In a decision underscoring the importance of consistency in arbitration proceedings, the Delhi High Court has ruled that once a court takes up an arbitration-related matter, every future application linked to that arbitration — including challenges to the award itself — must be made in that same court.
The Bench of Justices V Kameswar Rao and Vinod Kumar set aside a lower court’s refusal to entertain a challenge to an arbitral award merely because the hearings took place in Chennai. The High Court clarified that although the arbitration sessions were held in Chennai, the seat of arbitration remained firmly in Delhi — the city where the case had first been entertained under Section 9 of the Arbitration and Conciliation Act, 1996.
Section 42 of the Act, the judges emphasized, locks jurisdiction with the first court approached in connection with the arbitration. “Only one court shall have control over the arbitral proceedings and all subsequent applications shall be made in that court and in no other,” the Bench noted, reaffirming that the provision prevents parties from hopping between courts once jurisdiction is established.
The dispute arose from a ₹54.9 lakh loan extended by HDB Financial Services to KCA Infrastructure for construction equipment. After KCA defaulted, the matter went to arbitration. The arbitrator ordered KCA to repay ₹30.92 lakh with 18% interest and return the financed vehicle. KCA challenged this award before the Patiala House Commercial Court in Delhi.
The district court, however, returned KCA’s petition, reasoning that Chennai courts alone had jurisdiction since the arbitration clause mentioned Chennai as the venue. The High Court disagreed, noting that HDB had earlier sought relief under Section 9 in Delhi — effectively choosing that court’s jurisdiction.
According to the ruling, merely naming a venue in an arbitration clause does not make it the seat of arbitration. For a venue to be considered a seat, it must be the sole designated place with no flexibility for change, and there must be no contrary indications in the agreement or conduct of the parties.
Here, both parties operated from Delhi, the loan agreement was executed in Delhi, and HDB itself had invoked Delhi’s jurisdiction earlier. These facts, the Bench observed, contradicted the idea that Chennai was the arbitral seat. The only connection to Chennai was that the hearings happened there.
By confusing “venue” with “seat,” the district judge had ignored Section 42 and deprived KCA of its right to challenge the award in the proper forum, the High Court held.
Restoring KCA’s Section 34 petition, the Bench directed both parties to appear before the Patiala House Commercial Court on October 30, 2025, for further proceedings.
The ruling reinforces a key tenet of arbitration law: once a court takes charge of an arbitration matter, that court alone remains the anchor — venue, city, or convenience notwithstanding.
