Supreme Court Arbitration | Delivery Of Award To Govt Official Not Connected With Case Doesn't Amount To Valid Service On State : Supreme Court Cause Title: M/S. MOTILAL AGARWALA Versus STATE OF WEST BENGAL & ANR. Citation : 2025 LiveLaw (SC) 867 The Supreme Court has clarified that when the government or one of its departments is a party to arbitration, delivery...
Supreme Court
Arbitration | Delivery Of Award To Govt Official Not Connected With Case Doesn't Amount To Valid Service On State : Supreme Court
Cause Title: M/S. MOTILAL AGARWALA Versus STATE OF WEST BENGAL & ANR.
Citation : 2025 LiveLaw (SC) 867
The Supreme Court has clarified that when the government or one of its departments is a party to arbitration, delivery of an arbitral award to an official who is not connected with or aware of the proceedings cannot be treated as valid service for commencing the limitation period to challenge the award.
Citing its ruling of Union of India vs. Tecco Trichy Engineers & Contractors (2005), the Court said that the delivery of the copy of the arbitral award should be made to the “party to the proceedings”, and if government is part to the proceedings than the delivery should be made to an individual who has the knowledge and is the best person to understand and appreciate an award and more particularly, to take decision for its challenge.
“This Court has held that the award should be received in the context of huge organisations by the person who has knowledge of the proceedings and who would be the best person to understand and appreciate the arbitral award as also to take a decision in the matter of moving appropriate applications.”, the court said.
A bench of Justice JB Pardiwala and Justice KV Viswanathan heard the case where the dispute arose after an arbitral award was passed on 12 November 2013 in favor of the Appellant. A signed photocopy of the award was collected by an Assistant Engineer of the Respondent's State Irrigation Department. Based on this, the award-holder argued that the State was bound to file its challenge within 90 days, i.e., by 12 February 2014.
S. 37(1)(a) Arbitration Act | Clause Restricting Interest On Delayed Payments By Itself Won't Bar Pendente Lite Interest : Supreme Court
Cause Title: OIL AND NATURAL GAS CORPORATION LTD. VERSUS M/S G & T BECKFIELD DRILLING SERVICES PVT. LTD.
Citation : 2025 LiveLaw (SC) 868
The Supreme Court on Tuesday (Sep.2) observed that an Arbitral Tribunal can grant pendente lite interest unless expressly or impliedly barred in the contract. It added that a contractual clause barring interest on delayed payments does not prevent an arbitral tribunal from awarding pendente lite interest, i.e., the interest for the period during which the arbitration is pending.
“…arbitral tribunal can be denuded of its power to award pendente lite interest only if the agreement/ contract between the parties is so worded that the award of pendente lite interest is either explicitly or by necessary implication (such as in the case of Sayeed & Co. (supra) and THDC First (supra)) barred. A clause merely barring award of interest on delayed payment by itself will not be readily inferred as a bar to award pendente-lite interest by the arbitral tribunal.”, the court observed.
A bench of Justices PS Narasimha and Manoj Misra dismissed the ONGC's appeal, affirming the Gauhati High Court's decision, which justified the grant of pendente lite interest as there was no clause barring the award of pendente lite interest.
Arbitration | Execution Of Award Cannot Be Stalled Merely Due To Pendency Of Section 37 Appeal : Supreme Court
Cause Title: CHAKARDHARI SUREKA VERSUS PREM LATA SUREKA THROUGH SPA & ORS.
Citation : 2025 LiveLaw (SC) 919
The Supreme Court held that the execution of an arbitral award cannot be stalled merely on the ground that an appeal under Section 37 of the Arbitration and Conciliation Act is pending.
A bench of Justices Manoj Misra and Ujjal Bhuyan heard the case where the appellant (award-holder/decree-holder) sought execution of the arbitral award. The respondents (judgment-debtors) argued that since a Section 37 appeal was pending against the dismissal of their Section 34 objections, the execution should be deferred.
“In our view, the question of executability of the award can be gone into by the Execution Court in accordance with law while addressing objections as and when raised. However, it would not be proper for the Execution Court to defer consideration of the execution application and the objections thereto only because an appeal is pending under Section 37 when there is no interim order operating against the award against which objection under Section 34 of the Act stands rejected.”, the court observed.
