Holding

A decision by a Joint Arbitration Committee on the venue of arbitration is not an award or interim award and is therefore not appealable under Section 34 of the Arbitration and Conciliation Act, 1996.

Summary

Sanshin Chemicals entered into a technical collaboration agreement with Orientals Carbons that contained Clause 8.4, providing that if the parties could not agree on the place of arbitration within 30 days, a Joint Arbitration Committee (JAC) would decide the venue. The JAC determined the venue on 15 July 1998. Sanshin challenged this decision before the Delhi High Court under Section 34 of the Arbitration and Conciliation Act, 1996, claiming it was an interim award amenable to appeal. The High Court and the Division Bench held that the JAC’s decision was not an award and dismissed the petition. On appeal, the Supreme Court examined whether a decision on venue constitutes an award or interim award under the Act. It held that the JAC’s decision does not determine the parties’ legal rights, is not a determination of a dispute under the contract, and therefore is not an award or interim award; consequently, it is not appealable under Section 34. The appeal was dismissed.

Issues considered

The decision of a Joint Arbitration Committee on the place of arbitration is an 'award' or 'interim award' within the meaning of Section 34 of the Arbitration and Conciliation Act, 1996.
Whether such a decision is appealable under Section 34.

Legislation cited

Arbitration and Conciliation Act, 1996s. 20, s. 2(6), s. 28, s. 2(c), s. 34

Subjects

ArbitrationVenue of arbitrationInterim awardSection 34Joint Arbitration CommitteeAward definitionAppeal

Judgment

SANSHIN CHEMICALS INDUSTRY A
v.
ORIENTALS CARBONS AND CHEMICALS LTD. AND ORS.

FEBRUARY 16, 2001

[G.B. PATTANAIK, K.G. BALAKRISHNAN AND B
B.N. AGRAWAL, JJ.]

Arbitration and Conciliation Act, I 996-Sections 20 & 34-Decision
on the question of venue of arbitration-As agreed upon by parties under
arbitration clause-Whether appealable-Held, no, since the decision is C
neither an award not an-Interim award deciding legal rights of the parties
under the contract.

Appellant and respondent No. 1 entered into an agreement. Under Clause
8.4 of the agreement it was agreed upon that if the parties were not able to
designate a place of arbitration or were unable to agree thereon within 30 D
days after the demand of arbitration was made, the same was to be determined
by a Joint Arbitration Committee.

Respondent No. 1 demanded arbitration. Since the parties did not agree
upon the place of arbitration within 30 days of the demand of arbitration, the E
Joint Arbitration Committee was formed. The Committee decided the venue
for the sittings of the arbitral tribunal.

The appellant filed an application before High Court against the order
of the Committee, under Section 34 of the Arbitration and Conciliation Act.
Single Judge dismissed the application, holding that the decision of Joint F
Arbitration Committee, not being award, was not amenable to appeal under
Section 34. Division Bench dismissed the appeal of the appellant.

In appeal to this Court, the appellant contended that the decision of the
Joint Arbitration Committee regarding the venue was an interim award
amenable to appeal under Section 34, since the decision of the venue amounts G
to vital right of a party as the rules and procedure applicable for resolving
the dispute would depend on the decision of the venue; and if it is held that
Section 34 is not applicable to the decision in question, the aggrieved party
will be left remedyless.

Dismissing the appeal, the Court
1101
H
1102 SUPREME COURT REPORTS [2001] 1 S.C.R.

A HELD: I. The decision on the question of venue under Section 20 of
the Arbitration and conciliation Act would not come within making of an
arbitral award starting from Section 28 and on this view of the matter also,
the said decision on the question of venue will not be either an award or an
interim award so as to be appealable under Section 34 of the Act The decision
B of the Joint Committee on the question of the venue under Clause 8.4 is not
a decision, decidi_ng legal rights of the parties under the contract. There is
no mutuality and the said Committee is merely a machinery for deciding the
question of venue. Such a decision does not have the characteristics of an
arbitration award nor even can it be held to be an interim award. The conclusion
of the Joint Committee is a conclusion on the guidelines contained in second
C part of Clause 8.4 of the agreement and is not a judicial determination and as
such the said conclusion would not amount to an award. Ill 09-E-Ff

Konkan Railway Corporation ltd. & Ors. v. Mehu/ Construction
Company, 120001 7 SCC 201, relied on.

