Kolkata was just a venue, not the seat: SC sets aside arbitrator appointment

Their contract said arbitration sittings would be in Kolkata. So when a dispute erupted, the landowner went to the Calcutta High Court to get an arbitrator appointed. The developer objected: 'You have no jurisdiction here.' The High Court appointed one anyway. The Supreme Court just blew that up.

The question was simple. If two parties from Bihar agree to hold arbitration hearings in Kolkata, does that make Kolkata the legal "seat" of the arbitration — and give the Calcutta High Court the power to appoint an arbitrator? The Supreme Court's answer, delivered in March 2022, sent a signal: a venue is not a seat. A court without jurisdiction cannot be given jurisdiction by consent, no matter how many lawyers nod their heads.

When the Muzaffarpur property turned into a dispute

In 2015, a developer called 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 agreement contained an arbitration clause — a standard provision that says: if disputes arise, we will go to arbitration instead of court. The clause stated that arbitration "sittings" would be held in Kolkata. That single line, typed into a contract signed in Bihar, would become the entire battlefield.

By 2019, the relationship had soured. The landowner terminated the agreement. What happened next climbed all the way to the Supreme Court.

The landowner first filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (a provision that allows a party to seek interim protection — like freezing assets or preserving property — before the arbitration begins) in the District Court at Muzaffarpur. That made sense: the property was in Muzaffarpur, the agreement was executed in Bihar, and the parties were both connected to Bihar.

But then, in January 2021, the landowner filed a separate application under Section 11(6) of the Act (the provision that allows a party to ask a High Court to appoint an arbitrator when the other side refuses to cooperate) — not in Bihar, but in the Calcutta High Court.

The objection that was brushed aside

The developer objected immediately. The property was in Muzaffarpur. The agreement was signed in Bihar. The parties were from Bihar. The only connection to Kolkata was a single line in the arbitration clause saying "sittings in Kolkata." That, the developer argued, made Kolkata a venue — a physical location for hearings — not the seat of arbitration (the legal home of the arbitration, which determines which court has supervisory jurisdiction).

The Calcutta High Court did not agree. It appointed an arbitrator. The developer's counsel, who had been present during the hearing, later claimed he had agreed to the appointment without instructions from his client. The developer filed a review application, arguing that the appointment was a nullity because the court lacked territorial jurisdiction. The High Court dismissed the review.

By then, the developer had already approached the Supreme Court. The file, thin and worn from its journey across courts, now sat before the final bench.

The seat-venue distinction that decided everything

The Supreme Court bench — Justice Indira Banerjee and Justice A.S. Bopanna — had to answer one core question: did the Calcutta High Court have territorial jurisdiction under Section 11(6) to appoint an arbitrator when the arbitration clause designated Kolkata only as the venue for sittings, not as the seat?

The Court turned to the distinction between "seat" and "venue" — a distinction carefully developed in a line of Supreme Court judgments. The seat of arbitration is the legal jurisdiction that governs the arbitration proceedings. It determines which court can hear applications related to the arbitration — including appointment of arbitrators, challenges to awards, and interim measures. The venue, by contrast, is simply the physical location where hearings take place. Parties often choose a neutral venue for convenience, without intending to submit to that location's courts.

The Court applied the principles laid down in Union of India v. Hardy Exploration and Production (India) Inc. and Mankastu Impex Pvt. Ltd. v. Airvisual Ltd. — both of which held that a clause providing for "sittings" at a particular place does not, by itself, designate that place as the seat. The seat must be determined from the overall intention of the parties, the language of the agreement, and their conduct.

Here, the agreement said nothing about Kolkata being the seat. It only mentioned "sittings." The property was in Muzaffarpur. The agreement was executed in Bihar. And crucially, the landowner himself had first approached the District Court in Muzaffarpur under Section 9 — conduct that strongly suggested the parties did not intend Kolkata as the exclusive seat of arbitration. The Supreme Court noted that "a clause in an arbitration agreement providing that the sittings of the Arbitral Tribunal shall be at a particular place designates that place as the venue for hearings, not the seat of arbitration."

The Court further held that the seat "must be determined from the overall intention of the parties, the clauses of the agreement, and the conduct of parties." In this case, every fact pointed away from Kolkata.

Why consent could not cure a jurisdictional defect

The Calcutta High Court had appointed the arbitrator with the apparent consent of both counsel. But the Supreme Court was categorical: a decree or order passed by a court without territorial jurisdiction is a nullity. Such a defect cannot be cured by consent of the parties or their lawyers. The Court declared that "a decree or order passed by a court without territorial jurisdiction is a nullity" and that "such jurisdictional defect cannot be cured by consent of parties or counsel, and can be challenged at any stage."

The Court cited the old but ironclad principle from Kiran Singh v. Chaman Paswan: parties cannot by agreement confer jurisdiction on a court that inherently lacks it. They can only choose, by mutual consent, among courts that already have jurisdiction. The Calcutta High Court had no jurisdiction over this dispute at all — not a single cause of action (the set of facts that give someone the right to sue) arose within its territorial limits.

The Court read Section 11(6) harmoniously with Section 2(1)(e) of the Act (the definition of "Court" — which means the High Court that exercises supervisory jurisdiction over the district court that would have decided the dispute if it were a regular civil suit). Since the District Court at Muzaffarpur would have had jurisdiction over the underlying property dispute, the application for appointment of an arbitrator should have been filed before the Patna High Court — the High Court that supervises the Muzaffarpur district courts.

The Calcutta High Court's order was set aside. The Supreme Court appointed Justice Bhaskar Bhattacharya, former Chief Justice of the Gujarat High Court, as the sole arbitrator in its place. The courtroom fell silent as the operative order was read: "Appeals allowed. Impugned orders of Calcutta High Court appointing arbitrator and dismissing review application are set aside."

What this means for every arbitration clause

The message is unmistakable: if you want a particular High Court to have supervisory jurisdiction over your arbitration, you must explicitly designate that location as the seat — not just as the venue for sittings. A clause that says "arbitration shall be held in Mumbai" or "sittings in Delhi" does not automatically give the Bombay High Court or the Delhi High Court the power to appoint arbitrators or hear challenges.

The judgment also serves as a warning to High Courts: appointing an arbitrator by consent does not immunise the order from challenge on jurisdictional grounds. If the court lacks territorial jurisdiction, the appointment is void — and the Supreme Court will not hesitate to set it aside, even if both sides agreed at the time.

THE PLAY: When drafting an arbitration clause, use the word "seat" — not "venue" or "sittings" — to designate the legal home of the arbitration, and ensure the chosen seat corresponds to a High Court that would have jurisdiction over the underlying dispute.

The Supreme Court ended where it began: with a single line in a contract, and the difference between a place to sit and a place to be governed.