Court Upholds Priority of Broker Terms Over User Agreement, Rejects Respondent's Claim of Singapore Arbitration Seat; Arbitration to Proceed Under Indian Law
In a significant ruling on October 19, 2026, the Bombay High Court, presided by Justice Amit Borkar, appointed a sole arbitrator to adjudicate a dispute between Angellic Info Tech Private Limited (Applicant) and Zanmai Labs Private Limited (Respondent) concerning the withdrawal of virtual digital assets from a broker account on the WazirX platform.
The dispute arose when the Applicant was unable to withdraw virtual digital assets valued at over USD 261,967 from its designated wallet on the Respondent's crypto exchange platform. The Applicant sought arbitration under the Broker Terms, which formed an integral part of the parties' User Agreement but contained a clause giving the Broker Terms precedence in case of conflict.
The Respondent contended that the User Agreement, dated August 1, 2023, mandated arbitration under the Singapore International Arbitration Centre (SIAC) rules with Singapore as the seat, thereby excluding the jurisdiction of Indian courts and the applicability of the Broker Terms' arbitration clause.
Rejecting this contention, the Court emphasized the express clause in the Broker Terms stating their priority over the User Agreement in case of conflict. The Court observed that the dispute was directly connected to the broker account activities governed by the Broker Terms, making their arbitration clause applicable.
Further, the Court held that Clause 10 of the Broker Terms, which mandated arbitration under Indian law and granted exclusive jurisdiction to Mumbai courts, effectively designated Mumbai as the juridical seat of arbitration. This interpretation aligned with the principle that an exclusive jurisdiction clause, when read with the arbitration clause, can indicate the seat of arbitration even if the term "seat" is not expressly mentioned.
The Respondent also raised objections based on ongoing restructuring proceedings before the Singapore High Court, claiming the digital assets were part of a scheme that would override the arbitration agreement. The Court found this claim insufficient at the interlocutory stage, noting that the effect of such proceedings must be determined by the arbitral tribunal based on complete evidence.
Relying on Supreme Court precedents mandating minimal judicial intervention at the arbitrator appointment stage, the Court found a prima facie arbitration agreement existed in the Broker Terms. Consequently, it appointed Mr. Dormaan Dalal, Advocate, as the sole arbitrator to proceed with the dispute resolution in Mumbai under Indian Arbitration and Conciliation Act, 1996.
The Court directed the parties to cooperate with the arbitrator and equally share arbitral costs initially, leaving all substantive questions, including liability and the impact of the Singapore restructuring scheme, open for the arbitrator's determination.
This judgment clarifies the interplay between multiple agreements containing arbitration clauses, prioritizing express contractual provisions on conflict resolution, and affirms the jurisdiction of Indian courts and arbitration under Indian law in disputes involving crypto asset transactions on Indian platforms.
Bottom Line:
Arbitration and Conciliation Act, 1996 Section 11(6) Where Broker Terms formed integral part of User Agreement and expressly provided that in case of conflict Broker Terms would prevail, arbitration clause in Broker Terms governed disputes relating to broker account and withdrawal of crypto assets - Clause providing arbitration under Indian law and exclusive jurisdiction of Mumbai courts indicated Mumbai as juridical seat - Sole arbitrator appointed.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 11(6), Section 11(6-A), Section 11(8), Section 12(1)