S. 31(7)(b) Arbitration Act | Claim For Additional Post-Award Interest Barred When Award Fixes Rate Until Payment : Supreme Court
Cause Title: HLV LIMITED (FORMERLY KNOWN AS HOTEL LEELAVENTURE PVT. LTD.) VERSUS PBSAMP PROJECTS PVT. LTD.
Citation : 2025 LiveLaw (SC) 944
The Supreme Court on Wednesday (Sep. 24) held that if an arbitral award provides a composite interest rate covering the entire period from the cause of action to payment, the award holder cannot claim additional compound interest at the post-award stage under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 (“Act”).
Section 31(7)(b) of the Act provides for post-award interest at 18% from the date of the award until payment. However, if the arbitral award specifies a composite rate of interest, the award holder cannot claim additional 18% compound interest under this provision. In such cases, the interest is governed solely by the rate in the award, as Section 31(7)(b) applies “unless the award otherwise directs.” In this case, the award expressly set interest at 21% until repayment, therefore the question of awarding post-award interest would not arise, the court said.
The dispute arose from a Memorandum of Understanding (MoU) for the sale of land. Under Clause 6(b) of the MoU, the appellant had agreed to refund an advance paid by the respondent, along with interest at 21% per annum from the dates of disbursement until actual repayment, in case of termination.
The arbitral tribunal, respecting this contractual term, awarded a composite interest @21% per annum from the date of advance until repayment. However, during execution, the decree-holder claimed entitlement to compound interest @18% ("interest upon interest") by invoking Section 31(7)(b) of the Act and placing reliance on Hyder Consulting (UK) Ltd. v. Governor, State of Orissa, (2015) 2 SCC 189. The Executing Court rejected this claim, but the High Court remanded the matter, leading to the present appeal before the Supreme Court.
Arbitral Award Must Be Within Parameters Of Agreement Between Parties : Supreme Court Dismisses Chinese Company's Appeal
Cause Title: SEPCO ELECTRIC POWER CONSTRUCTION CORPORATION VERSUS GMR KAMALANGA ENERGY LTD.
Citation : 2025 LiveLaw (SC) 963
The Supreme Court has recently upheld the setting aside of an arbitral award of nearly ₹995 crore granted in favour of Chinese company SEPCO Electric Power Construction Corporation, holding that the arbitral tribunal had erred by re-interpreting contractual terms and departing from the agreed stipulations in violation of Section 28(3) of the Arbitration and Conciliation Act, 1996.
“Numerous precedents laid down by this Court have often emphasised that an arbitrator lacks the power to deviate from or to reinterpret the terms of the contract while making an award. The awards must be within the parameters of the agreement entered between the parties.”, the Court said.
A bench of Chief Justice of India BR Gavai and Justice AG Masih heard the case where the contractual terms do not allow waiver of notice for raising claims unless the parties have agreed to it in written form. After SEPCO left the construction site in 2015, arbitration followed, and in 2020, the tribunal awarded SEPCO ₹995 crore, holding that GMR Kamalanga Energy Ltd had waived notice requirements via a 2012 email. The Orissa High Court's Division Bench set aside the award, prompting SEPCO's appeal to the Supreme Court.
High Courts
Allahabad High Court
Writ Petition Can Be Converted To Appeal U/S 37 Of Arbitration Act If It Does Not Prejudice Respondents: Allahabad High Court
Case Title – Union of India v Bhular Construction Company & Others
Case No. – Matters under Article 227 No. – 8841 of 2023
The Allahabad High Court Bench of Justice Manish Kumar Nigam allowed the conversion of a writ petition under Article 227, Constitution of India (“COI”) into an appeal under Section 37, Arbitration and Conciliation Act (“ACA”) noting that where a particular kind of proceeding is not maintainable and a different kind of proceeding lies in respect thereof before the Court, the Court has jurisdiction to convert one into other subject to law relating to limitation and court fees.