D KK. Modi v. KN. Modi & Ors., ll998f 3 SCC 573, referred to.

2. The ultimate arbitral award could be assailed on the grounds indicated
in sub-section (2) of Section 34 and an erroneous decision on the question of
venue, which ultimately affected the procedure that has been followed in the
arbitral p,roceeding could come within the sweep of Section 34 (2) and as
E such it cannot be said that an aggrieved party has no remedy at all.(1112-CI

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1309 of
2001.

From the Judgment and Order dated 8.8.2000 of the Delhi High Court
F in F.A.O. (O.S.) No. 224 of2000.

Ashok H. Desai, A.K. Ganguli Gaurav Banerjee, D. Wadhwa and Dinesh
Mathur, for Mis. J.B. Dadachanji and Co. for the Appellant.

D.A. Dave, Ramesh Singh and Rajesh Kumar for the Respondents.
G
The Judgment of the Court was delivered by

PATTANAIK, J. Leave granted.

This appeal by grant of special leave is directed against the judgment
H of Delhi High Court dated 8th of August, 2000. The question for consideration
SAN SHIN CHEM. INDUS.'" ORIENTAL CARBONS AND CHEM. LTD. [PATTANAIK, J.] 1103

is whether a decision regarding the venue of the arbitration proceedings A
could be assailed in appeal under Section 34 of the Arbitration and Conciliation
Act, 1996, The Division Bench of the High Court by the impugned judgment
agreed with the conclusion of the learned Single Judge and came to hold on
examining the arbitration clause in the agreement that the decision with regard
to the venue of the arbitration sitting cannot be held to be an interim award B
and as such Section 34 of the Act cannot be invoked.

The appellant and respondent No. 1 entered into a technical collaboratioTJ
agreement called 'Insoluble Sulphur Technical Collaboration Agreement' on
!st of August, 1989. Under the agreement, respondent No. 1 was required to
provide technical information for production of insoluble sulphur in India. C
Appellant discharged its obligation under the agreement. The said respondent
No. I in May, 1996, wrote a letter to the Indian Council of Arbitration, making
a claim against the appellant on the basis of certain disputes between the
parties. But the Indian Council of Arbitration returned the papers to respondent
No. I on 15.5.96. On the very same day, the said respondent No. I filed a
statement of claim before respondent No. 2, which was registered as Arbitration D
Case No. FTA/137. Said respondent No. 2, by its letter dated 25th of June,
1996 called upon the appellant to appoint an arbitrator. On 9.7.96, the appellant
wrote to the respondent No. 2 bringing to its attention clause 8.4 of the
agreement and stated that the appellant has hot received any demand for
arbitration from OCCL and as such the respondent No. 2 has no jurisdiction E
in the matter. Respondent No. 2 however by its order dated 17th of July, 1996,
called upon the appellant to submit the agreement regarding the venue of
arbitration with reasons within 30 days. Appellant immediately answered the
aforesaid letter of the respondent No. 2 by letter dated 22.7.96, questioning
the jurisdiction of the respondent No. 2 and also seeking clarification as to
whether FICCI had accepted the statement of claim of respondent No. I. At F
this point of time, the appellant was assured that respondent No. 2 will not
proceed with the matter till the issues regarding the venue are sorted out. On
9.8.1996, respondent No. l's lawyer intimated respondent no. 2 that they had
already appointed an arbitrator and it was for the arbitral tribunal to decide
the venue under Section 20 of the Arbitration and Conciliation Act, 1996. G
Respondent No. 2 was called upon to nomiriate the appellant's arbitrator.
Appellant by his letter dated 9th of August, 1996, intimated the respondent
No. 2 that the requirement of Article 8.4 not having been complied with, there
is no question of nominating arbitrator on behalf of the appellant. Appellant
also wrote a letter to the respondent No. I on 6th of September, 1996,
indicating therein that the Registrar of FICCI had no jurisdiction and that H
1104 SUPREME COURT REPORTS [200 I) I S.C.R.

