[Cites 11, Cited by 0]
Gujarat High Court
M/S. Oyo Hotels And Homes Private ... vs M/S. Meridian Hotels Private Limited on 20 April, 2026
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/FA/960/2026 JUDGMENT DATED: 20/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 960 of 2026
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2026
In R/FIRST APPEAL NO. 960 of 2026
With
R/FIRST APPEAL NO. 962 of 2026
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2026
In R/FIRST APPEAL NO. 962 of 2026
With
R/CROSS OBJECTION NO. 69 of 2026
In
R/FIRST APPEAL NO. 962 of 2026
With
R/CROSS OBJECTION NO. 70 of 2026
In
R/FIRST APPEAL NO. 960 of 2026
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M/S. OYO HOTELS AND HOMES PRIVATE LIMITED
Versus
M/S. MERIDIAN HOTELS PRIVATE LIMITED
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Appearance:
R/FIRST APPEAL NO.960 of 2026:-
MR SAURABH SOPARKAR, SENIOR ADVOCATE WITH MS PRAGATI
PAHWA WITH MS KANICKA MITTAL, ADVOCATES FOR THAKKAR AND
PAHWA ADVOCATES(1357) for the Appellant(s) No. 1
PARAS K SUKHWANI(8284) for the Defendant(s) No. 1
R/FIRST APPEAL NO.962 of 2026:-
MR SAURABH SOPARKAR, SENIOR ADVOCATE WITH MS PRAGATI
PAHWA WITH MS KANICKA MITTAL, ADVOCATES FOR THAKKAR AND
PAHWA ADVOCATES(1357) for the Appellant(s) No. 1
PARAS K SUKHWANI(8284) for the Defendant(s) No.
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS.
JUSTICE SUNITA AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 20/04/2026
ORAL JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
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1. Both the above set of appeals under Section-37 of the
Arbitration and Conciliation Act' 1996 [in short as "the
Act'1996"] and cross-objections filed by the respondent/cross-
objector, are raising common issues and are between the
same parties, arising out of two separate judgments in two
proceedings under Section-34, passed by the Commercial
Court at City Civil Court at Ahmedabad. Hence, all the
matters have been heard together and are being decided by
this common judgment with the consent of the learned
counsels for the parties.
2. Mr. Saurabh Soparkar, learned senior counsel assisted
by Ms. Pragati Pahwa, learned advocate for the appellant in
the instant appeal, would submit that the cross-objections
filed by the respondent herein are not maintainable, inasmuch
as, the respondent has earlier filed an appeal under Section-
37 being First Appeal No.595 of 2026 to challenge the
findings of the Court in the impugned order under Section-34,
on the issue of territorial jurisdiction. The said appeal,
however, has been withdrawn by the order dated 26.02.2026
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on the request of the respondent, they cannot, therefore, be
permitted to maintain the cross-objections in the instant
appeal.
3. This submission will not detain us for long, inasmuch as,
on a bare reading of the order of withdrawal dated 26.02.2026
of First Appeal No.595 of 2026 filed by the respondent herein,
would indicate that liberty was granted to the appellant
therein/respondent herein to approach this Court at an
appropriate stage. In view of the liberty granted by this Court,
the cross-objections of the respondent herein cannot be
rejected as not maintainable.
4. Even otherwise, as per own submission of the learned
senior counsel for the appellant, the cross-objections are
maintainable in an appeal against the order of the Court
under Section-34, on an issue decided against the objector.
5. In view of the above, while holding that the cross-
objections filed by the respondent herein are maintainable, we
treat them as cross-appeals under Section-37 of the
Arbitration and Conciliation Act' 1996.
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6. We, therefore, proceed with the hearing of all the
appeals including cross-appeals filed by the parties.
7. Having heard learned counsel for the parties and
perused the record, pertinent is to note that the First Appeals
and the cross-objections are filed by the rival parties against
the judgment and order dated 09.02.2026 passed by the
Judge, Commercial Court, City Civil Court, Ahmedabad in
dismissing the application under Section-34 of the Act' 1996.
Insofar as the appeal filed by the appellant herein namely the
original applicant, who had filed the application under
Section-34 of the Act' 1996, the challenge is on the ground
that the commercial court once has decided the issue qua lack
of its territorial jurisdiction, it could not have proceeded to
decide on the merits of the application under Section-34 of the
Act' 1996. The submission is that only course open for the
Court under Section 34, was to return the application in
accordance with the provision of Order 7 Rule of Code of Civil
Procedure, leaving it open for the applicant to present it
before the competent court having territorial jurisdiction to
adjudicate the dispute.
