--- title: "Delhi High Court Rules: Arbitration Clause with Designated Seat Prevails Over Exclusive Jurisdiction Clause in Contract" date: 2025-06-30 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/arbitration-seat-trumps-jurisdiction-clause/ --- # Delhi High Court Rules: Arbitration Clause with Designated Seat Prevails Over Exclusive Jurisdiction Clause in Contract Posted On - 30 June, 2025 • By - King Stubb & Kasiva ## Summary The Delhi High Court, in the case of **M/s KLA Const Technologies Pvt Ltd v. M/s Gulshan Homz Private Limited** (decided on 14 May 2025), addressed the interplay between an exclusive jurisdiction clause and an arbitration clause within a contract. The Court held that when a contract specifies both a seat of arbitration and exclusive jurisdiction for courts at a particular location, the court at the designated seat of arbitration retains exclusive jurisdiction over matters arising from the arbitration. The arbitration clause prevails over any conflicting exclusive jurisdiction clause.  ## Facts - The Petitioner in this case was M/s KLA Const Technologies Pvt Ltd and the Respondent was M/s Gulshan Homz Private Limited.  - On 29 July 2023, the Respondent issued a Letter of Intent to the Petitioner for civil and structural works for the Gulshan Dynasty Moradabad Project, valued at Rs. 101.8 Crores. A formal agreement was executed on 6th September 2023.  - The Petitioner alleged delays and non-payment by the respondent, who later discontinued the project and issued a termination notice on 6 November 2024. The Petitioner invoked arbitration on 13 November 2024, but the Respondent did not respond.  - The Petitioner approached the Delhi High Court under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator.  - The Respondent objected to the territorial jurisdiction of the Delhi High Court, citing clauses that allegedly conferred exclusive jurisdiction on courts at Noida and the High Court of Allahabad.  ## Issues - Whether the Delhi High Court has jurisdiction to entertain the petition under Section 11 of the Arbitration and Conciliation Act, 1996, in light of conflicting clauses regarding seat/venue of arbitration and exclusive jurisdiction.  - Which clause prevails: the arbitration clause designating the seat/venue, or the exclusive jurisdiction clause?  ## Held - The Court held that **the seat of arbitration determines exclusive jurisdiction** for matters arising out of the arbitration agreement.  - Where the contract designates the seat of arbitration as Noida/Delhi, the courts at the seat (Delhi or Noida) have exclusive jurisdiction, overriding any conflicting exclusive jurisdiction clause.  - The Delhi High Court, as a court at one of the designated seats, has jurisdiction to appoint an arbitrator.  - The arbitration clause prevails over an exclusive jurisdiction clause when both exist, and the seat of arbitration is determinative.  ## Analysis - **Clause 37(a):** Disputes to be referred to arbitration, with seat and venue at Noida/Delhi.  - **Clause 37(b):** Subject to arbitration, exclusive jurisdiction conferred on District Court of Noida and High Court of Allahabad.  - **Clause 91.2 (GCC):** Courts of New Delhi alone have exclusive jurisdiction.  - **Clause 92.1 (GCC):** Venue of arbitration is Noida.  - The Court cited Supreme Court precedents (e.g., **Indus Mobile Distribution Pvt Ltd v. Datawind Innovations Pvt Ltd**) establishing that the seat of arbitration confers exclusive jurisdiction to courts at that seat.  - The intention of the parties must be gathered from the contract as a whole, and clauses should be harmoniously construed.  - When a seat is designated, it is akin to an exclusive jurisdiction clause for arbitration-related matters.  - The Court found that the arbitration clause (seat/venue: Noida/Delhi) and the exclusive jurisdiction clause (Noida/Allahabad or New Delhi) must be read harmoniously.  - In case of conflict, the seat of arbitration prevails for matters under the Arbitration Act.  - The Court rejected the respondent’s argument that only Noida courts had jurisdiction, holding that Delhi was also a designated seat.  - The Delhi High Court had jurisdiction to entertain the petition under Section 11 and to appoint an arbitrator, as Delhi was one of the agreed seats of arbitration.  *Last Updated on 3 July, 2025* --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)