A there had been no proper demand for arbitration. It was also stated that in
any event, Japan was the designated place of arbitration. On 16th of October,
1996, respondent No. 2 sent a communication to the Manager, Arbitration
Department, Japan Commercial Arbitration Association, stating therein that
since parties had not been able to agree on the place of arbitration within 30
B days of the notice calling upon them to submit the agreement, the JCAA may
nominate a member on the Joint Arbitration Committee. In that letter it had
been stated that respondent No. 2 had already nominated one Umesh Kumar
Khaitan as its Member on the Joint Arbitration Committee. Pursuant to the
aforesaid letter from respondent No. 2, the JCAA appointed respondent No.
5 as its Member by letter dated 25th of October, 1996. Appellant had made
C some correspondence and queries regarding the proceedings of the Joint
Arbitration Committee. Mr. Umesh Khaitan resigned as Member of JAC on
12th of January, 1998 and he was, therefore, substituted by respondent No.
3. The aforesaid JAC met in Delhi on 15th of July, 1998 and decided the venue
for the sittings of the arbitral tribunal. The appellant filed an application
before a learned Single Judge of Delhi High Court, assailing the decision of
D the Joint Arbitration Committee dated 15th July, 1998 on various grounds
under Section 34 of the Arbitration and Conciliation Act, 1996. The learned
Single Judge by his Judgment dated 7th of April, 2000, dismissed the said
application of the appellant on a finding that the impugned decision of the
Joint Arbitration Committee dated 15th of July, 1998 is not an award and as
E such is not amenable to appeal under Section 34 of the Arbitration and
Conciliation Act, 1996. Against the said judgment of the learned Single Judge,
the appellant preferred an appeal and the Division Bench having dismissed
the appeal by its Judgment dated 8th of August, 2000, the present appeals
has been preferred to this Court.

F Mr. Ashok H. Desai, the learned senior counsel, appearing for the
appellant contended that on a plain reading of clause 8.4 of the Technical
Collaboration Agreement, would indicate that there is no agreed venue where
the arbitral proceedings could be conducted and on the other hand, the
procedure in the arbitral proceedings would be governed by the decision of
G the venue inasmuch as if it is to be held in India, then it shall be conducted
in accordance with the rules applicable in India and if it is to be conducted
in Japan, then the rules of Japan Commercial Arbitration Association would
apply. According to Mr. Desai, since the procedure and the rules to be
applicable for resolving the dispute would depend upon the very decision of
the venue, such a decision amounts to a vital right of the party being decided
H by the Joint Arbitration Committee and as such the same partakes the character
SANSHIN CHEM. INDUS. I'. ORIENTAL CARBONS AND CHEM. LTD. [PATTANAIK, J.] J J05

. of an interim award and consequently Section 34 of the Arbitration and A
y'
Conciliation Act, 1996 would apply to such a decision and aggrieved party
against such decision cannot be held to be remedy-less. Mr. Desai further
urged that on an analysis of the agreement, itself would indicate that it
contains two arbitration clauses, one nom~nclatured as Joint Arbitration
Committee and the other is the Arbitral Tribunal. While the former decides the
dispute in relation to the venue, the latter decides the dispute on merits of
B
the claim. Under such circumstances to hold that the decision of the Joint
Arbitration Committee on the dispute relating to the venue even does not
amount to an interim award, is un-sustainable in law and the learned Single
Judge as well as the Division Bench committed serious error in recording a
finding that the said decision does not amount to an award. Mr. Desai also c
urged that in case of an International Commercial Arbitration, the seat of the
arbitral proceeding is of paramount importance and the parties to the agreement
being conscious of the same, provided such an elaborate mechanism for
resolution of a dispute in the event no agreement is arrived at on the' question
of venue. Adjudged from this stand point, the impugned judgment illegally
excludes such a decision from the purview of a judicial review by way of filing D
an appeal under Section 34 of the Act and the same must be interfered with.
Mr. Desai also urged that in view of the definition of "Award" in the Act in
Section 2(c) which includes an interim award, and an award being a final
determination of a particular issue or claim in the arbitration and the issue
regarding venue being of seminal importance for adjudication of the rights of E
the parties, the conclusion is irresistible that such decision by the Joint
Committee of Arbitrators, must be held to be an interim award and as such
amenable to be reviewed under Section 34 of the Act and consequently, the
High Court committed serious error in holding to the contrary.

