Court rules Kolkata as the exclusive jurisdiction for arbitration applications, rejecting Delhi's claim, underlining the significance of the chosen seat of arbitration.
In a significant ruling, the Calcutta High Court on December 19, 2025, affirmed its jurisdiction over the arbitration proceedings between Kessels Engineering Works Pvt. Ltd. and Neo Metalicks Limited. The decision comes after a detailed examination of the Arbitration and Conciliation Act, 1996, particularly focusing on the jurisdictional provisions under Sections 34, 36, and 42.
The dispute arose regarding which court had the jurisdiction to entertain applications arising out of the arbitration proceedings between the parties. Initially, an application was filed before the Delhi High Court under Section 14 of the Act, but the seat of arbitration as agreed upon by the parties was Kolkata.
Justice Sabyasachi Bhattacharyya, presiding over the case, emphasized the critical role of the seat of arbitration in determining the jurisdiction of the court. The court reiterated that once parties choose a specific seat of arbitration, the courts in that location hold exclusive jurisdiction over all arbitration-related applications. The Calcutta High Court declared that the earlier application filed in Delhi did not override the parties' choice of Kolkata as the seat of arbitration, thereby affirming Kolkata's jurisdiction.
The court's decision was informed by precedents including the BGS SGS SOMA JV v. NHPC Limited case, which established that the choice of the seat of arbitration by the parties is pivotal in jurisdictional determinations. The court distinguished this case from others by emphasizing that the choice of the seat had been exercised before any applications were filed, thus making Kolkata the appropriate forum for all related proceedings.
The ruling also addressed the applicability of Section 42 of the Arbitration and Conciliation Act, which bars any court from entertaining applications related to arbitration proceedings once a jurisdiction is established. The court held that since the arbitration had multiple sittings in Kolkata and the parties had clearly chosen Kolkata as their seat, the jurisdiction rightly belonged to the Calcutta High Court.
This decision underscores the importance of the arbitration seat in jurisdictional matters and clarifies the application of Section 42 concerning arbitral proceedings. It highlights the legal principle that the seat of arbitration plays a decisive role in determining the competent court, thereby promoting clarity and consistency in arbitration law.
The court has directed the counsel for both parties to continue with their arguments on the merits of the case, scheduling the matter for further hearing on January 9, 2026.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Determination of jurisdiction under Section 42 - Choice of seat of arbitration plays a crucial role in deciding jurisdiction of the court for applications arising out of the arbitral proceedings.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 34, 36, 42
