The seat of arbitration is a vital aspect of any arbitration proceedings. Significance of the seat of arbitration is that it determines the applicable law when deciding the arbitration proceedings and arbitration procedure as well as judicial review over the arbitration award. The situs is not just about where an institution is based or where the hearings will be held. But it is all about which court would have the supervisory power over the arbitration proceedings. It is well-settled that “seat of arbitration” and “venue of arbitration” cannot be used inter-changeably. But does similar analogy applies between ‘place’ of arbitration and ‘seat’. This question was answered recently by the Supreme Court of India in Mankastu Impex Private Limited v. Airvisual Limited Arb Pet. No. 32 of 2018 decided on 5 March 2020.
In this case, the Supreme Court was called upon to decide an application under Section 11(6) of the Arbitration & Conciliation Act, 1996 (‘Arbitration Act’) for the appointment of an arbitrator in an international commercial arbitration. The Arbitration clause in question provided ‘place’ of arbitration as Hong Kong. The Applicant Indian party urged before the Court that the seat of arbitration is Delhi since the underlying contract i.e. MoU in the instant case is governed by the laws of India and the Courts at New Delhi have the jurisdiction as per the dispute resolution clause. Per contra the simple submission of the Respondent was that by agreeing for the place of arbitration as Hong Kong the parties have agreed for the juridical seat of arbitration as that place and since the place of arbitration is outside India an application under Section 11 for the appointment of arbitration shall not lie before the Supreme Court of India.
The Governing law and the dispute resolution clause in the underlying MoU read as under:-
17 Governing Law and Dispute Resolution
17.1 This MoU is governed by the laws of India, without regard to its conflicts of laws provisions and courts at New Delhi shall have the jurisdiction.
17.2 Any dispute, controversy, difference or claim arising out of or relating to this MoU, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered in Hong Kong.
The place of arbitration shall be Hong Kong.
The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English language.
17.3 It is agreed that a party may seek provisional, injunctive, or equitable remedies, including but not limited to preliminary injunctive relief, from a court having jurisdiction, before, during or after the pendency of any arbitration proceeding.
In view of the above clause, the applicant argued that in the absence of the clear stipulation as to the proper law and curial law of the arbitration, laws of India should be taken as the proper law and curial law under the MoU.
The Court while deciding the issue observed that Section 2(1)(f) of the Arbitration Act defines “International Commercial Arbitration”. As per Section 2(1)(f), to be an “International Commercial Arbitration”, three factors ought to be fulfilled – (i) arbitration; (ii) considered as commercial under the laws in force in India; and (iii) at least one of the parties is national or habitual resident in any country other than India. In the present case, since the Respondent was incorporated under the laws of Hong Kong, the Court was concerned with “International Commercial Arbitration”.
Further, as per Section 2(2) of the Arbitration Act, Part-I (in which Section 11 is contained) shall apply where the place of arbitration is in India. If the “International Commercial Arbitration” is seated in India, then Part-I of the Act shall apply. The interpretation of Section 2(2) of the Arbitration Act was considered by the Constitution Bench in Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc.wherein it was inter alia held that Part-I of the Arbitration Act would have no application to “International Commercial Arbitrations” held outside India.
The Court observed that mere expression “place of arbitration” cannot be the basis to determine the intention of the parties that they have intended that place as the “seat” of arbitration. The intention of the parties as to the “seat” should be determined from other clauses in the agreement and the conduct of the parties.
In the present case, the arbitration agreement entered into between the parties provides Hong Kong as the place of arbitration. The agreement between the parties choosing “Hong Kong” as the place of arbitration by itself will not lead to the conclusion that parties have chosen Hong Kong as the seat of arbitration. The words, “the place of arbitration” shall be “Hong Kong”, have to be read along with Clause 17.2. Clause 17.2 provides that “….any dispute, controversy, difference arising out of or relating to the MoU “shall be referred to and finally resolved by arbitration administered in Hong Kong…..”. On a plain reading of the arbitration agreement, it is clear that the reference to Hong Kong as “place of arbitration” is not a simple reference as the “venue” for the arbitral proceedings; but a reference to Hong Kong is for final resolution by arbitration administered in Hong Kong. The agreement between the parties that the dispute “shall be referred to and finally resolved by arbitration administered in Hong Kong” clearly suggests that the parties have agreed that the arbitration be seated at Hong Kong and that laws of Hong Kong shall govern the arbitration proceedings as well as have power of judicial review over the arbitration award.