Mr. D.A. Dave, the learned senior counsel, appearing for the respondents F
on the other hand submitted that though the expression 'award' has been

..
defined to include an interim award under Section 2( c) of the Act, but a
decision to become an award must be a final determination of a particular
issue or claim in the arbitration. The decision on the question of venue by
a forum under the agreement termed as Joint Arbitration Committee, is at an
G
earlier stage of initiation of the proceedings of the arbitral tribunal and,
therefore, the same cannot be termed as an interim award. The High Court,
therefore, was justified in not entertaining an appeal against the same under
Section 34 of the Act. With regard to the different clauses of the agreement,
Mr. Dave contends that the parties themselves agreed that the place of
arbitration shall be determined by the Joint Arbitration Committee and such H
(

1106 SUPREME COURT REPORTS (2001) I S.C.R.

A determination shall be binding and final, whereas the arbitration clause
stipulates that any claim or dispute arising out of or relating to the agreement
shall be settled by arbitration. The very fact that the parties agreed that the
question of venue will be determined by a Joint Arbitration Committee in the
event parties do not designate the place of arbitration or are unable to agree
B within 30 days of the demand, indicates that the parties never intended the
said decision to partake the character of an award to be assailed in appeal
and on the other hand the agreement not having authorised the arbitral
tribunal to determine the place of arbitration, clearly establishes that such a
determination by a separate forum is not an award and, therefore, is not
appealable under Section 34 of the Arbitration and Conciliation Act. Mr. Dave
C also contended that the argument advanced on behalf of the appellant that
the decision with regard to the venue of the arbitral proceeding is an adjudication
of a vital right of the parties inasmuch as the procedure to be adopted in the
arbitral proceedings would be the law which governs the venue of the
proceedings, is devoid of any force in view of Clause 9( l) of the agreement
D which categorically indicates that the agreement shall be interpreted in
accordance with and governed by the laws of India. According to Mr. Dave,
this provision in the arbitration agreement is conclusive of the fact as to
which law will govern and consequently, the decision of the Joint Arbitration
Committee with regard to the venue looses its significance. It is next contended
by the learned senior counsel for the respondents that the arbitration clause
E providing resolution of any dispute or claim arising out of the agreement by
arbitration can obviously relate to a claim or dispute in relation to the contract
and a decision or determination by the Joint Arbitration Committee on the
question of venue, which power the Committee gets under the agreement
-
itself, cannot be held to be a decision in course of the arbitral proceedings
F nor can it be said to be an adjudication of claim arising out of the agreement
and, therefore, is not an award. Mr. Dave also after referring to the different
provisions in the Arbitration and Conciliation Act contended that making of
an arbitral award and termination of proceedings occurs in Chapter VI and
starts from Section 28, whereas place of arbitration occurs in Chapter V
G dealing with the conduct of arbitral proceedings. The commencement of
arbitral proceedings contemplated under Section 21 is the date when a particular
dispute is referred to the arbitration. In this view of the matter a decision on
the question of venue will not be an award or interim award against which
a party can take recourse to a Court under Section 34 and as such the
impugned judgment of the learned Single Judge as well as the Division Bench
H remain unassailable.
SANSHIN CHEM. INDUS.,. ORIENTAL CARBONS AND CHEM. LTD. [PATT A NAIK, J.] ] ] 07

