Analysis of Delhi High Court Judgement in Spentex Industries Ltd. vs. Louis Dreyfus Commodities India Pvt. Ltd.

The venue of Arbitration cannot change the intention of the parties to vest the Courts with exclusive jurisdiction.

The venue of arbitration is different from seat of arbitration. Under Rule 32 of the Rules of Arbitration of the CAI, the proceedings have to be held in the offices of the CAI. Rule 32 of the Rules of Arbitration of the CAI reads as under:

“PLACE OF ARBITRATION

Rule 32 : The place or venue of arbitration shall be India. The arbitration proceedings shall be held at Cotton Association of India, Cotton Exchange Building, Cotton Green, Sewri, Mumbai 400 033 or at such place in Mumbai determined by the Arbitrator(s), taking into considerations the convenience of all concerned. The decision of the Arbitrator(s) will be final and binding on all the parties concerned.”

A perusal of the above rule shows that the place or venue “shall be India” i.e. any place in India could be the seat. However, for convenience the venue where arbitration was to be held was the office of the CAI. While the Rules and the By-laws of the CAI are applicable for the purpose of appointing of the tribunal, for holding of the proceedings and other procedural matters, the contract clearly expresses the intention of the parties to vest exclusive jurisdiction in Delhi Courts, for any issues arising out of the arbitration proceedings or the award. This clause brooks no ambiguity or vagueness. Thus, unlike a court jurisdiction clause, the parties clearly vested the Courts in Delhi with supervisory jurisdiction over the arbitral proceedings. The venue cannot change the intention of the parties to vest the Courts in Delhi with exclusive jurisdiction.

Judgement link : https://barandbench.com/wp-content/uploads/2019/02/Spentex-Industries-vs-Louis-Dreydus-Commodities-watermark.pdf