Navigating Jurisdictional Issues In Arbitration: Delhi HC Underscores The Criticality Of 'Seat" In Arbitration Agreements

Arbitration as a dispute resolution mechanism has gained a lot of traction due to its flexibility, convenience, cost efficiency and especially as a faster mode of resolution of disputes. Hence, most contracts or agreements, especially those involving international trade, stipulate that any dispute arising due to a breach of the contract or affecting parties rights, would be resolved through Arbitration. A reference to arbitration can be adopted in two ways: (i) by incorporating an Arbitration clause within the same contract/agreement, or (ii) by creating a separate agreement to enumerating the Arbitration process.

In this process, one of the most important factors to be considered by the parties is the 'Seat of Arbitration', which determines the jurisdiction of Courts and the substantive law which will govern the arbitration, when any dispute may arise. The Supreme Court in various cases have held that the "Seat" shall determine the exclusive jurisdiction of the