Before we examine the rival submissions niade, it would be appropriate A
for us to notice the relevant clauses of the agreement, which ultimately would
help us to decide the question as to whether the decisions of the Joint
Arbitration Committee dated 15.7.1998 can be held to be an interim award,
Clause 8.4 is in fact the most crucial clause that requires consideration, which
is quoted herein-below in extenso :

"'Clause 8.4.-Any dispute or claim arising out of or relating to this
Agreement shall be settled by arbitration. If the arbitration is to be
held in India, the dispute shall be submitted to the Arbitration Tribunal
of the Federation of Indian Chambers of Commerce and Industry and
shall be conducted in accordance with the Rules of that Tribunal. If C
the arbitration is to be held in .Japan, it shall be conducted in accordance
with the Rules of the Japan Commercial Arbitration Association.

In the event that the parties have not designated the place of arbitration
or are unable to agree thereon within thirty (30) days after the demand
for arbitration has been made, the place of arbitration shall be D
determined by a Joint Arbitration Committee of three memb~rs, one to
be appointed by the Arbitration sub-committee of the Federation,
another by the Japan Commercial Arbitration Association and the
third of a nationality other than that of any one of the parties to act
as Chairman to be chosen by the other two members. In deciding the E
place of arbitration, the Joint Arbitration Committee shall consider
among others the principle that, if only the quality of the good is in
dispute and/or inspection of the goods is necessary, arbitration of
such case shall take place at the place where the merchandise is
located. The party demanding arbitration according as it is resident in
India or Japan shall give notice to the Arbitration Tribunal of the F
Federation or the Japan Commercial Arbitration association, as the
case may be. The Arbitration Tribunal of the Federation or the Japan
Commercial Arbitration Association, as the case may be, shall request
both the parties to submit their agreement and reasons within thirty
(30) days for preference regard.ing the place of arbitration. The G
determination of the place by the Joint Arbitration Committee shall be
final and binding."

Clause 9.1 stipulates that the agreement shall be interpreted in accordance
with and governed by the laws of India. Clause 9.7 is extracted herein-below
in extenso: H
1108 SUPREME COURT REPORTS [2001) 1 S.C.R.

A "9. 7. The terms and conditions herein contained constitute the entire
agreement between the parties and shall supersede all previous
communication, either oral or written, between the parties with respect
to the subject matter hereof, and no agreement or understanding
varying or extending the same shall be binding upon either party
unless in writing signed by a duly authorised representative thereof
B in which writing this Agreement is expressly referred to."

Apart from the aforesaid relevant clauses, it would be appropriate to notice
a few sections of the Arbitration and Conciliation Act, 1996. Section 2(6) is
extracted herein-below in extenso :

c "Sec.2(6) : Where this Part, except section 28, leaves the parties free
to determine a certain issue, that freedom shall include the right of the
parties to authorise any person including an institution, to determine
that issue."

D Section 20 is the provision for deciding the place of arbitration, which is
extracted herein-below in extenso :

"Sec.20 Place of arbitration- (I) The parties are free to agree on the
place of arbitration.

(2) Failing any agreement referred to in sub-section (I), the place of
E arbitration shall be determined by the arbitral tribunal having regard
to the circumstances of the case, including the convenience of the
parties.

(3) Notwithstanding sub-section (I) or sub-section (2), the arbitral
tribunal may, unless otherwise agreed by the parties, meet at any
F place it considers appropriate for consultation among its members, for
hearing witnesses, experts or the parties, or for inspection of
documents, goods or other property."