The Court relied on its previous judgment in Kailash Chandra v. Ram Naresh Gupta wherein it was held that conversion of a revision into a writ petition under Article 226/227 was permissible. In view of the same, the Court observed that there was no impediment in conversion where a particular kind of proceeding is not maintainable and a different kind of proceeding lies in respect thereof.
S.11 A&C Act | Respondent's Letter Seeking Petitioner To Give Up Interest On Outstanding Amount Indicates Ongoing Dispute: Allahabad HC
Case Name: M/S Assam Dental Supply Co. Through Its Proprietor Sr Manoj Jhingren v. Director General, Medical And Health Services, Uttar Pradesh Swasthya Bhawan, Lucknow And Another
Case Number: Civil Misc. Arbitration Application No. - 17 Of 2025
The Allahabad High Court bench of Justice Jaspreet Singh, while hearing a Section 11 petition under the Arbitration Act, observed that the letter of the Respondent addressed to the Petitioner, requiring them to give up their interest claim on the outstanding amount, showed that the claims were still under consideration. Therefore, the Claims cannot be termed dead, and the Section 11 petition is well within the limitation period.
The parties had exchanged multiple letters concerning the release of the payment. The correspondence continued till June 2023, after which the Petitioner issued the notice dated 14.11.2024 invoking arbitration. The present Petition u/s 11(6) of the A&C was filed on 13.02.2025. Since August 2008, when a part payment was made to the Petitioner, till 2021, there has not been much communication between the parties. However, since October 2021, the Respondent has required the Petitioner to furnish an affidavit to give up the interim claim on the outstanding amount. The letter indicates that the Petitioner's claim is still under consideration.
The bench observed that the Section 11 petition is within the limitation period. The objection concerning the claims being time-barred relates to the case's merits, and the Section 11 Court is not required to examine the same. In light of the above discussion, the Court allowed the Section 11 petition and appointed HMJ O.P. Srivastava (Retd.) as the sole arbitrator to adjudicate the dispute.
Rejecting Appeal U/S 34 A&C Act On Grounds Of Jurisdiction Without Indicating Alternate Remedy Amounts To Refusal To Set Aside Award: Allahabad HC
Case Title: Jaiprakash Associates Limited Versus High Tech Tyre Retreaders Pvt. Ltd. and another [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 112 of 2025]
Recently, the Allahabad High Court has held that rejecting an appeal under Section 34 of the Arbitration and Conciliation Act on grounds of lack of jurisdiction without providing alternate remedy amounts to refusing to set aside award, making such order appealable under Section 37 of the Act.
Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 provides for appeals against orders setting aside or refusing to set aside an arbitral award under Section 34 of the Act.
In Chintels India Limited Vs. Bhayana Builders Private Limited, the Apex Court had held that order refusing condonation of delay was an order refusing to set aside the award and was appealable under Section 37(1)(c) of the Act and discussed the 'effect doctrine' by referring to its earlier judgment in ESSAR Constructions Vs. N.P. Rama Krishna Reddy.
Relying on the aforesaid, the bench lead by Chief Justice Bhansali held that
“it would be seen that the effect of the order passed by the Court under Section 34 of the Act is required to be seen for the purpose of examining the maintainability of the appeal under Section 37(1)(c) of the Act as to whether the order passed leaves any other avenue for the applicant to seek redressal against the award or the order passed puts an end to the challenge laid to the award passed by the Arbitral Tribunal, which in the present case is the Council.”
It held that order of dismissal refusing to condone delay was not on the same footing as a order returning appeal to be presented before appropriate forum and the effect of the order needs to be seen for maintainability of the appeal.
Bombay High Court
Individual Flat Owners Forming Cooperative Society Are Bound By Arbitration Clause Contained In Sale Agreement: Bombay High Court
Case Title – Shivranjan Towers Sahakari Griha Rachana v Bhujbal Constructions
Case No. – Writ Petition No. 11281 Of 2025
The Bombay High Court bench of Justice N.J. Jamadar has observed that when individual flat owners form a cooperative society to enforce rights created in favour of the individual members under the Agreements for Sale, the society cannot claim that it is not bound by the arbitration clause contained in those Agreements. The argument that it is not a signatory to the Agreements for Sale is untenable and such society is not a third party to the arbitral proceedings.