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8. The submission in the cross-objections filed on behalf of
the respondent, on the other-hand, is about the correctness of
the impugned judgment on point no.1, on the issue of lack of
territorial jurisdiction, only. The submission is that in view of
the facts brought on record about the place of agreement,
execution and performance of agreement in question etc., the
City Civil Court at Ahmedabad had territorial jurisdiction to
adjudicate the application under Section-34. Moreover, the
agreement itself conferred the jurisdiction upon the said
Court by conferring the exclusive jurisdiction to the court at
Ahmedabad and deciding on the seat of arbitration. Moreover,
the appellants herein themselves filed application under
Section-34 of the Act' 1996 believing that the commercial
court at City Civil Court, Ahmedbad has territorial jurisdiction
to adjudicate.
9. It was vehemently argued by Mr. Paras K. Sukhwani,
learned advocate for the respondent in cross-objections that
both the dispute resolution Clause No.10.1 and the exclusive
jurisdiction Clause No.10.6 of the agreement in question
conferred jurisdiction to the Courts at Ahmedabad. The place
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of arbitration is the city of Ahmedabad and even the place of
signing of the award is also the city of Ahmedabad. The
submission is that once the parties had decided to confer
jurisdiction to the Civil Court at Ahmedabad, the commercial
court at City Civil Court was required to respect the choice of
the parties, keeping in mind the principles of party autonomy
incorporated in the entire scheme of the Arbitration and
Conciliation Act' 1996.
10. Moreover, the advocates of both the parties have filed
joint pursis before the Commercial Court stating that they had
no objection to the jurisdiction of the City Civil Court to
conduct the proceedings under Section-34 of the Act' 1996.
11. It was vehemently argued by the learned advocate for
the respondent that even the learned senior counsel
appearing for the applicant therein [before the City Civil
Court] had argued that the said court has territorial
jurisdiction, inasmuch as, (i) agreement in respect of the
property situated at Usmanpura and Ellisbridge, is entered
into, which is undoubtedly within the territorial jurisdiction of
the City Civil Court; (ii) the agreement was executed in
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Ahmedabad city and not within the jurisdictional area of
Ahmedabad Rural Court; and (iii) the agreement was to be
performed at Ahmedabad City and also breach was occurred
in the same area. In the context of the said undisputed fact
and in light of Clause Nos.10.1 and 10.6 of the agreement in
question, exclusive jurisdiction, lies with the Commercial
Court at City Civil Court at Ahmedabad and not to the Court
at Ahmedabad Rural.
12. The learned advocate appearing for the respondent/
cross-objector has repeatedly referred to the stand of the
applicant in its application as well the as the arguments made
before the City Civil Court asserting that the City Civil Court
has territorial jurisdiction to conduct the proceedings.
13. However, the fact remains that no dispute could be
raised about the findings returned by the commercial court in
Paragraph-19.1 of the judgment impugned, which reads as
under:-
"19.1 Now, on switching over the arbitration clause
as well as exclusive jurisdiction, there is mention of
Ahmedabad only. Now, in Ahmedabad two courts are
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working viz. City Civil Court which is present one and
Ahmedabad District (Rural) Court. To decide the
jurisdiction under section 34, cause of action is not
required to be seen. That means, section 20 which has
been reiterated by the Hon'ble Apex Court, in the case of
BGS SGS Soma JV (supra), that jurisdiction in the the
arbitral proceedings is a departure of section 20 of the
Code. Further, consent does not confer jurisdiction. Only
on the basis of the place on which the arbitration
proceedings were conducted, decides the jurisdiction of
the fora, by which an application under section 34 shall be
heard and disposed of finally as per section 10(3) of the
Commercial Courts Act, 2015. In the present case, it is
undisputed that the proceedings were conducted at the
residence of the Ld. Arbitrator, which is admittedly
outside the jurisdiction of this Court and even the same
facts were conceded by way of separate affidavit (in
application under Order VII, Rule 11 of the Code Exh.37).
Therefore, now the Commercial Court presided over such
place of arbitral proceedings shall alone have jurisdiction,
that means Ahmedabad District (Rural) Court. Therefore,
once the seat of arbitration is designated or determined,
ultimately, it could have only jurisdiction. At this juncture,
relevant head-note of the judgment, in the case of BGS
SGS Soma JV (supra)is very much important,
which is reproduced here-in-below:-
Thus, once the seat of arbitration is designated or
determined, the same operates as an exclusive
jurisdiction clause as a result of which only the courts
where the seat is located would have jurisdiction over
the arbitration, to the exclusion of all other courts, even
courts where part of the cause of action may have
arisen."
