Delhi in Clause 32.4, Goa in Clause 32.5, and Goa once more in the governing law clause: a franchise agreement that points in both directions has to be read as a whole, the Supreme Court has ruled, fixing the seat and undoing the Delhi High Court’s appointment of an arbitrator.
New Delhi: The Supreme Court has set aside an arbitrator’s appointment made by the Delhi High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, after holding that the juridical seat under a franchise agreement is Goa and not Delhi. Where the arbitration clause itself names two cities, the seat must be gathered from the agreement read as a whole, the Court said [Arcis Clean Energy Pvt. Ltd. v. Parshva Innovation].
The judgment was delivered on October 12, 2026 by Justices Manoj Misra and Vijay Bishnoi, in an appeal arising out of SLP (Civil) No. 35915 of 2025. The parties may still approach the jurisdictional High Court.
Three clauses, two cities
The Franchise Agreement is dated August 3, 2023. Under Clause 32.4, a dispute would go to a panel of sole arbitrator appointed mutually by the parties, and “The precise location of the arbitration shall be within Delhi”. Clause 32.5 stated: “The arbitration proceedings will be held in Goa”, with English as the language of the proceedings. Clause 38, the governing law clause, recorded that the parties “shall agree to submit to the exclusive jurisdiction of competent courts in Goa, India.”
On March 25, 2025, the respondent, Parshva Innovation, proposed a sole arbitrator under Clause 32. The appellant, Arcis Clean Energy, turned the proposal down on April 19, 2025, and Parshva moved the Delhi High Court under Section 11(6) of the 1996 Act. By an order of November 11, 2025, the High Court appointed an arbitrator and left the venue of the sittings to be settled with the parties.
The competing arguments
Arcis argued that Goa was the juridical seat and Delhi only a venue, so the Delhi High Court had no jurisdiction to appoint an arbitrator. Parshva replied that the arbitration agreement is separate from the main contract, that only the arbitration clause should be looked at, and that Clause 32.4, which mentions Delhi, should prevail.
Why the whole agreement matters
The Bench began with a proposition from Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd.: when the seat is settled, the courts at that place have exclusive jurisdiction, and parties may agree on a place for arbitration and give courts there exclusive jurisdiction. What had to be decided was whether a place named in an agreement that also confers exclusive jurisdiction is merely a venue or the juridical seat. The Court turned to the test restated in BGS SGS SOMA JV v. NHPC Ltd. and applied in Arif Azim Company Ltd. v. Micromax Informatics FZE, which asks for a single designated place, proceedings anchored to it, and no contrary indicia.
Delhi failed that test because the agreement named another place as well:
“Delhi is not the only place specified for arbitration.”
Since the arbitration clause itself held two places, the inquiry could not stop there. Drawing on Mankastu Impex (P) Ltd. v. Airvisual Ltd., the Court held that the parties’ intention on the seat is to be found in the other clauses of the agreement, and that the governing law clause would assist:
“the Governing Law clause i.e., Clause 38 of the Agreement would be helpful in determining the juridical seat.”
The Bench accepted that Clauses 32.4 and 32.5 appear to pull apart. Reading them harmoniously, without making either redundant, and together with Clause 38, the intention was clear:
“the parties have agreed that Goa shall be the juridical seat, Delhi is just a venue”
The result
The respondent had relied on Sasan Power Ltd. v. North American Coal Corporation (India) Pvt. Ltd., Cable Corporation of India Ltd. v. Jay Pee Sports International Ltd., Sunil Kumar Chandra v. Spire Techpark (P) Ltd., Ramkishorelal v. Kamal Narayan, Shree Bhowani Cotton Mills v. Union Textile Traders and Lyrus Life Sciences Pvt. Ltd. v. Acme Generics LLP. The Court distinguished all of them and held that, where an arbitration clause names two places, the agreement as a whole decides the seat.
Goa being the seat, the Delhi High Court “lacked jurisdiction to entertain the application under sub-section (6) of Section 11”, the Court concluded. The appeal was allowed and the order of November 11, 2025 set aside. The parties are free to pursue appropriate proceedings before the jurisdictional High Court, and pending applications were disposed of.
Drafting takeaways
One inconsistent clause can decide which High Court may appoint an arbitrator. If an arbitration clause names two cities, neither that clause by itself nor the word “venue” fixes the seat. The Court reads the entire agreement, and an exclusive jurisdiction or governing law clause pointing to one of the cities can tilt the outcome.
For drafters, the sensible course is to name a single place as the seat and keep the arbitration clause consistent with the jurisdiction clause. A Section 11(6) application filed before a court that is not at the seat risks being set aside, and the time lost with it.
Case Title: Arcis Clean Energy Pvt. Ltd. v. Parshva Innovation [SLP (Civil) No. 35915 of 2025]
Bench: Justices Manoj Misra and Vijay Bishnoi, Supreme Court of India
Date of Judgment: October 12, 2026
Appearances: For the appellant, Mr. Salvador Santosh Rebello, AOR, with Advocates Raghav Sharma, Sneha Bhargava, Ankit Rana and Devesh Khandelwal. For the respondent, Mr. Mudit Gupta, AOR, with Advocates Varun Singh, Alankriti, Somesa Gupta, Kajal Gupta, Arun Sidhant, Deepeika Kalia and Sudeep Chandra.