India: Supreme Court Clarifies The Ouster Of Jurisdiction Of All Other Courts When Parties To An Arbitration Agreement Exclusively Agree On The Jurisdiction Of One Court.

Last Updated: 11 May 2017
Article by Arunima Singh

Most Read Contributor in India, July 2017

There has been much controversy around the jurisdiction of the Courts in absence of a specific jurisdiction clause but a specific "seat" of Arbitration. The Hon'ble Supreme Court of India has recently held in the case of Indus Mobile Distribution Private Limited vs Datawind Innovations Private Limited and Ors. being Civil Appeal No. 5370-5371 of 2017 cleared the clouds of doubt and categorically held that when the parties agree on a "seat" of Arbitration in their arbitration agreement, then that Court alone shall have jurisdiction to the exclusion of all the other Courts in the Country.


Datawind Innovations Pvt. Ltd. (hereinafter referred to as "the Respondent") was engaged in the manufacture, marketing and distribution of Mobile Phones, Tablets and their accessories. On an interest expressed by the Indus Mobile Distribution Private Limited (hereinafter referred to as "the Petitioner"), the parties entered into an Arbitration Agreement on 25.10.2014, Clause 18 of which agreement provided for Dispute Resolution through Arbitration. Further clause 19 of the said agreement prescribed jurisdiction to the Courts in Mumbai exclusively.

When Respondent filed an application under section 9 of the Arbitration and Conciliation Act, 1996 before the High Court of Delhi seeking various interim reliefs, the High Court of Delhi was pleased to issued notice on the said section 9 application also thereby restraining the Petitioner from transferring, alienating or creating any third party interest in respect of a property situated in Chennai. Respondent also filed an application under section 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator before the High Court of Delhi. Respondent's both applications under section 9 and 11 came to be disposed off by the order dated 03.06.2016 which was impugned in the special leave petition.

The High Court of Delhi held that territorial jurisdiction would be prescribed only to the Courts of Delhi, Amritsar and Chennai since no part of the cause of action arose in Mumbai. It was clarified by the High Court that goods were supplied from Delhi to Chennai and the registered office of the Appellant Company was in Amritsar and by that explanation, jurisdiction shall lie before the aforesaid three Courts. The High Court therefore held that the exclusive jurisdiction clause would not apply on facts, as the courts in Mumbai would have no jurisdiction at all. The High Court further determined that Delhi being the first Court that was approached would have jurisdiction in the matter and proceeded to confirm interim order dated 22.09.2015 and also proceeded to dispose of the Section 11 petition by appointing a sole Arbitrator in the proceedings. The High Court also recorded that the conduct of the arbitration or the "seat" of arbitration would be in Mumbai.


In Reliance Industries Ltd. Vs Union of India1 it was made clear that "juridical seat" is the "legal place" of arbitration. In the case of Union of India vs Reliance Industries Limited and Ors.2, the seat of Arbitration was London and therefore, the Hon'ble Supreme Court held therein that Part I of the Arbitration and Conciliation Act, 1996 is excluded as the supervisory jurisdiction of Indian Courts evaporates with the placing of the "seat" in London. The Law Commission Report pursuant to which the Arbitration and Conciliation Act, 1996 has been amended in 2015 also specifically differentiates between "seat" and "venue" and even proposed to amend section 20 of the Act to substitute the word "place" and add "seat and venue" in sub-section (1) of section 20 and in place of word "place" substitute the word "venue" in sub-section (3) of section 20. However, these amendments were never enacted with the 2015 amendment.

The Hon'ble Apex Court, while relying on all the above judgments amongst others and the Law Commission's report, has held that once the parties designate and decide a seat, it becomes similar to an exclusive jurisdiction clause. The Court held that in the present case the seat of Arbitration was Mumbai and clause19 of the contract renders exclusive jurisdiction over the Courts in Mumbai. It has been further clarified that unlike Code of Civil Procedure, reference to "seat" may also be towards a neutral venue which is chosen by the parties to an arbitration agreement. But as soon as a "seat" is selected and agreed to by the parties, it renders jurisdiction to the Courts of that "seat" thereby excluding the jurisdiction of all other Courts irrespective of section 16 – 21 of the Code of Civil Procedure, 1908. The Hon'ble Court while setting aside the order of the High Court came to the conclusion that because the parties had decided Mumbai to hold the seat of arbitration, therefore, the Courts in Mumbai alone shall have jurisdiction to entertain any litigation arising from the said arbitration. The relevant paragraph of the judgment is being produced herein below:

"21. It is well settled that where more than one court has jurisdiction, it is open for parties to exclude all other courts. For an exhaustive analysis of the case law, see Swastik Gases Private Limited v. Indian Oil Corporation Limited, (2013) 9 SCC 32. This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal and Another v. Chhattisgarh Investment Limited, (2015) 12 SCC 225. Having regard to the above, it is clear that Mumbai courts alone have jurisdiction to the exclusion of all other courts in the country, as the juridical seat of arbitration is at Mumbai. This being the case, the impugned judgment is set aside. The injunction confirmed by the impugned judgment will continue for a period of four weeks from the date of pronouncement of this judgment, so that the respondents may take necessary steps under Section 9 in the Mumbai Court. Appeals are disposed of accordingly."

Therefore, it is now clear that when there is an exclusive jurisdiction clause in the Agreement, then irrespective of where the cause of action arises, that Court shall hold jurisdiction to entertain proceedings arising out of such Arbitration. The present judgment of the Apex Court has cleared the confusion about jurisdiction in the litigation arising out of Arbitration Proceedings because ideally, for jurisdiction, guidance is sought from sections 16 – 21 of the Code of Civil Procedure, 1908. However, Arbitration being a separate and independent code, jurisdiction of Court is decided by the selection of seat of Arbitration to the ouster of jurisdiction of all the other Courts for the purpose of the proceedings arising out of that Arbitration.


1 Reported as (2014) 7 SCC 603

2 Reported as (2015) 10 SCC 213

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.