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14. We may also extract the relevant Clause Nos.10.1 and
10.6 of the agreement as under:-
"10.1 In the event of a dispute arising out of this
Agreement, the Parties shall confer and make a good faith
effort to settle the dispute. If the dispute cannot be settled
in three (3) days following the day of such conference,
then the Parties shall refer the dispute to a single
arbitrator who shall be mutually appointed. The
arbitration proceedings shall be governed by the
provisions of Arbitration and Conciliation Act, 1996. The
arbitration shall be held in English language only and the
seat of arbitration shall be in Ahmedabad.
10.6 Subject to Clause 10 above, all disputes relating to
this Agreement between the Parties shall be subject to
exclusive jurisdiction of Ahmedabad, Gujarat courts only."
15. From a careful reading of the relevant clauses of the
agreement relied by the learned advocate for the respondent/
cross-objector herein and the findings in the judgment
impugned with regard to the lack of territorial jurisdiction of
the City Civil Court, suffice is to note that the Commercial
Court has decided the issue of jurisdiction taking note of the
Clause Nos.10.1 and 10.6 of the agreement, wherein the
parties had agreed to the seat of the arbitration and further
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noticing that the place of arbitration being the residence of
the learned Arbitrator, which is outside the jurisdiction of the
Commercial Court at City Civil Court, it was decided that the
Commercial Court which has jurisdiction to supervise over the
place of arbitral proceeding, shall alone have jurisdiction,
which means the Ahmedabad (Rural) District Court.
16. The learned Commercial Court has concluded that once
the seat of arbitration has been designated or determined, it
should have been treated as conferring exclusive jurisdiction
to the Supervisory Court, by referring to the decision of the
Apex Court in the case of BGS SGS SOMA JV Vs. NHPC
Ltd., reported in (2020) 4 SCC 234.
17. Taking note of these findings of the learned Commercial
Court, pertinent is to note the peculiarity of the present case
where the City of Ahmedabad is bifurcated in two parts,
insofar as conferring jurisdiction to the original ordinary
Court of Civil jurisdiction is concerned. There are two courts,
namely the City Civil Court and Ahmedabad Rural Court
exercising territorial jurisdiction within their respective areas
notified by the State Government. The territorial jurisdiction
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of both the courts are, thus, clearly defined and bifurcated
and there is no dispute about the same.
18. The question in the present matter is as to which of the
two courts will have jurisdiction to decide the dispute in view
of Clause Nos.10.1 and 10.6 of the agreement, wherein the
parties have jointly conferred exclusive jurisdiction to the
courts at Ahmedabad.
19. A reading of Clause No.10.1 of the agreement, extracted
herein above, shows that the parties decided on the seat of
arbitration being in Ahmedabad. Whereas, the exclusive
jurisdiction clause states that all disputes relating to the
agreement between the parties shall be subject to exclusive
jurisdiction of Ahmedabad, Gujarat courts only.
20. It is, thus, clear that though the parties have decided on
the seat of the arbitration being in Ahmedabad in their
agreement, but they had not decided as to which of the two
courts having territorial jurisdiction in two different territorial
areas of the City of Ahmedabad would having supervisory
jurisdiction in the matter arising out of or in relation to the
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agreement or the arbitration proceedings conducted in
relation to the dispute under the agreement.
21. We may also note that the conferment of exclusive
jurisdiction related to the seat of Arbitration under Section-
20(1) of the Act' 1996 is with the consent of the parties. As
per the decision of the Apex Court in the case of BGS SGS
SOMA JV Vs. NHPC Ltd., once the parties decide on the seat
of arbitration, the exclusive jurisdiction would be conferred to
the Court which exercise the territorial jurisdiction over the
seat of arbitration.
22. However, as per Sub-section (2) of Section-20, in case
there being no agreement as per Sub-section (1) of Section-
20, the place of arbitration determined by the Arbitral
Tribunal having regard to the circumstances of the case
including convenience of the parties, shall be the seat of
Arbitration and exclusive jurisdiction clause accordingly,
would apply.
23. Sub-section (3) of Section-20 refers to only venue or the
place of arbitration which may be one or more than one
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depending upon the requirement of the proceedings of
arbitration which may held at one place or more than one.
24. In any case, once the Arbitrator decides on the place of
arbitration as per Sub-section (2) of Section-20, the same shall
also be treated as the seat of arbitration conferring exclusive
jurisdiction to the Court having territorial supervisory
jurisdiction of being ordinary original court of civil
jurisdiction.
25. In the instant case, the parties though decided on the
seat of arbitration being at Ahmedabad and the arbitration
proceedings have also been conducted at Ahmedabad, but
they seek to submit that there was no consensus of the parties
to confer jurisdiction to the courts at Ahmedabad (Rural) in
the City of Ahmedabad, rather the parties understood and
considered that the exclusive jurisdiction would be to the
Commercial Court at City Civil Court, Ahmedabad. The
submission is that once the parties had agreed to the said
aspect, it was not open for the Commercial Court at City Civil
Court to decide on the issue of territorial jurisdiction, as
against the intention of the parties.