The words in Clause 17.2 that “arbitration administered in Hong Kong” is an indicia that the seat of arbitration is at Hong Kong. Once the parties have chosen “Hong Kong” as the place of arbitration to be administered in Hong Kong, laws of Hong Kong would govern the arbitration. The Indian courts have no jurisdiction for appointment of the arbitrator.
Clause 17.1 of the MoU stipulates that the MoU is governed by the laws of India and the courts at New Delhi shall have jurisdiction. The interpretation to Clause 17.1 shows that the substantive law governing the substantive contract are the laws of India. The words in Clause 17.1 “without regard to its conflicts of laws provisions and courts at New Delhi shall have the jurisdiction” has to be read along with Clause 17.3 of the agreement. As per Clause 17.3, the parties have agreed that the party may seek provisional, injunctive or equitable remedies from a court having jurisdiction before, during or after the pendency of any arbitral proceedings.
In nutshell, if one has to demarcate ‘place’, ‘venue’ and ‘seat’ then following diagram may help to understand the difference.
Thus, in a given situation, ‘place’ can be a convenient place to hold arbitration proceedings which then makes ‘place’ as ‘venue’ but in that case it is not the juridical seat of arbitration. ‘Place’ can also be ‘seat’ of arbitration if there exists no contrary indicia like different curial law of arbitration but again as we have seen the expression ‘place’ cannot in all circumstances connotes juridical seat though Model law and Arbitration act use the expression ‘place’ as seat at many places. Classic example is Section 20 of Arbitration Act which reads as under:-
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub–section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.
(3) Notwithstanding sub–section (1) or sub–section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing winners, experts or the parties, or for inspection of documents, goods or other property.
The expression ‘place’ in subclause 1 & 2 above means juridical seat of arbitration whereas the same expression in subclause 3 denotes venue. Thus, what is reasonable to infer that ‘place’ is a wider set which encompasses ‘venue’ and ‘seat’ depending on the context in which it is used subject of course of contrary indicia, if any, agreed by the parties in their underlying contract.
In essence, the genesis of what has been observed in this case by the Supreme Court of India maybe traced from English Authorities. In Braes of Doune Wind Farm (Scotland) Limited v. Alfred Mcalpine Business Services Limited  EWHC 426 (TCC), the clause in scrutiny read as under:-
“1.4.1. The Contract shall be governed by and construed in accordance with the laws of England and Wales and, subject to Clause 20.2 [Dispute Resolution], the Parties agree that the courts of England and Wales have exclusive jurisdiction to settle any dispute arising out of or in connection with the Contract.
(c) This arbitration agreement is subject to English Law and the seat of the arbitration shall be Glasgow, Scotland. Any such reference to arbitration shall be deemed to be a reference to arbitration within the meaning of the Arbitration Act 1996 or any statutory re-enactment.”
The English High Court interpreted the above clause to mean that the parties’ express agreement that the “seat” of arbitration was to be Glasgow, Scotland must relate to the place in which the parties agreed that the hearings should take place. However, by all the other references the parties were agreeing that the curial law or law which governed the arbitral proceedings was that of England and Wales. Although authorities establish that, prima facie and in the absence of agreement otherwise, the selection of a place or seat for an arbitration will determine what the curial law or “lex fori” or “lex arbitri” will be, where in substance the parties agree that the laws of one country will govern and control a given arbitration, the place where the arbitration is to be heard will not dictate what the governing or controlling law will be.
It is common for laws, rules and commentaries to use “place” and “seat” of arbitration interchangeably. However, “seat” seems preferable to “place” as it reflects more accurately the juridical nature of the concept, the nexus between territorial attachment and applicable law. It is “a legal construct, not a geographical location. The arbitral seat is the nation where an international arbitration has its legal domicile or juridical home”. Reference to the “seat” also helps to differentiate juridical attachment from the physical place where hearings and meetings are held (i.e. the venue), thus avoiding ambiguity and the potential for arguments about the intended location of the seat where arbitration agreements are poorly drafted in this respect (as regularly seen in practice). The Model Law and most arbitration rules draw a clear distinction between the seat of arbitration and the venue for hearings and meetings, and provide that the latter may change according to convenience without affecting the underlying connection to the seat.
 (2012) 9 SCC 552
 Lex Arbitri, Procedural Law and The Seat of Arbitration: Unravelling the Laws of the Arbitration Process (2014) 26 SAcLJ 886 at 
Disclaimer: The views expressed in this post are mine and do not reflect the views of the organisation(s) I am engaged with