Arbitration, Mediation and Conciliation · Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges

Place of Arbitration and Applicability of the Arbitration Act

Updated 11 October 2026 · Fact-checked

Under Section 20, parties are free to agree the place of arbitration. If they do not, the tribunal fixes it, having regard to the circumstances, including the convenience of the parties. The Act applies where the place is in India. Under Section 40, death of a party does not discharge the arbitration agreement.

Understand Place of Arbitration and Applicability of the Act

The place of arbitration is where the arbitration is legally anchored. It matters because Part I of the Act applies where the place of arbitration is in India (Section 2(2)). So the place you choose decides which law governs the arbitral process.

Section 20 gives a clear order of priority. First, the parties are free to agree the place. Second, if they have not agreed, the arbitral tribunal decides, having regard to the circumstances of the case, including the convenience of the parties. Party agreement always comes first.

Section 20(3) is separate. Unless the parties agree otherwise, the tribunal may meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspecting documents, goods or other property. Meeting somewhere else for these purposes does not change the place of arbitration.

For stock exchange arbitration, the disputes between investors and trading members are resolved under the exchange's bye-laws and rules, and the Arbitration and Conciliation Act, 1996 applies to them. Where the place is in India, Part I governs. The rules of the exchange are treated as part of the parties' agreement (Section 2(8)), so the exchange's own arrangements on place and procedure bind the parties. Section 2(4) also applies Part I, with stated exceptions, to statutory arbitrations under other enactments.

Section 40 deals with death. An arbitration agreement is not discharged by the death of any party, either as respects the deceased or any other party. It is enforceable by or against the legal representative. The mandate of an arbitrator is not terminated by the death of the party who appointed him. Section 40(3) saves any law under which a right of action is extinguished by death. Section 2(1)(g) defines legal representative.

Key rules to remember

Section 20(1): Place of arbitration = place agreed by the parties; Parties are free to agree. This is the first test.
Section 20(2): No agreement → tribunal decides, having regard to circumstances, including convenience of parties; Applies only when parties have not agreed.
Section 20(3): Unless otherwise agreed, tribunal may meet at any place it considers appropriate for consultation, hearing or inspection; Does not shift the place of arbitration.
Section 2(2): Part I applies where the place of arbitration is in India; Proviso extends Sections 9, 27 and 37(1)(a) and 37(3) to international commercial arbitration seated outside India, subject to contrary agreement.
Section 40(1): Death of a party ≠ discharge of arbitration agreement; Enforceable by or against the legal representative.
Section 40(2): Death of appointing party ≠ termination of arbitrator's mandate; Mandate continues.
Section 40(3): Laws extinguishing a right of action on death are not affected; Personal rights that die with the person may still end.

How to solve Place of Arbitration and Applicability of the Act questions

Use this sequence for any case question on place, applicability or death of a party.

1Identify the facts: who the parties are, what the agreement or exchange rules say, and where proceedings are held or proposed.
2Check for an agreed place. If the agreement or the applicable rules fix the place, Section 20(1) decides it.
3If there is no agreement, apply Section 20(2): the tribunal decides, considering the circumstances and convenience of the parties.
4Separate place from meetings. Under Section 20(3), meetings elsewhere for consultation, hearings or inspection are allowed unless the parties agreed otherwise.
5Test applicability: if the place is in India, Part I applies under Section 2(2). Note that the exchange rules form part of the agreement under Section 2(8).
6If a party has died, apply Section 40: the agreement survives, the legal representative steps in, and the arbitrator's mandate continues. Check Section 40(3) for rights that die with the person.
7Write a conclusion that answers the exact question asked.

Quickest way: Agreed? Tribunal? Died? three-check method

When to use it: When time is short and the question is a short fact pattern.

Check 1: Did parties agree the place? If yes, that is the place (Section 20(1)).
Check 2: If not, the tribunal decides on circumstances and convenience (Section 20(2)). Hearing elsewhere is allowed under Section 20(3).
Check 3: Did a party die? Agreement continues, legal representative is bound and entitled, mandate not terminated (Section 40).
Close with the section numbers and one-line conclusion.

