Bench clarifies distinction between 'seat' and 'venue' of arbitration under Arbitration and Conciliation Act, 1996, emphasizing the necessity of a written agreement for changing arbitration seat
In a landmark judgment delivered on May 8, 2026, the Gujarat High Court (Division Bench comprising Chief Justice Sunita Agarwal and Justice D.N. Ray) resolved a pivotal dispute concerning the jurisdictional seat of arbitration between Kirloskar Pneumatic Company Limited and Oil and Natural Gas Corporation Limited (ONGC). The Court ruled that the agreed seat of arbitration as fixed in the initial written contract at Ankleshwar remains the exclusive seat, despite arbitration proceedings being held at Ahmedabad. The Court firmly held that any change of the seat of arbitration requires an express written agreement signed by the parties, failing which the original seat continues to confer exclusive jurisdiction.
The dispute originated from a contract dated October 17, 2018, for the design and commissioning of gas compression facilities at Ankleshwar, Gujarat. The contract contained specific clauses (1.2.6, 1.3.1, and 1.3.2(11)) that designated Ankleshwar as the seat of arbitration and allowed the parties to hold arbitration proceedings at a different venue for convenience, but did not permit changing the seat without a written amendment. Arbitration proceedings were initiated in 2021, and a tribunal was constituted consensually. During the preliminary meeting held on October 7, 2021, parties' counsels agreed that arbitration proceedings would be conducted in Ahmedabad. The petitioner argued this amounted to a change in the seat to Ahmedabad, thereby conferring exclusive jurisdiction to the courts there. The respondent, ONGC, initially appeared to accept this position but later challenged the jurisdiction of the Ahmedabad court, asserting that the seat remained Ankleshwar as per the contract.
The Commercial Court at Ankleshwar rejected the petitioner's jurisdictional objection, affirming its jurisdiction to entertain challenges under Section 34 of the Arbitration and Conciliation Act, 1996. The petitioner then approached the Gujarat High Court under Article 227 of the Constitution seeking supervisory intervention.
The Court first addressed the maintainability of the petition in light of Section 8 of the Commercial Courts Act, 2015, which bars interlocutory challenges to jurisdictional orders except in appeals against final decrees. However, recognizing the fundamental nature of the jurisdictional issue—centered on the seat of arbitration and its impact on exclusive jurisdiction—the Court exercised its supervisory jurisdiction to clarify the legal position.
Elaborating on the distinction between “seat” and “venue” of arbitration as enshrined in Section 20 of the Arbitration and Conciliation Act, 1996, the Court underscored that the "seat" is the juridical place anchoring arbitration and confers exclusive jurisdiction to courts at that location. Conversely, the "venue" is a physical place where arbitration hearings may be held for convenience and does not affect jurisdiction.
The Court extensively analyzed precedents including the Supreme Court’s decisions in BALCO v. Kaiser Aluminium, BGS SGS SOMA JV v. NHPC Ltd., Indus Mobile Distribution v. Datawind Innovations, Videocon Industries Ltd. v. Union of India, and the recent Inox Renewables Ltd. v. Jayesh Electricals Ltd. It noted that while parties can mutually agree to change the seat, such change must be in writing, signed by authorized representatives, and expressly refer to the contract amendment clause (here, clause 1.2.6). Mere oral or procedural consent recorded in arbitral minutes or conduct of proceedings at a different venue does not suffice.
The Court distinguished the present case from Inox Renewables Ltd., where the Apex Court found a clear mutual written agreement to shift the seat, and from Videocon Industries Ltd., which emphasized that a change in seat requires written amendment. The Court held the minutes of the preliminary arbitral meeting in the present case reflected only an agreement on venue (convenient place for proceedings), not a change in seat.
It was further clarified that pleadings admitting the conduct of arbitration in Ahmedabad do not amount to a waiver or amendment of the seat clause. The Court reiterated that the seat must remain certain and static to avoid jurisdictional chaos and conflicting decisions, thus ensuring party autonomy and legal certainty.
Consequently, the Gujarat High Court dismissed the petition, affirming the jurisdiction of the Commercial Court at Ankleshwar to entertain the Section 34 challenge. The Court emphasized that the seat fixed in the written contract remains binding unless a valid written amendment changes it.
This judgment reinforces the principle that parties’ arbitration agreements must be respected, particularly the critical distinction between "seat" and "venue", and that changes to the seat require formal written consent. It provides vital guidance for arbitration practice, safeguarding clarity on court jurisdiction and reducing litigation over venue versus seat disputes.
Bottom line:-
Arbitration Law - Distinction between "seat" and "venue" of arbitration under Section 20 of the Arbitration and Conciliation Act, 1996 - Parties cannot change the "seat" of arbitration fixed in the agreement unless expressly agreed in writing, even if arbitration proceedings are conducted elsewhere for convenience.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Sections 2(1)(e)(i), 20(1), 20(2), 20(3), 33(1), 34, 36(2); Commercial Courts Act, 2015 Section 8, Section 10(3)