The Court held that the submission by Petitioner's Counsel that Deed of Deemed Conveyance did not contain an arbitration clause and thus arbitration proceedings could not be initiated against it, lacked merit. The Court explained that an arbitration agreement was a creature of contract, however the unilateral Deed of Deemed Conveyance by its very nature was not an instrument inter-vivos. Such a deed would not incorporate an arbitration clause which is an expression of the consensual decision to resolve the dispute by a forum of choice.
Regarding the issue that the Petitioner society was not a signatory to the Agreement for Sale, the Court held that it could not have been a signatory as it was yet to be formed and so the issue could not be determined only on the premise that the Petitioner was not a signatory to the Agreement for Sale which contained the Arbitration Clause.
Based on the statutory provisions contained in the Maharashtra Co-operative Society Act, 1960 and judicial precedents, the Court observed that the registration of a society shall render it a body corporate with power inter alia to sue and be sued in its name.
Calcutta High Court
Counterclaim In Arbitration Cannot Be Allowed After Commencement Of Claimant's Evidence: Calcutta High Court
Case Title: Gayatri Granites & Ors. VS. Srei Equipment Finance Ltd.
Case Number: C.O. 2449 of 2025
The Calcutta High Court bench of Justice Hiranmay Bhattacharyya has held that a counterclaim in arbitration proceedings cannot be allowed after the commencement of the claimant's evidence, as doing so would cause serious injustice to the other party.
The present petition has been filed under Article 227 of the Indian Constitution against an order passed by Arbitrator by which an application seeking amendment in the Statement of Defence (SoD) to include a counterclaim was rejected.
The court observed that upon a reading of Section 23 as a whole and more particularly Subsection 2A, it is evident that no time limit has been prescribed within which the respondent may submit a counter claim. The only limitation for submitting a counter claim as provided in sub-section (2A) is that the same shall have to fall within the scope of arbitration agreement. It further observed that a counter claim can be raised with the written statement, through its amendment and by subsequent pleadings. However, the cause of action for filing the counter claim must arise either before or after filing of the suit but in any case it must not arise after the defendant has delivered his written statement or the time period for filing the written statement has expired.
Court Hearing Appeal U/S 37 A&C Act Can Direct Furnishing Of Security Even Without Application U/S 9: Calcutta HC
Case Title: BEEVEE ENTERPRISES & ORS. VERSUS L & T FINANCE LIMITED
Case Number: APOT 208 OF 2025 IA NO. GA 1 OF 2025
The Calcutta High Court bench of Justice Arindam Mukherjee has held that while disposing of an appeal under Section 37 of the Arbitration Act, the Court is empowered under Order 41 of the Civil Procedure Code, 1908 (CPC) to impose conditions and direct the respondent to furnish security for the loan as per the Agreement, even in the absence of a formal application under Section 9 of the Arbitration Act, since such a course does not contravene any of the provisions of the Act.
The court noted that the arbitration clause gives exclusive power to the lender to appoint the arbitrator without any participation of the borrower. In the clause, no specific arbitrator has been named granting absolute authority to the lender to appoint the arbitrator through its Principal Officer. However, as per section 12(5) of the Arbitration Act read with fifth schedule and the Supreme Court's judgments in TRF Limited and Perkins, a Principal Officer is ineligible to appoint an arbitrator due to a direct connection with the party. Therefore, the appointment was void.
Plea Against Misuse Of Digital Signature Does Not Amount To Denying Existence Of Arbitration Agreement: Calcutta High Court
Case Title – Sunita Gupta v Ms URGO Capital Limited & Ors.
The Calcutta High Court Bench of Justice Krishna Rao, while referring parties to arbitration, has observed that if the Plaintiff alleges that its digital signatures were used without its consent, such an allegation of fraud does not amount to a denial of the existence of the arbitration agreement.
The Court analysed the loan documents to assess the contention of the Plaintiff that their signatures were obtained by fraud and their digital signatures were used without their consent. The Court observed that in the sanction letter dated 25.07.2023, the name of the Plaintiffs appeared as co-applicants nos.3,4 and 5. In the schedule of term, Vedanta Limited was recorded as the principal borrower and the names of Defendant No.3 along with Plaintiffs was also mentioned.
