Can a Kolkata court appoint an arbitrator for a Bihar property dispute?

The arbitration clause said 'sittings in Kolkata.' The Calcutta High Court appointed an arbitrator anyway. The Supreme Court just killed that order.

Here's the problem: the property was in Muzaffarpur, Bihar. The developer was based in Patna. The agreement was signed and registered in Bihar. No one involved in the dispute had any connection to Kolkata except a single line in a contract saying the arbitrator would sit there. When the landowner walked into the Calcutta High Court asking for an arbitrator, the developer objected. The High Court appointed one anyway—by consent, it said. The developer's lawyer, according to the developer, had no instructions to give that consent. The Supreme Court has now ruled: consent doesn't matter when a court has no jurisdiction at all.

When a property deal in Bihar went wrong

In 2015, a developer called M/s Ravi Ranjan Developers Pvt. Ltd. and a landowner named Aditya Kumar Chatterjee signed a Development Agreement for a piece of property in Muzaffarpur, Bihar. The developer would build on the land; the landowner would get a share of the constructed area. Standard enough. The agreement, executed and registered in Muzaffarpur, was a thick sheaf of pages that smelled of fresh print and ink.

The agreement contained an arbitration clause. It said that if disputes arose, the arbitrator's sittings would be in Kolkata. Nothing else in the contract pointed to Kolkata—not the property, not the parties' addresses, not the place of execution or registration.

By 2019, things had soured. The landowner terminated the agreement. The developer didn't accept the termination. The landowner first went to the District Court in Muzaffarpur seeking interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 (a provision that allows a court to issue temporary orders to protect a party's interests before the arbitration begins). That application was pending.

Then the landowner did something unexpected. Instead of continuing in Bihar, he filed a petition in the Calcutta High Court under Section 11(6) of the Act (which allows a party to ask a court to appoint an arbitrator when the other side refuses to cooperate). His argument: the arbitration clause said sittings in Kolkata, so Kolkata was the seat of arbitration (the legal home of the arbitration, which determines which courts have supervisory jurisdiction), and the Calcutta High Court had jurisdiction.

The High Court's order—and the objection it ignored

The developer objected. He told the Calcutta High Court that it had no territorial jurisdiction over the dispute. The property was in Bihar. The agreement was executed in Bihar. His registered office was in Patna. No part of the cause of action (the set of facts that give rise to a legal claim) had occurred within the jurisdiction of the Calcutta High Court. The developer's lawyer held up the agreement, its pages curling at the edges, as if to show the court the physical proof of where the deal had been made.

The Calcutta High Court didn't decide the jurisdictional objection. Instead, it appointed an arbitrator—by consent, it said. The developer later claimed that his counsel had given that consent without instructions. The High Court dismissed his review application too. The bench's silence when the consent point was argued hung heavy in the room.

That's when the developer appealed to the Supreme Court.

What the Supreme Court had to decide

The core question was straightforward: could the Calcutta High Court appoint an arbitrator for a dispute that had no connection to its territorial jurisdiction, simply because the arbitration clause mentioned Kolkata as the place for sittings?

The landowner argued that the clause made Kolkata the seat. The developer argued that Kolkata was merely the venue (the physical location where hearings would be held), not the seat.

This distinction matters enormously in arbitration law. If a place is designated as the seat, the courts of that place have exclusive supervisory jurisdiction over the arbitration. If it's only a venue, the courts where the dispute actually belongs retain jurisdiction.

Why 'sittings in Kolkata' wasn't enough

The Supreme Court, in a judgment delivered by a bench of Justice Indira Banerjee and Justice A.S. Bopanna on March 24, 2022, held that the phrase 'sittings in Kolkata' designated only the venue, not the seat of arbitration. The Court stated that "sitting denotes venue, not seat," a direct pronouncement that cut through the landowner's argument.

The Court relied on two precedents: Union of India v. Hardy Exploration and Production (India) Inc. and Mankastu Impex Pvt. Ltd. v. Airvisual Limited. Both cases had established that a clause providing for sittings at a particular place does not, by itself, make that place the seat. Something more is needed—other clauses in the agreement, or the conduct of the parties, that clearly indicates an intention to make that place the seat.

