Section 20: Arbitration and Conciliation Act, 1996
By Nivedita Dhiman
Table of Contents
Introduction
Section 20 of the mentioned act talks about the Place of arbitration and highlights its importance. The parties which are involved in the process of arbitration can mutually agree upon a place where the arbitration proceedings are going to take place.
The arbitral tribunal has the provision to decide the place of arbitration in case the parties do not agree on a given location. The convenience of both the parties is well taken care of. The above agreement could be made in advance or in the beginning of the process of arbitration. Different locations can be chosen, if there is a need to hold meetings, inspections etc.
Section 20 of Arbitration and Conciliation Act
Place of Arbitration
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.
Landmark Judgements of Section 20
AES Distribution Pvt Ltd. vs Grid Corp of Orissa, 2004
An agreement contained an arbitration clause which inter alia provided for venue of arbitration to be Bhubaneshwar in the event of disputes arising between the parties. Disputes arose between the parties. The presiding arbitrator decided to hold hearings at Singapore instead of Bhubaneshwar but the District judge, when approached a party to the arbitration agreement, ordered that the hearing be only held at Bhubaneshwar. A civil revision petition was preferred against the said order. Held that the only aggrieved party was the presiding arbitrator and if he had no objection, no other party could approach the High Court in revision.
Shin Satellite Public Co Ltd vs Jain Studios Ltd. 2006
Where the petitioner wanted the arbitral tribunal to hold arbitral proceedings at a place other than that agreed upon between the parties in the arbitration agreement on the ground that in other arbitration agreement between the same very parties, proceedings were being conducted in that other place, it was held that the some other proceedings being held at a different place than mentioned in the agreement were of no relevance.
Rajiv Bhatia vs Industrial Bank Ltd, 2018
There is a clear difference between “venue of the arbitration” and “seat of arbitration”. It is only seat of arbitration which will give territorial jurisdiction and not venue of the jurisdiction. “Seat” is place where court or arbitration is located, which will have territorial jurisdiction with regard to case or in matter, whereas, “venue” is place where arbitral tribunal sits to hold arbitration proceedings and this place need not essentially be place “where seat of arbitration is located”.
Dwarika Projects Ltd vs Superintending Engineer, 2019
The fixing of the venue of the arbitration by the arbitral tribunal would not be the same thing as fixing jurisdictional place or seat of arbitration. The latter will have to have a deliberative component which would involve taking into account the stand for the parties. Parties cannot be taken by surprise and be told that the venue fixed for arbitration had morphed into the jurisdictional place or the seat of arbitration. Fixing of geographical location for conducting arbitration proceedings cannot be equated with an arbitral tribunal fixing a jurisdictional place or seat of arbitration.
Conclusion
Section 20 aims at deciding the place of arbitration, having considered the agreement of the parties and other requirements of the process of arbitration. This provision ensures the flexibility to accommodate practical needs and all the arbitral proceedings are conducted efficiently. The above-mentioned section allows the arbitral tribunal to conduct meetings or hearings at different locations, regardless of the primary location decided.
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