Introduction
The Supreme Court of India clarifies the relationship between exclusive jurisdiction clauses and determination of the seat of arbitration in a recent case. In M/S Activitas Management Advisor Private Limited v. Mind Plus Healthcare Private Limited (Civil Appeal of 2025 arising from SLP(C) No. 27714/2024), the court ruled that where a contract provides for the exclusive jurisdiction of a particular court (without indicating the “seat” of the arbitration), this jurisdiction of the court shall mean the seat of arbitration. This is significant for arbitration practice generally, including drafting contracts and objections to jurisdiction.
Background
The dispute arose out of an agreement dated July 9, 2023, between Activitas Management Advisor Private Limited (the appellant) a management consultancy company, and Mind Plus Healthcare Private Limited (the respondent). There was an arbitration clause in the agreement and there was a clause which stated: “client hereby submits to the exclusive jurisdiction of the Mumbai High Courts situated in Mumbai in connection with any dispute related to this letter or any of the matters contemplated thereby”. Clause 10 provided further that the disputes should be dealt with by a sole arbitrator following the procedure described in Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”) before an approach to the appropriate court.
Thereafter, disputes arose and the appellant applied to invoke Section 21 to request arbitration. The respondent appointed an arbitrator unilaterally and proceeded to file an application under Section 11 before the Punjab and Haryana High Court. The application was entertained and allowed, and the High Court appointed one arbitrator notwithstanding objections raised by the appellant regarding the exclusive jurisdiction clause providing for the determination of disputes before the Mumbai High Court.
Key Points
Interpretation of the Contract: The Court ultimately determined whether a clause that obligated a party to submit to the High Court of Mumbai’s exclusive jurisdiction also incorporated an exclusive territorial jurisdiction constituting the seat of arbitration, even in the absence of the terms seat or venue.
High Court’s Decision: The Punjab and Haryana High Court found an objection related to territorial jurisdiction to be baseless citing a prior judgment (ARB No.49 of 2023) and proceeded to appoint a sole arbitrator under Section 11(6) of the Act.
Legal Arguments
The appellant submitted that the disputes must be determined under the exclusive jurisdictional clause to the High court of Mumbai.
The respondent argued that the definition of “Court” under Section 11 of the Act permits invocation of jurisdiction before the High Court of Punjab and Haryana.
Supreme Court Description: The Supreme Court refers to Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., (2020) 5 SCC 462, where the court determined that where a contract provides jurisdiction in one court, then the provision gives jurisdiction to one court and apart from that court they mean to exclude all other courts.
The terms `seat’ or `venue’, are not expressly used the Supreme Court finds that the parties are entitled to also make exclusive jurisdiction provisions and that the exclusive jurisdiction must be interpreted in accordance with the principles of arbitration. The court finds that Mumbai was the seat of arbitration via the clause that provided for exclusive jurisdiction to the High Courts in Mumbai.
Recent Development
On August 5, 2025 the Supreme Court annulled the Punjab and Haryana High Court appointment of the arbitrator and ordered that the Appellant move forward with its section 11 application in the High Court of Mumbai, and that the Respondent would, at that point, have the opportunity to oppose that application in accordance with the law.
This case is a cautionary tale about carefully crafting jurisdiction clauses in your arbitration clauses. Courts may find them determinative of jurisdiction not only in terms of the location but also the seat of arbitration, with both procedural and substantive law implications.
Conclusion
The decision of the Supreme Court in the case of Activitas Management Advisor Pvt. Ltd. v. Mind Plus Healthcare Pvt. Ltd. resolved a significant issue in Indian arbitration law regarding the interpretation of exclusive jurisdiction clauses. The Court found that exclusive jurisdiction clauses revealed the seat of arbitration without even containing those specific words. This will contribute to more consistency regarding the seat of arbitration and greatly enhance the idea of party autonomy in the arbitral process. This ruling is binding and final and will assist parties to a contract in structuring their contractual arrangements and assist practitioners in making decisions regarding jurisdictional matters in the context of an arbitration proceeding.
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WRITTEN BY __ Kondala Phani Priya
