Sophisticated Industrial Material Analytic Labs Pvt. Ltd. Vs Steel Authority of India Ltd.

This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (8 A&C Act 9) seeking appointment of the Sole Arbitrator for the adjudication of disputes between the parties arising out of the Contract dated 03^rd October 2019 (8 the Contract 9) executed between the parties.

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It is stated that the arbitration agreement is in Article 9 of the Contract and Clause 6 of the General Conditions of Contract as applicable to the parties herein. It is stated that since there were disputes between the parties, the petitioner invoked arbitration agreement vide letter dated 03^rd August 2024. It is stated that despite petitioner9s request, respondent did not consent to constitute the Arbitral Tribunal as per the aforementioned terms. 3. An objection has been taken by the respondent9s counsel pointing out to the agreement which is executed on 3^rd October 2019 at Kolkata as also to the Special Conditions of Contract (8 SCC 9), Clause 15 of which, gives

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/06/2025 at 23:42:15

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exclusive jurisdiction to the Court at Kolkata and therefore, contends that in this regard, as far as the seat of the arbitration is concerned, the same is at Kolkata.

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Counsel for petitioner, however, points out that as per Clause 1.2 and Clause 1.3 of the Contract, the hierarchy of documents and order of precedence, is as under:

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He states that there is no arbitration clause in the SCC or the Contract. On the contrary, Article 9 of the Contract refers to arbitration and points to GCC Clause 6 . GCC Clause 6.2 and Clause 6.2.1 in turn provides as under:

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/06/2025 at 23:42:15

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It is therefore, contended that not only is the venue of the arbitration proceeding New Delhi, but also reference is there to the forum of Delhi International Arbitration Centre (8 DIAC 9). Moreover, the anchoring of the said arbitration would be at Delhi, considering that parties have specifically agreed to this Clause, as governing them for the purpose of the resolution. 7. Reference by counsel for respondent to para 82 in BGS SGS SOMA JV v. NHPC Ltd. (2020) 4 SCC 234, which is extracted as under, would also not assist the respondents, considering the Supreme Court has

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/06/2025 at 23:42:15

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specifically referred to anchoring of proceedings, and venue in most cases would really be the seat of the arbitral proceedings.

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< 82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the <venue= of the arbitration proceedings, the expression <arbitration proceedings= would make it clear that the <venue= is really the <seat= of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as <tribunals are to meet or have witnesses, experts or the parties= where only hearings are to take place in the <venue=, which may lead to the conclusion, other things being equal, that the venue so stated is not the <seat= of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings <shall be held= at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a <venue= and not the <seat= of the arbitral proceedings, would then conclusively show that such a clause designates a <seat= of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that <the venue=, so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the <stated venue=, which then becomes the <seat= for the purposes of arbitration. =

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(emphasis added)

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This decision by the Supreme Court in BGS SGS ( supra ) and other relevant decisions have been usefully considered by a Coordinate Bench of this Court in Reliance Infrastructure Limited v Madhyanchal Vidyut Vitran Nigam Ltd. 2023 SCC OnLine Del 4894, in similar facts and

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/06/2025 at 23:42:15

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circumstances by the Court, relevant paragraphs of which are extracted as under:

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< 32. On a conspectus of the aforesaid judgments, the position of law that emerges is that when the contract contains an arbitration clause that specifies a <venue=, thereby anchoring the arbitral proceedings thereto, then the said <venue= is really the <seat= of arbitration. In such a situation the courts having supervisory jurisdiction over the said <seat= shall exercise supervisory jurisdiction over the arbitral process, notwithstanding that the contract contains a clause seeking to confer <exclusive jurisdiction= on a different court.

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33. In the present case, the relevant clause in the LOA purporting to confer <exclusive jurisdiction= is a generic clause, and does not specifically refer to arbitration proceedings. For this reason, the same also does not serve as a <contrary indicia= to suggest that that Delhi is merely the <venue= and not the <seat= of Arbitration. As such, the same cannot be construed or applied so as to denude the jurisdiction of the Courts having jurisdiction over the <seat= of Arbitration. =

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(emphasis added)

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Accordingly, the Court is not inclined to entertain the respondent9s objections. Besides, both petitioner and respondent have their offices at New Delhi, as evident from the memo of parties. Even that serves as an important indica for jurisdiction of Courts at New Delhi.

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Notice invoking arbitration was sent on 3^rd August 2024 and it was responded on 8^th August 2024. As per notice of arbitration, the dues are in the range of about 40 lakhs.

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In the opinion of this Court, various forums mentioned in Clause 6.2.1 the Arbitration would be usefully conducted at DIAC.

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Accordingly, Mr. Sarad Kumar Sunny , Advocate (Mobile No. 9958178853) is appointed as the Sole Arbitrator. The Arbitration

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/06/2025 at 23:42:15

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proceedings shall take place under the aegis of the Delhi International Arbitration Centre (8 DIAC 9). The arbitration proceedings shall be conducted under the Rules of the DIAC. The fee of the Sole Arbitrator shall be as per the Fourth Schedule of the A&C Act, as amended by the DIAC Rules.

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List before the DIAC 18^th March 2025. Let a copy of the present order be emailed to Secretary, DIAC on the email [email protected] .

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Copy of this order be communicated by the Registry to the respondent through email. Parties to appear before the DIAC, which shall also issue notice to the counsel for the respondent once again.

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Petition is disposed of with all pending applications, if any.

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Order be uploaded on the website of this Court.

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ANISH DAYAL, J

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MARCH 4, 2025/sm/na

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/06/2025 at 23:42:15

Sophisticated Industrial Material Analytic Labs Pvt. Ltd. v. Steel Authority of India Ltd.

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Sophisticated Industrial Material Analytic Labs Pvt. Ltd. v. Steel Authority of India Ltd.

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