What is Section 20 of Arbitration and Conciliation Act

Section 20. Place of arbitration under Arbitration and Conciliation Act, 1996

CHAPTER V

Conduct Of Arbitral Proceedings

20. Place of arbitration. - (1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of 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 (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any 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.

Scope of Section 20 under Arbitration and Conciliation Act, 1996

Text of Section 20 makes it amply clear that as far as the place or seat of Arbitration is concerned in India, the parties are free to agree to any "place" or "seat" of choice within India. In cases where the parties do not have any agreement or consensus, Section 20(2) authorizes the arbitral tribunal to determine the place/seat of such arbitration. Section 20(3) enables the arbitration tribunal to hold hearings at any place for conducting hearings at a place of convenience in matters such as consultations among its members for hearing witnesses, experts or the parties.

Hon'ble Supreme Court of India in the Balco Employees Union (Regd.) Vs. Union of India & Ors (10 December 2001), 2001 Latest Caselaw 646 SC held that Part-I of the 1996 Act is applicable only to all the arbitrations which take place within India and as such have no application to International Commercial Arbitrations being held outside India. Hence, these awards would only be subject to the jurisdiction of the Courts in India when the same are sought to enforced in India in as per the provisions contained in Part-II of the Indian Arbitration Act.

The Supreme Court India in BALCO judgment has taken the stand that the Parliament has intentionally given jurisdiction to two set of courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was pertinent as there are several occasions when the agreement itself may provide for a place of arbitration at a venue which can be neutral to both the disputing parties. Accordingly, the Civil Courts of the place where the arbitration hearings happen shall have the jurisdiction and the supervisory control over the Arbitration.