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26. The submission of Mr. Paras K. Sukhwani, learned
advocate for the respondent/ cross-objector is that it is the
party autonomy which is to be considered as supreme in view
of the agreement entered into between them and also in light
of the fact that the applicant/ appellant themselves had filed
application under Section-34 before the Commercial Court at
City Civil Court and they also submitted that the said court
has jurisdiction.
27. Dealing with the said submission of the learned advocate
for the respondent/ cross-objector, we may note that this is
one of a peculiar case where one city is having two courts
which are exercising exclusive territorial jurisdiction over two
different areas being the ordinary original court of civil
jurisdiction. As per the agreement of the parties, the seat of
arbitration was fixed at Ahmedabad and the proceedings of
arbitration was also conducted in the city of Ahmedabad,
though at the place falling within the territorial jurisdiction of
the Court namely Ahmedabad (Rural) District Court lying
within the city of Ahmedabad itself.
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28. In the said scenario, the seat as stated in Section-20(1)
and 20(2) of the Act' 1996, would have to be fixed at the place
where the arbitration proceedings have been conducted by
the learned Arbitrator and the award has been signed and
declared.
29. In this scenario, in the peculiar facts and circumstances
of the present case, the territorial jurisdiction to adjudicate
over the arbitration proceedings would be to the Ahmedabad
(Rural) District Court being the ordinary original court of civil
jurisdiction, in view of the agreement between the parties
wherein they have decided on the seat of arbitration being
Ahmedabad.
30. The place of arbitration, in the instant case, would have
to be considered to be the seat of arbitration within the
meaning of Section-20(1) read with Section-20(2), in view of
the peculiar facts and circumstances of the present case. The
arbitral tribunal which has rendered the award being the
'arbitral tribunal' within the meaning of Section-2(1)(d) and
the Ahmedabad (Rural) District Court being the supervisory
court defined under Section-2(1)(e) read with Sections-20(1)
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and 20(2) of the Arbitration and Conciliation Act, 1996, solely
would have jurisdiction to adjudicate the dispute pertaining to
the validity of the arbitration proceedings. No error, as such,
can be found in the order impugned, qua the lack of
jurisdiction of the Commercial Court at City Civil Court,
adjudicated by the Court concerned.
31. Insofar as the submission of the learned advocate for the
appellant/cross-objector about the conferment of territorial
jurisdiction by referring to the properties subject matter of
agreement, execution and performance of the agreement in
question, the same become irrelevant in view of Clause
Nos.10.1 and 10.6 of the agreement in question read with
provisions of Section 20(1) and 20(2) of the Arbitration and
Conciliation Act' 1996.
32. At the cost of repetition, it is reiterated that, in the
instance case, the place of arbitration becomes the seat of
arbitration and in view of the exclusive jurisdiction conferred
by the parties in Clause Nos.10.1 and 10.6 of the agreement
signed by them and there being no contrary indicia, no
infirmity can be attached to the order passed by the
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Commercial Court at City Civil Court in holding that it lacks
territorial jurisdiction in respect of Section-34 proceedings.
33. However, once this was concluded by the commercial
court in the order impugned that it lack territorial jurisdiction
to conduct the proceedings, it clearly fell in error in entering
into the merits of the application under Section-34 of the Act'
1996. The only course open for the Commercial Court was to
return the application under Section-34 of the Act' 1996 to the
applicant for its presentation to the Court of Competent
territorial jurisdiction namely Ahmedabad (Rural) District
Court, at Ahmedabad.
34. In view thereof, while setting aside the judgment and
order dated 09.02.2026 passed by the Commercial Court, City
Civil Court, Ahmedabad in Commercial Civil Misc. Application
No.4 of 2024 and in Commercial Civil Misc. Application No.5
of 2024, both the applications under Section-34 of the
Arbitration and Conciliation Act' 1996 filed by the appellant
herein [in First Appeal No.960 of 2026 and in First Appeal
No.962 of 2026] are hereby revived. The Commercial Court at
City Civil Court at Ahmedabad, is directed to return the said
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applications in accordance with the provisions of Order 7 Rule
10 of Code of Civil Procedure to the applicant by adopting due
process. The applicant is at liberty to approach the competent
courts as per this decision.
35. With the above, all the appeals and the cross-objections
filed by the rival parties, stand disposed of.
Consequently, the civil applications for stay would not
survive and hence, the same are disposed of accordingly.
(SUNITA AGARWAL, CJ )
(D.N.RAY,J)
A. B. VAGHELA