Common mistakes in Place of Arbitration and Applicability of the Act

Saying the tribunal always chooses the place.
Students remember the tribunal's power and forget it is a fallback.
Fix: Write the order: parties' agreement first, tribunal only if there is no agreement.
Treating a hearing at another city as a change of place of arbitration.
Section 20(3) is confused with Section 20(1) and (2).
Fix: State that Section 20(3) lets the tribunal meet elsewhere for consultation, hearings or inspection, without changing the place.
Saying the arbitration agreement ends when a party dies.
Students apply the contract rule that personal contracts end on death.
Fix: Quote Section 40(1): the agreement is not discharged and is enforceable by or against the legal representative.
Forgetting that Section 40(3) preserves laws extinguishing a right of action on death.
Students memorise only the first two sub-sections.
Fix: Add one line: where some law extinguishes the right of action on death, Section 40 does not save it.
Claiming Part I applies to every arbitration regardless of place.
Section 2(2) and its proviso are skipped.
Fix: State that Part I applies where the place is in India, with the proviso for certain sections in international commercial arbitration seated abroad.

Worked examples

Example 1

Mehta Securities Ltd., a trading member, and Rohan, an investor, have a dispute. Their agreement says arbitration will be at Mumbai. The tribunal finds it easier to record Rohan's witness evidence in Pune. Rohan argues the place of arbitration has now changed to Pune. Advise.

Show the solution

Provision: Section 20(1) lets the parties agree the place. Section 20(3) lets the tribunal meet at any place it considers appropriate for hearing witnesses, unless the parties agreed otherwise.
Facts: the parties agreed on Mumbai. Pune is only proposed for recording evidence.
Analysis: a hearing in Pune falls under Section 20(3). It does not alter the agreed place under Section 20(1). Nothing suggests the parties agreed otherwise.
Applicability: the place remains in India, so Part I applies under Section 2(2).

Answer: The place of arbitration remains Mumbai. The tribunal may hold the witness hearing in Pune under Section 20(3), and Rohan's argument fails.

Example 2

Sharma, an investor, referred a dispute with a broker to arbitration under the exchange's rules and appointed an arbitrator. Before the award, Sharma died. The broker says the arbitration agreement has lapsed. Decide.

Show the solution

Provision: Section 40(1) says an arbitration agreement is not discharged by the death of any party, and is enforceable by or against the legal representative.
Section 40(2): the mandate of an arbitrator is not terminated by the death of the party who appointed him.
Facts: Sharma died, and he appointed the arbitrator.
Analysis: the agreement survives and Sharma's legal representative can continue or be proceeded against. The arbitrator's mandate continues.
Caveat: under Section 40(3), if any law extinguishes the right of action on death, that law is not affected. Check whether the claim is of that kind.

Answer: The broker's contention is wrong. The agreement is not discharged, the legal representative takes Sharma's place, and the arbitrator's mandate continues, subject to Section 40(3).

Exam tips

Write the section number with each rule. Examiners reward the provision-analysis-conclusion structure.
In place questions, always state the order: agreement, then tribunal, and mention Section 20(3) separately.
In death questions, cover all three limbs of Section 40 and the legal representative.
Link to stock exchange context by noting that the exchange's rules form part of the agreement under Section 2(8).
Use the exact phrase of the Act where possible, such as convenience of the parties.

Practice questions from Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges

Place of Arbitration and Applicability of the Act: frequently asked questions

What does Section 20 of the Arbitration and Conciliation Act say?

Parties may agree the place of arbitration. If they do not, the tribunal decides having regard to the circumstances, including the convenience of the parties. The tribunal may also meet elsewhere for consultation, hearings or inspection unless the parties agree otherwise.

Does the death of a party end the arbitration agreement?

No. Section 40(1) says the agreement is not discharged by death. It can be enforced by or against the legal representative. Section 40(3) preserves any law that extinguishes a right of action on death.

Is Section 20 about place or seat?

Section 20 uses the term place of arbitration. Section 2(2) applies Part I where the place is in India. Study the separate seat and venue topic to see how courts treat these terms.

Does the Arbitration Act apply to stock exchange arbitration?

Yes, where the place of arbitration is in India, Part I applies. The exchange's rules are treated as part of the parties' agreement under Section 2(8).