The Court observed that the Plaintiffs had only taken the ground of fraud that Defendant No.3 had misused the OTP provided by the Plaintiffs and the said OTP was used for digital signatures of the plaintiffs to which the Plaintiffs had never consented. Defendant No.3 was not denying the agreement.
Delhi High Court
Case Title – BHEL v. Xiamen Longking Bulk Material Science and Engineering Co.
Citation: 2025 LiveLaw (Del) 1062
The Delhi High Court Bench of Justice Jasmeet Singh while allowing a petition under Section 34, Arbitration and Conciliation Act (“ACA”) observed that when the contract required the bidder to establish an office in India as a pre-requisite to performance, the decision by the Arbitrator holding that compliance could be deferred, amounted to rewriting the contract. Such a holding violated fundamental policy of Indian law and the award was liable to be set aside.
The Court observed that Clause 1, PEM which was part of the bid of the Respondent and was accepted by the Petitioner, contained clear undertakings by the Respondent to open an office in India and an Indian Bank Account before the commencement of the execution of the Indian component of the contract. This was not a mere formality but it was central to compliance with the RBI guidelines.
The Court further observed that from a conjoint reading of the PEM, LoA and GCC leaves no scope for payment to any unrelated third party or for waiver of the local office/bank account requirement without the consent of the Petitioner. The finding of the Arbitrator that the requirement to establish a project office and bank account could be deferred until after drawing approval and even substituted by the use of a third party's bank account, was a direct departure from the contractual framework agreed to between the parties. Additionally, the Respondent had never denied the obligation of opening an Indian office and bank account but only highlighted its inability to do so.
Independent Panel Of Arbitrators Not Curated By Either Party Cannot Be Challenged On Grounds Of Impartiality: Delhi High Court
Case Title: M/s. KNR Tirumala Infra Pvt. Ltd. versus National Highways Authority of India
Citation: 2025 LiveLaw (Del) 1068
The Delhi High Court bench of Justice Jasmeet Singh has held that when the panel of arbitrators from which appointments are to be made is broad-based, comprising retired Supreme Court Judges and other eminent officials, and is independent, not controlled by any party, the other party cannot refuse to abide by the institutional rules it has consciously agreed to, on the ground that the panel is not impartial.
The court observed that through a circular amendment in the SAROD Rules, it was provided that obtaining membership is not a mandatory precondition for invoking arbitration under its Rules. Non-members are equally entitled to initiate arbitration and participate in proceedings under the SAROD framework. Thus, the very mischief that was sought to be addressed in Rani Constructions (supra) has been remedied.
It further observed that the principles laid down in CORE II are not applicable to the facts of the present case as the contractor's choice in CORE II was restricted to two names from a list of Railway Officers while the General Manager retained an exclusive control to appoint other arbitrators giving one party dominant control. This clause was struck down by the Supreme Court. In contrast, the Appointment of Arbitrators under SAROD or ICA is made under independent rules from a neutral panel.
Absence Of Word 'Seat' Does Not Oust Court's Jurisdiction Conferred By Arbitration Agreement: Delhi High Court
Case Title: SNS ENGINEERING PVT. LTD. versus M/S HARIOM PROJECTS PVT. LTD. AND ANR.
Citation: 2025 LiveLaw (Del) 1084
The Delhi High Court bench of Justice Jasmeet Singh has held that absence of the word 'seat' does not strip the court of its exclusive jurisdiction to decide disputes arising out of an arbitration agreement.
This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“1996 Act”) seeking appointment of an Arbitrator for adjudication of disputes between the parties arising out of the Work Order/ Acceptance Letter dated 21.10.2021.
The Court observed that in the present case, clause 14 of the Acceptance Letter clearly provides that in case of any dispute arising out of or in connection with the Letter, the dispute shall be decided by the Ahmedabad Court. Therefore, the coutt at Ahmedabad has jurisdiction to entertain the application under section 11(6) of the Arbitration Act and appoint the arbitrator.
