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SUPREME COURT OF INDIA CLEARS THE MURKINESS SURROUNDING THE TERMS ‘VENUE’, ‘SEAT’ AND ‘PLACE’
By Tasha Joseph
The confusion between ‘place’, ‘seat’ and ‘venue’ in International Commercial Arbitration cases was put to rest in the recent judgment of the Supreme Court in Union of India v. Hardy Explorations And Production(India) Inc.1. The decision was given by a three-judge bench which unanimously passed the decision that ‘seat’, ‘venue’ and ‘place’ did not signify the same meaning and could not be used interchangeably. Instead, the three terms denote different meanings and in the absence of express provision for any of the same, there were tests to be met in order to determine the actual ‘place’, ‘venue’ and ‘seat’.
In this case, Kuala Lumpur was selected as the ‘venue’ for the arbitration proceedings in the agreement, with the application of the UNCITRAL model for the same. Upon the Union of India challenging the award under section 342 in the Delhi High Court, the Court had to determine whether Kuala Lumpur was the ‘seat’ and hence if the action in the Indian court was unmaintainable. The Delhi High Court held that the courts did not have jurisdiction and thus refrained from looking into the merits of the case. The matter then went to a division bench and finally a three-judge bench of the Supreme Court.
The court went into the previous decisions such as Sumitomo Heavy Industries Ltd. v. ONGC & Ors. 3, Bhatia International v. Bulk Trading S.A. 4and BALCO case5 to understand the principles that need to be applied for deciding the seat of arbitral proceedings.
The Court observed that the determination of the seat has to be contextually done. Only when the ‘place’ was agreed upon, in the agreement, between the parties, ‘place’ would be equivalent to the seat. Positive action is needed and for ‘place’ to be treated as ‘seat’, a condition precedent (if any) must be met as well. For instance, a ‘place’ can become a ‘seat’ if a condition precedent present (if any) is met. For the ‘venue’ to become ‘seat’ something else was needed as a concomitant to the provision of ‘venue’ in the agreement. ‘Venue’ and ‘place’ do not ipso facto assume the status of a ‘seat’.
There were no conditions precedent or any positive act mentioned to determine Kuala Lumpur as the ‘seat’ in the concerned matter and hence Kuala Lumpur could not be treated as the juridical seat. Thus, the matter was maintainable as the courts in India have jurisdiction and the order passed by the Delhi High Court had been set aside.
Registration for Pax Moot 2020 is now open!
Teams are invited to register for the PAX Moot, Asser Round 2020. Registration will be possible until March 30th. However we do advise teams to register as soon as possible. The registration fee is 100 Euros per team.
The moot court competition comprises a written round and oral round. For the written round each team will be required to submit a written assignment as requested by the case (for details, see Rules and Procedures). The oral round will be scheduled as a 2 full-day event on 28-29 May 2020, preceded by a welcoming event for all teams on 27 May (evening). The first day of the competition (general rounds) will be held at the University of Antwerp. On the second day, the participating teams will be invited to the EU Commission in Brussels, where the semi-finals and final rounds will be held.
This year, we have invited Alex Layton QC, a leading specialist in private international law, to draft the case and be a member of the final panel of the oral round.
The organising team hopes that this year’s competition will attract many teams from EU Member States and beyond! Besides the collective prizes for best team and best written submission, one member of the final winning team will be given the “Best Speaker Award” of the moot, and our partner, Herbert Smith Freehills, has graciously invited the next recipient of that award for an internship in its Paris office!
For further information please visit www.paxmoot.com, or email us at info@paxmoot.com.
Sincerely,
PAX Moot Team
Save the date: Conference on ‘Regulation BI-bis: a standard for free circulation of judgments and mutual trust in the EU’, 24 September 2020.
The Conference represents the final event of the JUDGTRUST Project (2018-2020), funded by the Justice Programme of the European Union (2014-2020). The objective of the Project is to identify best practices and to provide guidelines in the interpretation and application of Regulation 1215/2012 (BI-bis). The JUDGTRUST Project is coordinated by the T.M.C. Asser Instituut and carried out in partnership with the University of Hamburg, the University of Antwerp and the Internationaal Juridisch Instituut.
The Conference will host panels on, inter alia, the scope of application, relationship with other instruments, rules on jurisdiction, provisional measures, as well as enforcement and recognition of foreign judgments. Additionally, the key findings from the National Reports of the EU Member States will be presented. It aims to bring together academics, policy makers and legal practitioners. It will take place on Thursday 24 September 2020 at the T.M.C. Asser Instituut, The Hague.
More information will be provided on the Project website (https://www.asser.nl/judgtrust) shortly.