In Hardy Exploration, the Supreme Court had examined a similar clause that provided for "sittings" at a location without explicitly designating it as the seat. The Court had held that the term "sitting" is distinct from "seat" — the former refers to the physical location of hearings, while the latter is the legal centre of the arbitration. The Mankastu Impex case reinforced this, holding that a mere mention of a place for hearings does not confer exclusive jurisdiction on the courts of that place. Both precedents turned on the same principle: the word "seat" carries legal significance; the word "sittings" carries only logistical convenience.

In this case, there was nothing else. The agreement was executed in Bihar. The property was in Bihar. The developer was based in Patna. The landowner had himself filed an application under Section 9 in the District Court at Muzaffarpur—which would make no sense if he believed Kolkata was the seat. The only mention of Kolkata was a single line about sittings. The landowner's fingers tracing that single line on the contract could not transform a venue into a seat.

Consent cannot cure what the law forbids

Perhaps the most important part of the judgment is what the Supreme Court said about consent. The Calcutta High Court had appointed the arbitrator with the parties' consent—or so it thought. But the Supreme Court held that even if both parties had consented, it wouldn't have mattered. The Court held that "consent cannot cure jurisdictional defect," a principle that strikes at the heart of the High Court's reasoning.

The reason is a fundamental principle of law: jurisdiction cannot be conferred by consent. If a court inherently lacks the authority to hear a case, the parties cannot give it that authority by agreeing. An order passed by a court without jurisdiction is a nullity—legally, it never existed. It can be challenged at any stage, even after the order has been passed.

The Court cited Kiran Singh v. Chaman Paswan, a 1954 Supreme Court judgment that established this principle: a decree passed by a court without jurisdiction is void, and its validity can be questioned even in execution proceedings.

How Section 11(6) and Section 2(1)(e) work together

The Court also clarified how Section 11(6) of the Arbitration Act interacts with Section 2(1)(e) (the definition of 'Court' under the Act). Section 2(1)(e) defines 'Court' as the principal civil court of original jurisdiction in a district, and in certain cases, the High Court exercising supervisory jurisdiction over that district court.

The Supreme Court held that Section 11(6) must be read harmoniously with Section 2(1)(e). This means an application for appointment of an arbitrator under Section 11(6) can only be made to a High Court that exercises supervisory jurisdiction over a court that would have had subject-matter jurisdiction over the dispute. You cannot pick any High Court in India. You must go to the High Court that supervises the courts where the dispute would ordinarily be heard.

Since the dispute arose from property in Muzaffarpur, Bihar, the courts with jurisdiction were in Bihar. The High Court exercising supervisory jurisdiction over those courts was the Patna High Court, not the Calcutta High Court.

The Court also noted that Section 42 of the Act (which says that once an application under Part I of the Act is made to a court, all subsequent applications must be made to the same court) could not apply here. Section 42 only operates when the earlier application was made to a court that had jurisdiction. The Section 9 application in Muzaffarpur was properly filed. The Section 11(6) application in Calcutta was not. The file in the Supreme Court felt thin—a single point of law, cleanly resolved.

What the Court actually ordered

The Supreme Court allowed the developer's appeal. It set aside the Calcutta High Court's order appointing an arbitrator and the order dismissing the review application. But it didn't leave the parties without an arbitrator. By consent of both parties, the Court appointed Justice Bhaskar Bhattacharya, former Chief Justice of the Gujarat High Court, as the sole arbitrator.

The Court also ordered that status quo on the property be maintained for 15 days, to give the parties time to approach the arbitrator for interim relief under Section 17 of the Act (which allows an arbitral tribunal to pass interim orders, similar to what a court can do under Section 9).

THE PLAY: When drafting an arbitration clause, specify the seat of arbitration explicitly—not just the venue for sittings—or risk having your chosen court's jurisdiction challenged at the threshold.

The Supreme Court ended where it began: with a clause that said too little and a court that assumed too much.