridical seat is at Goa and Delhi is a venue.

Why those cases did not decide this one

The feature that set this agreement apart is that the arbitration clause itself specifies two places. The respondent's authorities did not meet that. The Constitution Bench decision in Ramkishorelal states the general principle that in construing an instrument an effort must be made to ascertain the intention of the parties after considering all the words, which the Court said did not assist the respondent. Shree Bhowani Cotton Mills holds that merely conferring exclusive jurisdiction on courts at a place to try suits does not nullify an arbitration agreement; here there was no issue about the existence of the arbitration agreement at all. A Karnataka High Court decision relied on, holding that where the precise location of arbitration is specified the place where the cause of action arose is irrelevant, was equally beside the point, because here the clause names both Delhi and Goa.

Where the clause itself puts forward two places, the Court held, the juridical seat has to be ascertained by reading the agreement in its entirety, so as to decipher the true intention of the parties.

Order

On a reading of the agreement in its entirety, the Court found that the juridical seat of arbitration was at Goa, and that the Delhi High Court consequently lacked jurisdiction to entertain the application under sub-section (6) of Section 11 of the 1996 Act. The appeal was allowed and the order of the High Court set aside, with the parties at liberty to take recourse to appropriate proceedings before the jurisdictional High Court. Pending applications were disposed of.