SRINAGAR: The Jammu and Kashmir and Ladakh High Court has returned a petition filed by the Union of India seeking substitution of an arbitrator in a dispute with M/s PNSC Infrastructure Pvt. Ltd., holding prima facie that the seat of arbitration had been fixed at Delhi and that the dispute must therefore be taken before the competent court having jurisdiction there. Justice Rajnesh Oswal, in a judgment pronounced on August 14, 2026, declined to examine the merits of the Centre’s allegations against the arbitrator, saying doing so would require the court to assume that Jammu was the seat of arbitration and thereby “usurp” jurisdiction.
The judgment was reserved on July 3 and pronounced on August 14 at the Jammu wing of the High Court. The Union of India, through the Executive Engineer (Civil), CPWD, Landoi Bridge, Satwari Cantt, Jammu, was represented by Deputy Solicitor General of India Vishal Sharma, assisted by Central Government Standing Counsel Karan Sharma. PNSC Infrastructure Pvt. Ltd. was represented by Senior Advocate K. Nirmal Kotwal, assisted by advocate Rajveer Singh Isher.
The petition, Arb P No. 54/2024, was filed by the Union government seeking substitution of the sole arbitrator, Akhilesh Kumar, who had been appointed by the Additional Director General (Jammu), CPWD, on March 14, 2023, to adjudicate 18 claims raised by PNSC Infrastructure.
The dispute originated from a CPWD contract awarded to PNSC Infrastructure for construction of a transit campus at IIT Jammu, including an additional RCC retaining wall and structural steel works for domes and a deck bridge. An agreement, No. 01/EE/JMCD/2017-18, was executed between the parties. After disputes arose, the company invoked the arbitration clause contained in Clause 25 of the General Conditions of Contract for Central Public Works Department works, 2014.
The Union government argued that the contract was awarded and executed in Jammu and that the arbitrator was also appointed in Jammu. It therefore maintained that, following repeal of the Jammu and Kashmir Arbitration and Conciliation Act, 1997, the Arbitration and Conciliation Act, 1996, as applicable to the Union Territory of Jammu and Kashmir, governed the proceedings.
A major dispute subsequently arose over the manner in which the arbitration proceedings were conducted and, crucially, over the seat of arbitration.
The arbitrator entered upon the reference on March 17, 2023, and held a preliminary hearing on April 13 through Google Meet. The Union government requested physical hearings in Jammu, citing the technical complexities of the dispute, the voluminous documentary record and the need for possible on-site inspection of the construction works. According to the petitioner, however, the arbitrator directed that future hearings should generally be conducted virtually.
The Centre subsequently alleged that the arbitrator incorrectly recorded its consent in the minutes of proceedings and, in particular, recorded that Delhi had been mutually agreed upon as the seat of arbitration, despite no such consent having been given.
The Union government also claimed that the arbitrator’s mandate had expired on March 16, 2024, under Section 29-A of the Arbitration and Conciliation Act, 1996, because the proceedings had not been completed within the prescribed period. The Centre said it had informed the arbitrator that it did not consent to an extension. The arbitrator rejected the contention, holding that the seat had been fixed at Delhi and that the applicable time-limit provisions therefore differed.
The respondent company contested the maintainability of the petition itself, arguing that the High Court at Jammu lacked territorial jurisdiction because the parties had mutually agreed to Delhi as the seat of arbitration. It also maintained that the arbitrator’s mandate remained in force and that the parties had subsequently consented to a six-month extension.
During arguments, DSGI Vishal Sharma contended that the arbitrator’s conduct was questionable and that the tentative points for the April 13, 2023 hearing contained no proposal to fix Delhi as the seat. He also pointed to what he described as a contradiction in the arbitrator’s approach: while the minutes recorded Delhi as the seat, the arbitrator had simultaneously applied the Section 29-A regime applicable to Jammu and Kashmir.
Senior Advocate Nirmal K. Kotwal, appearing for PNSC Infrastructure, argued that Delhi had been fixed as the seat with the mutual consent of the parties and consequently the Jammu and Kashmir High Court lacked territorial jurisdiction. He also argued that the petitioner’s claim of having been unaware of the designation of Delhi as the seat was an excuse, particularly as the petitioner had continued participating in the arbitration for more than a year.
The High Court examined the minutes of the April 13, 2023 proceedings and found that, at Serial No. 19, they specifically recorded: “with the consent of both the parties, it was decided that the Seat of Arbitration, shall be at Delhi”.
The court noted that the Union government had admittedly received the procedural order on the same day, April 13, 2023, but continued to participate in the arbitration proceedings for more than a year before disputing the designation of Delhi as the seat. The court said it would refrain from commenting on the plausibility of the petitioner’s claim that it became aware of the relevant minutes only on May 16, 2024.
Justice Oswal held that the designation of Delhi as the seat had jurisdictional consequences. “Prima facie, this Court is of the view that, since the seat of arbitration was designated as Delhi,” the controversy should be adjudicated by the court having jurisdiction according to that designated seat.
The court relied upon the Supreme Court’s judgment in Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovation Pvt. Ltd., which held that once the seat of arbitration is designated, it operates akin to an exclusive jurisdiction clause and vests the courts at the designated seat with jurisdiction over the arbitral proceedings.
It also referred to the Supreme Court’s judgment in Inox Renewables Limited v. Jayesh Electricals, which held that when the seat of arbitration is shifted by mutual agreement, jurisdiction shifts with it and the courts at the newly designated seat acquire exclusive jurisdiction.
The High Court made it clear that it was not adjudicating whether the arbitrator had actually committed fraud or whether the Union government’s allegations regarding the recording of consent were correct. It said that deciding those questions would first require it to determine that Jammu was the seat of arbitration.
“This Court could entertain the petitioner’s prayer for the appointment of a substitute arbitrator only if it were to hold that the seat of arbitration is located at Jammu,” the court observed. Given the dispute over the designated seat, deciding the merits would effectively amount to finding that the seat was Jammu, a conclusion the court said it could not reach “without usurping jurisdiction”.
Consequently, without commenting on the merits of the rival claims, the High Court returned the petition to the Union government to approach the competent court having jurisdiction in view of its prima facie finding that the seat of arbitration had been fixed at Delhi. The petition was accordingly disposed of.
