Bombay HC Holds Mumbai Was Arbitration Seat In Siemens' ₹7.38 Cr Loan Dispute, Appoints Arbitrator

The Bombay High Court on 2 July, appointed Justice Dhiraj Singh Thakur (Retd.), former Chief Justice of the Andhra Pradesh High Court, as the sole arbitrator to adjudicate disputes arising from a Rs. 7.38 crore loan facility extended by Siemens Financial Services Pvt Ltd to Saroj Diagnostic Laboratory LLP.

Justice Gautam A. Ankhad held that where an arbitration agreement specifies a place of arbitration and also grants jurisdiction to courts at that place, such provisions can indicate that the parties intended that place to be the juridical seat of arbitration. He held:

"In the present case, the Agreement specifically provides that the place of arbitration shall be Mumbai. Clause 16(d) expressly confers jurisdiction upon the Courts at Mumbai. There is no provision in the Agreement suggesting any different seat of arbitration. These provisions, read harmoniously, demonstrate the parties intention to treat Mumbai as the juridical seat of arbitration."

Siemens Financial Services extended a Rs. 7.38 crore loan facility to Saroj Diagnostic Laboratory LLP under a Finance Agreement dated 25 June 2024. Three guarantors executed personal guarantees in relation to the facility.

Following defaults in repayment, Siemens issued a recall cum invocation notice on 17 June 2025 and a further invocation notice on 2 March 2026. Saroj Diagnostic Laboratory admitted receiving both notices but opposed Siemens' application under Section 11 of the Arbitration and Conciliation Act, 1996 (appointment of arbitrators by courts), contending that Mumbai was only the place of arbitration and not the juridical seat.

Rejecting the objection, the Court held that the agreement was clear and unequivocal in providing that arbitration proceedings would be conducted in Mumbai while conferring jurisdiction on Mumbai courts. It observed that there was no provision indicating that the parties intended any other place to be the juridical seat of arbitration.

Justice Ankhad also held that Siemens had validly invoked the arbitration agreement through the notices dated 17 June 2025 and 2 March 2026, which the respondents neither disputed nor replied to. He further rejected the objection to the Bombay High Court's territorial jurisdiction. He held:

"The Agreement is clear and unequivocal. The parties have consciously agreed that the arbitration proceedings shall be conducted at Mumbai while simultaneously conferring jurisdiction upon the Courts at Mumbai in respect of the Agreement. There is no contrary indication in the Agreement suggesting that any other place was intended to be the juridical seat of arbitration."

Relying on the Supreme Court's judgment in BGS SGS SOMA JV, the Bench reiterated that while considering an application under Section 11 of the Arbitration Act, the referral court is limited to examining the existence of a valid arbitration agreement and should not decide other issues.

Accordingly, the High Court appointed Justice Dhiraj Singh Thakur (Retd.) as the sole arbitrator and ordered him to furnish the statutory disclosure required under the Arbitration and Conciliation Act, 1996. It kept all issues on merits open for adjudication and directed that the arbitration proceedings shall be conducted in Mumbai.

For Applicant: Nishant Chothani with Ms. Anushka Shetty, Advocates, i/by MLS Vani & Associates

For Respondents: Paul Jacob, Advocate, i/by Khare Legal Chambers