Appeals under Arbitration Act Section 37 not maintainable. New Delhi exclusive jurisdiction. Hardy Exploration judgment overturned.

The appeals under Section 37 of the Arbitration Act, 1996 were deemed not maintainable as the orders did not constitute refusals to set aside an arbitral award under Section 34. New Delhi was established as the "seat" of arbitration, granting exclusive jurisdiction to New Delhi courts. The judgment in Hardy Exploration was overturned for failing to apply the correct legal principles in determining the arbitration seat.

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Issues Involved:
1. Maintainability of appeals under Section 37 of the Arbitration and Conciliation Act, 1996.
2. Determination of the "seat" of arbitration proceedings between New Delhi and Faridabad.

Detailed Analysis:

Maintainability of Appeals under Section 37 of the Arbitration and Conciliation Act, 1996

Section 37(1) of the Arbitration Act, 1996 specifies the orders from which an appeal shall lie, namely:
- Refusing to refer the parties to arbitration under Section 8.
- Granting or refusing to grant any measure under Section 9.
- Setting aside or refusing to set aside an arbitral award under Section 34.

Section 13 of the Commercial Courts Act, 2015 provides the forum for appeals but does not independently grant a right of appeal. It states that appeals from the orders enumerated in Order XLIII of the CPC and Section 37 of the Arbitration Act, 1996 shall lie to the Commercial Appellate Division of the High Court.

The Supreme Court in Kandla Export Corporation v. OCI Corporation clarified that Section 13(1) of the Commercial Courts Act does not provide an independent right of appeal but only specifies the forum for appeals that are maintainable under Section 37 of the Arbitration Act, 1996.

The Court emphasized that an order refusing to set aside an arbitral award under Section 34 must be an adjudication of the grounds set out in Section 34, not merely a procedural order like returning a petition for lack of jurisdiction.

In the present case, the Special Commercial Court at Gurugram returned the Section 34 petition for lack of jurisdiction, which does not amount to an order refusing to set aside an arbitral award under Section 34. Therefore, such an order is not appealable under Section 37.

Determination of the "Seat" of Arbitration

The arbitration clause in question stated that "Arbitration Proceedings shall be held at New Delhi/Faridabad, India." The Supreme Court analyzed whether this clause designated New Delhi or Faridabad as the "seat" of arbitration.

The Court referred to the BALCO judgment which emphasized the importance of the "seat" of arbitration, stating that the choice of the seat carries with it the choice of the courts at the seat having exclusive jurisdiction over the arbitration proceedings.

Section 20 of the Arbitration Act, 1996 allows parties to agree on the place of arbitration, which is interpreted as the juridical seat of arbitration. The Court also referred to the Shashoua principle, which states that in the absence of any contrary indicia, the venue stated in the arbitration agreement is the juridical seat.

The Court noted that all arbitration proceedings in the present case, including the signing of the award, took place in New Delhi. Therefore, New Delhi was determined to be the "seat" of arbitration, giving exclusive jurisdiction to the courts in New Delhi.

The Court also addressed the Hardy Exploration and Production (India) Inc. case, which had incorrectly determined the seat of arbitration by not applying the Shashoua principle. The Supreme Court declared that the judgment in Hardy Exploration was not good law as it conflicted with the Five Judge Bench decision in BALCO.

Conclusion:

1. Maintainability of Appeals: The appeals under Section 37 of the Arbitration Act, 1996 were not maintainable as the orders in question did not amount to orders refusing to set aside an arbitral award under Section 34.

2. Seat of Arbitration: New Delhi was determined to be the "seat" of arbitration based on the arbitration clause and the conduct of proceedings, giving exclusive jurisdiction to the courts in New Delhi. The judgment in Hardy Exploration was overruled for not following the correct legal principles regarding the determination of the seat of arbitration.

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