On a construction of Clause 8.4 of the Agreement, it is apparent that the
G parties themselves have maintained a distinction between submission of
dispute to the arbitration tribunal and decisions as to the place of arbitration
to be determined by a Joint Arbitration Committee of three members. In the
first part of the Clause. parties have agreed for referring any dispute or ~!aim
arising out of, or relating to the agreement to be s~_!!loo by arbitration of an
arbitration tribunal. The second. pJl!(.{}ftlre agreement relates to a decision as
H to the venue of arbitration which in the event of lack of agreement between
SANSHIN CHEM. INDUS. "·ORIENTAL CARBONS AND CHEM.LTD. [PA TTANAIK, l.) 11 ()9
..... y the parties, is required to be determined by a Joint Arbitration Committee -of A
three members. Such decisions of the Committee with regard to the venue is
not a decision of a dispute or claim arising out of, or relating to the agreement
and, therefore, cannot partake the character of an award or an interim award.
Under Section 2(6) of the Arbitration and Conciliation Act, 1996, excepting
Section 28, parties are free to detennine certain issues and that freedom would
B
include the right of the parties to authorised any person including an institution
to detennine that issue. Secti~n 20 is the provision which sees that the parties
are free to agree on the place of arbitration and failing upon any agreement,
then under sub-section (2), it has to be detennined depending upon the
circumstances of the case and convenience of the parties. A conjoint reading
of Section 2(6) and Section 20, therefore leads to the conclusion that in the c
event. parties do not agree with regard to the place of arbitration, though they
were free to detenn ine the same, then they had the right to authorise any
"' person including an institution and in the case in hand, the Joint Committee
is such an institution for deciding the venue of the arbitration and such
decision of the Committee will not partake the character of adjudication of a D
dispute arising out of the agreement, so as to clothe it the character of an
award. Chapter V of the Act contains Section 18 to 27 and chapter VI deals
with making of arbiter award and tenn ination of proceedings which starts with
Section 28. The decision on the question of venue under Section 20 would
not come within making of an arbitral award starting from Section 28 and on
this view of the matter also, the said decision on the question of venue will E
not be either an award or an interim award so as to be appealable under
Section 34 of the Act. The decision of the Joint Committee on the question
of the venue under Clause 8.4 is not a decision, deciding legal rights of the
. parties under the contract. There is no mutuality and the said Committee is
merely a machinery for deciding the question of venue. Such a decision does F
not have the characteristics of an arbitration award nor even can it beheld to
be an interim award. The conclusion of the Joint Committee is a conclusion
on the guidelines contained in second part of Clause 8.4 of the agreement and
is not a judicial determination and as such the said conclusion would not
amount to an award. In K.K. Modi v. K.N. Modi & Ors., [1998] SCC 573, this
court considered the question as to whether Clause (9) of the Memorandum
G
-#<"
of understanding would constitute an arbitration agreement. The Court
answered the question in the negative after considering as to what would be
the attributes to be present for an agreement to be considered as an arbitration
agreement. Paragraph ( 17) of the aforesaid judgment is quoted herein-below
in extenso : H
(

1110 SUPREME COURT REPORTS [200 I] I S.C.R.

A "17. Among the attributes which must be present for an agreement
to be considered as an arbitration agreement are :

{I) The arbitration agreement must contemplate that the decision of
the tribunal will be binding on the parties to the agreement,

(2) that the jurisdiction of the tribunal to decide the right of parties
B must derive either from the consent of the parties or from an order of
the court or from a statute, the terms of which make it clear that the
process is to be an arbitration,

(3) the agreement must contemplate that substantive right of parties
will be determined by the agreed tribunal,
c
(4) that the tribunal will determine the rights of the parties in an
impartial and judicial manner with the tribunal owing an equal
obligation of fairness towards both sides,

(5) that the agreement of the parties to refer their disputes to the
D decision of the tribunal must be intended to been forceable in-law and
lastly,

(6) the agreement must contemplate that the tribunal will make a
decision upon a dispute which is already formulated at the time when
a reference is made to the tribunal." t
E The second part of clause 8.4 conferring powers on a Joint committee to
decide the question of venue of the arbitration does not satisfy the aforesaid
test laid down in Modi 's case and, therefore would not be an arbitration
agreement. Necessarily, therefore, the ultimate decision of the said Committee
on the question of venue cannot be held to be an award, so as to confer a
right of appeal to an aggrieved person under Section 34 of the Act. Russel
F
on Arbitration in paragraph 2.098 deals with the question of venue of
arbitration and the same is quoted herein-below in extenso :

