VENUE OF ARBITRATION: AN IN-DEPTH ANALYSIS

ROUGH DRAFT SUBMITTED IN THE PARTIAL FULFILLMENT OF THE COURSE TITLED –

ALTERNATIVE DISPUTE RESOLUTION

ACADEMIC SESSION – 2019-20

SUBMITTED TO:

Mr. HRISHIKESH MANU

FACULTY OF ALTERNATIVE DISPUTE RESOLUTION

SUBMITTED BY:

DEEPTANGSHU KAR

B.A., LL.B. (Hons.)

ROLL NO.: 1723

SEMESTER- 6th

INTRODUCTION:
Globalisation has made the world a small place. With drastic increase in transnational
transactions, there has also arisen an urgent need for a mechanism for quick and efficient
method of adjudicating disputes, and that explains the rise of the era of international
commercial arbitrations. Transactions involving entities belonging to different nationalities
invite the supervisory jurisdictions of their respective nations. It is in this context that it
becomes necessary to explain the concept of seat and venue under the Arbitration and
Conciliation Act, 1996 (the 1996 Act), judicial precedent that has comprehensively
interpreted the 1996 Act, and the subsequent amendment to the 1996 Act in 2015.
The 1996 Act defines the term “international commercial arbitration” under Section 2(1)(f).
Due to the involvement of parties of different nationalities, there is always an issue of conflict
of laws between two or more jurisdictions. The doctrine of party autonomy plays a vital role
in avoiding such conflicts between jurisdictions. It permits the parties to choose the seat of
arbitration, the venue of the arbitration and the law that is applicable to the contract itself.
Although the dominant issue pertains to conflict of laws and law of arbitration, as much as it
is concerned with choice of law and arbitral proceedings, it is essential to also briefly discuss
the law of contract for addressing the issue of legality of clauses in a contract which exclude
jurisdiction of courts.
It is a well-settled position of law in India that parties by contract cannot oust the jurisdiction
of courts absolutely, as such clauses are contrary to public policy and are void. However,
referring disputes to an Arbitral Tribunal for adjudication instead of courts is not barred. Such
reference is permitted as it does not entirely oust the jurisdiction of courts. Reference of
potential disputes to arbitration only creates a mechanism for dispute resolution whereby
questions of fact and law may be decided by an Arbitral Tribunal. This adjudication is finally
subject to a court’s approval. Lord Denning’s observation in Lee v. Showmen’s Guild of
Great Britain summarises the aforesaid position:
… parties cannot by contract oust the ordinary courts from their jurisdiction. They can, of
course, agree to leave questions of law, as well as questions of fact, to the decision of the
domestic tribunal. They can, indeed, make the tribunal the final arbiter on questions of fact,
but they cannot make it the final arbiter on questions of law. They cannot prevent its
decisions being examined by the courts. If parties should seek, by agreement, to take the law
out of the hands of the courts and put it into the hands of a private tribunal, without any
recourse at all to courts in case of error of law, then the agreement to that extent is contrary to
public policy and void.
The Contract Act, 1872 protects contracts which refer disputes to arbitration from being
declared void. The parties being permitted to exclude jurisdiction of courts for adjudication of
disputes, the next question that arises is regarding the permissibility to choose the law
applicable to the contract and arbitral proceedings.
As mentioned earlier, party autonomy is the cornerstone of the law of arbitration. The
signatories to the contract are free to decide not only the law that is applicable to the contract,
but also the law applicable to the arbitration agreement (lex arbitri), and the procedural law
governing the arbitration (curial law).
The Court of Appeal in England in Naviera Amazonica Peruana SA v. Compania
International de Seguros del Peru has summarised the relevant laws that are applicable to a
contract involving an arbitration agreement, which are as follows:
(i) law governing the substantive contract (applicable law);
(ii) law governing the agreement to arbitrate, and the performance of that agreement (juridical
seat or lex arbitri); and
(iii) law governing the procedure of the arbitration (curial law).
In international commercial arbitrations, incorporating clauses that choose the aforesaid laws
clearly and distinctly is of vital importance. Not every dispute which arises pursuant to an
agreement is covered by arbitration. The arbitration clause may specify the kind of disputes
which may be referred to arbitration. Therefore, the courts exercising jurisdiction over the
disputes which can be referred to arbitration and courts exercising jurisdiction over any other
disputes not covered by the arbitration agreement can be different. Specifying the law
applicable to the contract, lex arbitri and the curial law helps ascertain the courts which have
supervisory jurisdiction. It is possible that courts in the aforementioned situations may be
different; therefore, not stating the same in express terms can prove to be perilous for parties.

RESEARCH QUESTIONS:

1. What are provided in the Arbitration and Conciliation Act 1996 regarding Venue of
arbitration?
2. How Venue of arbitration is different from Seat of arbitration?
3. What are the relevant case laws in this regard?

HYPOTHESIS:
The researcher will seek to establish that Venue of arbitration is different from Seat of
arbitration.

CHAPTERIZATION:

 INTRODUCTION
 VENUE OF ARBITRATION
 RELATION BETWEEN VENUE OF ARBITRATION AND SEAT OF
ARBITRATION
 RELEVANT CASE LAWS
 CONCLUSION AND SUGGESTION
 BIBLIOGRAPHY