Venue Alone Can’t Confer Jurisdiction: Himachal Pradesh High Court Denies NHAI’s Bid to Shift Arbitration Challenge from Bilaspur to Mandi

“Mere Holding of Hearings at Mandi Does Not Determine the Seat of Arbitration”, In a judgment delivered on 22nd December 2025, the High Court of Himachal Pradesh in National Highways Authority of India (NHAI) v. Paras Ram & Others, CMPMO Nos. 761 to 767 of 2025, decisively rejected NHAI’s contention that the District Judge at Mandi had exclusive jurisdiction to entertain petitions under Section 34 of the Arbitration and Conciliation Act, 1996, to challenge arbitral awards made under Section 3-G(5) of the National Highways Act, 1956. Justice Bipin Chander Negi held that the District Judge, Bilaspur, where the first Section 34 petition had been filed, alone retained jurisdiction under the mandate of Section 42 of the Arbitration Act.

The core of the dispute revolved around the interpretation of “seat of arbitration” in the context of statutory arbitrations, where the arbitrator is not contractually agreed upon but appointed by statute. NHAI argued that since the Divisional Commissioner, Mandi – acting as the arbitrator – conducted hearings and issued awards from his office in Mandi, the seat of arbitration was Mandi, thereby giving exclusive jurisdiction to the courts at Mandi. However, the Court ruled that “venue is not seat, and jurisdiction does not flow from the location of the arbitrator’s office or the place of hearings”.

“The Seat of Arbitration Is the Legal Anchor”: Court Applies BALCO and BGS Rulings to Reaffirm Seat Doctrine in Statutory Arbitrations

Justice Negi drew extensively from the Supreme Court’s landmark ruling in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 and its authoritative reaffirmation in BGS SGS SOMA JV v. NHPC, (2020) 4 SCC 234, to emphasize that the “seat” of arbitration is the “juridical centre” that determines court jurisdiction under the Arbitration Act. As the Court observed, “Mandi is only the venue where meetings or hearings for its own convenience are held by the arbitrator... this does not determine the ‘place of Arbitration’.”

The Court held that in the present case, neither the parties nor the arbitrator had designated a “seat” of arbitration in terms of Section 20 of the Arbitration and Conciliation Act, 1996. Referring to Section 20(3), the Court explained that the arbitrator is free to conduct hearings at any location that is convenient, but such convenience cannot override the statutory framework governing jurisdiction.

“The mere fact that the arbitrator holds office or conducts hearings in Mandi does not confer upon Mandi the status of ‘seat’ of arbitration,” the Court categorically held, adding, “It is not the requirement of law that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration.”

“First Filing Fixes Forum”: Section 42 of Arbitration Act Makes Bilaspur the Only Competent Court for All Future Applications

The Court decisively ruled that the “first application rule” under Section 42 of the Arbitration and Conciliation Act applies equally to arbitrations under the National Highways Act. As the Court noted, “once an application is made under Part I in a competent court, all subsequent applications arising from that arbitration must be made to that court and no other.”

The judgment reveals that the landowners (respondents) had filed their Section 34 petitions before the District Judge, Bilaspur on 03.11.2023, while NHAI’s petitions before the District Judge, Mandi were all filed much later – in some cases more than a month later. In CMPMO No. 767 of 2025, the gap between filings was almost three months, with landowners filing on 20.11.2023 and NHAI on 20.02.2024.

“Section 42 begins to operate the moment a valid application under Part I is filed in a court defined under Section 2(1)(e). In this case, that court is the Principal Civil Court of Original Jurisdiction at Bilaspur,” the Court declared. Citing State of West Bengal v. Associated Contractors, (2015) 1 SCC 32, the Court reiterated that Section 34 applications to set aside arbitral awards are squarely covered under Section 42, and therefore the jurisdiction of Bilaspur Court was locked in from the first valid filing.

The Court summed up its conclusion with clarity:
“The District Judge, Bilaspur has exclusive jurisdiction to entertain and decide all applications arising out of the arbitral proceedings. Mandi court has no jurisdiction in view of the first application rule under Section 42.”

Statutory Arbitration Under National Highways Act Fully Governed by Part I of Arbitration Act: Court Reiterates Legislative Harmony

Justice Negi also addressed the applicability of the Arbitration and Conciliation Act, 1996 to statutory arbitrations arising under the National Highways Act, 1956. Referring to Section 3-G(6) of the Highways Act and Section 2(4) of the Arbitration Act, the Court explained that statutory arbitrations are to be treated “as if there were an arbitration agreement”, and the provisions of Part I of the Arbitration Act apply unless they are inconsistent with the parent enactment.

“There is nothing in the National Highways Act or its rules that excludes the application of Section 42. Therefore, the Arbitration Act applies in full force,” the Court stated.

The notification issued by the Central Government under Section 3-G(5) merely vested territorial jurisdiction upon the Divisional Commissioner, Mandi, for conducting arbitration over land disputes arising in districts including Bilaspur. However, “this notification cannot be stretched to imply that Mandi is the seat of arbitration. The notification is purely administrative, not determinative of jurisdiction under the Arbitration Act.”

Conclusion: Venue Confusion Clarified, Procedural Discipline Reaffirmed

The High Court’s ruling stands as a firm reaffirmation of jurisdictional discipline under the Arbitration and Conciliation Act, 1996. By firmly rejecting NHAI’s attempt to relocate the forum based on the arbitrator’s office location and hearing venue, the Court preserved the statutory integrity of Section 42.

In doing so, the Court made it clear that the concept of ‘seat’ of arbitration is not a matter of assumption or administrative convenience, but a fundamental legal designation carrying exclusive jurisdictional consequences.

“The petitions are dismissed being devoid of any merit. The impugned order dated 28.06.2025 passed by the learned District Judge, Bilaspur does not call for any interference,” Justice Negi concluded, bringing closure to NHAI’s attempt to alter the forum of adjudication post facto.

Date of Decision: 22nd December, 2025