""Ascertaining the seat. The place of arbitration is often specified in
the arbitration agreement, by the selection of a particular place or
country in which the arbitration is to be held. If the seat is not agreed
G
on by the parties, the matter may be resolved by the arbitration
institution or person the parties have agreed shou Id have the power
to designate the seat, or by the arbitral tribunal if the parties have
authorised the tribunal to do so. The rules of various arbitration
institutions contain a means of establishing the place of arbitration in
H the absence of express agreement by the parties. In all other cases,
SANSHIN CHEM. INDUS. 1•. ORIENTAL CARBONS AND CHEM. LTD. [PATTANAIK, J.] 1111

•' y it is necessary to look at the parties' agreement and· all the relevant
circumstances. A reference to arbitration under the English Arbitration
A

Acts would be construed as implying that English would be the place
of arbitration. Similarly, provisions in an arbitration agreement
stipulating for arbitration by a local tribunal or institution may indicate
the appropriate place of arbitration."
B
In the present case, the second part of Clause 8.4 of the agreement conceived
of the institution of Joint Committee,. which institution had the power to
decide with regard to the venue and such' decision of the said Joint Committee
cannot be held to be an award of a arbitral tribunal. In view of our analysis
OJI the different provisions of the agreement as well as the provisions of the
Act itself, we are unable to accept Mr. Desai's argument that the agreement
c
-.. conceived of two arbitral proceedings, one in relation to any dispute for the
venue and the other in relation to the dispute arising out of the agreement.

It would be appropriate for us to notice at this stage that respondent
No. 2 had intimated the Manager, Arbitration Department, Japan Commercial D
Arbitration Association that the parties had not been able to agree on the
place of arbitration within 30 days of the notice, calling upon theni to submit
the agreement and, therefore, the said Japan Commercial Arbitration
Association could nominate a Member to the Joint Arbitration Committee and
pursuant to the said communication from respondent No. 2 the Japan
Commercial Arbitration Association, appointed respondent No. 5 as its Member E
in the Joint Arbitration Committee by letter dated 25th of October, 1996. The
aforesaid conduct of the Japan Commercial Arbitration Association and the
unanimous decision of the Joint Arbitration Committee about the venue, is
also quite significant in the context of the dispute .
...
Besides, bearing in mind the object behind the Arbitration and F
Conciliation Act, I 996, as has been indicted by this Court in the case of
Konkan Railway Corpn. Ltd. & Ors. y. Mehual Construction Co., [2000] 7
SCC 201, which is in consonance with the UNClTRA model law, it would not
be conducive to interpret the decision of the Joint Arbitration Committee with
regard to the venue to be an interim award, conferring a right of challenge G
~ to an aggrieved person under Section 34 of the Act.

Mr. Desai's contention that the question of venue is of utmost
importance, since the arbitral proceeding will be conducted in accordance
with the rules applicable to the place where the arbitration proceeding is
conducted and consequently, denial of a right to appeal against the same is H
1112 SUPREME COURT REPORTS [200 IJ I S.C.R.

A never contemplated of, requires consideration. It is undoubtedly true that if
the arbitration is to be held in India, then the proceeding will be conducted
in accordance with the rules applicable in India and if the arbitrations is to
be held in Japan, it has to be conducted in accordance with the rules of Japan
Commercial Arbitration Association and as such the decision on the question
B of venue is of utmost importance. But the further contention that aggrieved
party has no right to assail the same, orice the said decision is not assailed
at this stage, does not appear to be correct. The ultimate arbitral award could
be assailed on the grounds indicated in sub-section (2) ofSection 34 and an
erroneous decision on the question of venue, which ultimately affected .the
procedure that has been followed in the arbitral proceeding could come within
C the sweep of Section 34 (2) and as such it cannot be said that an aggrieved
party has no remedy at all.

This appeal, accordingly fails and is dismissed.

K.K.T. Appeal dismissed.

t