The court has refused to reopen the arbitration’s jurisdictional question after the State continued proceedings for more than two years without challenging Delhi’s designation as the seat, underscoring the legal consequences of prolonged silence in arbitration matters.

Dispute Over a Road Contract

The case stems from a 2010 agreement between Jharkhand’s Road Construction Department and Ramky Infrastructure Limited for rehabilitation and upgradation of the Barhet-Sahebganj section of the Govindpur-Sahebganj State Road Project. The contract provided for arbitration hearings at Ranchi but did not expressly identify the seat of arbitration.

Delhi Becomes the Juridical Seat

When the arbitral tribunal held its first procedural hearing in September 2023, it fixed Delhi as the seat of arbitration, while leaving the venue to be decided with the parties. Representatives of the State were present, but the decision was not challenged at the time.

The issue resurfaced after Ramky approached the Delhi High Court seeking an extension of the tribunal’s mandate. The Delhi High Court extended the mandate by a year, noting that Delhi was the seat then in force. The State subsequently challenged the seat before the tribunal and, after that challenge failed, approached the Jharkhand High Court.

Why the Court Rejected the Challenge

Justice Ananda Sen held that seat and venue are legally distinct. While the venue determines where hearings may take place, the seat determines the arbitration’s juridical framework and the courts exercising supervisory jurisdiction.

The Bench found that the State had continued participating in the proceedings for around two-and-a-half years without challenging the tribunal’s order. Its conduct amounted to acquiescence and waiver under Section 4 of the Arbitration and Conciliation Act, 1996.

A Lesson in Timely Objection

The ruling ultimately places the emphasis on procedural discipline. Once a party knows of an alleged departure from the arbitration agreement, prolonged participation without timely objection can carry legal consequences. The court therefore dismissed the State’s petition, leaving Delhi as the seat of arbitration in the ongoing dispute.

Source: https://jharkhandheadlines.com/jharkhand-high-court-delhi-arbitration-seat-road-department-ramky-infrastructure/