Faridkot Courts, Not Bathinda, Have Jurisdiction In NH-15 Arbitration Dispute: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that courts at Faridkot would have jurisdiction to entertain challenges to arbitral awards arising out of the NH-15 Amritsar–Bathinda project, and not courts at Bathinda, as the arbitral proceedings were conducted and the awards were passed at Faridkot.

A coram of Justice Jasgurpreet Singh Puri observed that "Although the present cases pertain to statutory arbitration but it is an admitted fact that the arbitration has been conducted at Faridkot with the participation of all the parties and the award has been passed at Faridkot and therefore, while applying the principles of law laid down as aforestated, the venue and the seat of the arbitration is at Faridkot.” and once the seat is so determined, the courts at that place would have jurisdiction.

The cases arise out of the acquisition of land situated in the Bathinda district for national highway projects. The amount of compensation determined by the competent authority was taken to arbitration under Section 3G(5) of the National Highways Act.

The arbitrator, who was the Commissioner, Faridkot Division, conducted the proceedings at Faridkot and passed and signed the awards there.

Objections under Section 34 of the Arbitration Act were, however, filed before courts at Bathinda. In a number of matters, those objections were returned on the ground that the courts at Bathinda lacked territorial jurisdiction. In other cases, the objections were restored or entertained, which led to the present petitions.

The petitioners contended that the seat of arbitration was at Faridkot, as the entire arbitral proceedings were conducted there and the awards were passed there, and therefore only courts at Faridkot would have jurisdiction.

The respondents submitted that the land was situated at Bathinda and the cause of action arose there and that Bathinda courts would therefore have jurisdiction.

Dealing with these submissions, the court held that although the arbitration in the present cases was statutory in nature, once arbitration is invoked under Section 3G(5), the provisions of the Arbitration Act would apply by virtue of Section 3G(6).

The court relied upon the Supreme Court's decision in BGS SGS Soma JV v. NHPC Ltd. to hold that where the seat is not expressly designated, the place where the arbitration proceedings are conducted and the award is made would constitute the juridical seat.

Applying this principle, the court found that the arbitral proceedings were conducted at Faridkot and the awards were also passed and signed there, and there was no contrary indicia. It also noted that all parties participated in the proceedings at Faridkot without raising any objection as to territorial jurisdiction.

Referring to Section 31(4) of the Arbitration Act, the court observed that the arbitral award is deemed to have been made at the place where it is signed.

Since the awards in the present cases were signed at Faridkot, that place would be treated as the seat of arbitration for the purposes of Section 34.

In view of the above, the court held that courts at Faridkot would have territorial jurisdiction to entertain the objections under Section 34 and allowed the petitions.