It further observed that “While interpreting such exclusive jurisdictional clauses it must be borne in mind, that when parties agree in the arbitration clause/ agreement to vest exclusive jurisdiction in a particular Court for adjudication of any disputes thereof, it is to be presumed that they intended that Court only to have supervisory control.”
Arbitration Clause In Loan Agreement Becomes Incorporated In Deeds Of Guarantee When Both Form Part Of Single Transaction: Delhi HC
Case Title – Intec Capital Limited v Shekhar Chand Jain
Citation: 2025 LiveLaw (Del) 1090
The Delhi High Court Bench of Justice Jasmeet Singh has observed that contemporaneously executed Loan Agreement and Deeds of Guarantee, where the intent of the parties to incorporate the Loan Agreement into the Deeds of Guarantee is clear, the Guarantor although a non-signatory to the Loan Agreement, becomes bound by the arbitration clause in the Loan Agreement.
The Court observed that since the fact that the Loan Agreement contained an arbitration clause and that the Respondents had not signed the Loan Agreement were undisputed, the main issue for consideration was whether the arbitration clause in the Loan Agreement could be said to have been incorporated into the Deeds of Guarantee.
The Court observed that the distinction between “general reference” to another contract and “incorporation by specific reference” laid down in M.R. Engineers was relevant to the present case. In the said case, the Apex Court had held that a general reference to another document would not incorporate the arbitration clause of that document, unless the reference is specific to the arbitration clause or the entire document is expressly incorporated. Thus, the Court observed that the test is whether there is clear intention of the parties to import the arbitration clause.
Usage Of Disputed Trademark Even After Filing Of Challenge Would Cause Serious Confusion To Public: Delhi High Court
Case Name: M/S Azure Hospitality Private Limited v. Amit Bhasin, Proprietor Of Retail India Solutions
Citation: 2025 LiveLaw (Del) 1115
The Delhi High Court division bench of Justice Prathiba M. Singh and Justice Shail Jain, while hearing a Section 37(1)(b) appeal under the Arbitration Act, observed that using the subject brand names after a dispute between the parties can cause enormous confusion to the public. People may associate the Respondent's outlets with the Appellants.
terminated due to non-payment of the Project Management Fee. The Respondent cannot be allowed to use the subject brand name indefinitely.
The bench observed that there is a serious dispute between the parties. Prima facie, once the Franchise Agreements are terminated, using the subject brand names could cause serious confusion to the public, who may still associate the Respondent's outlets with the Appellants.
Unadjudicated Claims Cannot Be Secured Through Interim Relief U/S 9 Of A&C Act Merely Due To Financial Distress: Delhi HC
The Delhi High Court Bench of Justice Jasmeet Singh has observed that mere financial distress of the other party would not be a ground to allow interim relief and grant its unadjudicated claim under Section 11 of the Arbitration Act (ACA).
"However, the calculation of any permissible rebate and the resolution of quality-based objections require factual findings and interpretation of the terms of the Agreement, which is an exercise to be carried out in the arbitration. Hence, the amounts claimed by the petitioner at this stage are unadjudicated claims, which cannot be secured through interim relief merely because respondent No. 1 is in financial distress," the court said.
The Court observed that the main issue for its consideration was whether Respondent No. 1 could be directed to secure the amount in dispute only on the ground that it is in financial distress and consequently, the Arbitral Award that might eventually be passed against it could become infructuous.
The Court observed that though it was not strictly bound by the provisions of CPC, it could not completely disregard its underlying principles. For passing an interim order in the nature of attachment before an award, the Court needed to satisfy itself that the conditions underlying Order XXXVIII Rule 5, CPC are met. The Court has to be convinced that there exists a strong prima facie case that the other party is actively trying to dissipate its assets to defeat the outcome of the award.
Commercial Unit Buyers Not Barred From Seeking Arbitration Relief After Availing Remedies Under RERA: Delhi High Court
Case Title: HARMEET SINGH KAPOOR & ANR. versus M/S NEO DEVELOPERS PVT LTD and Ors.
Citation: 2025 LiveLaw (Del) 1159
The Delhi High Court bench of Justice Pratibha M. Singh and Justice Shail Jain has held that Buyers of commercial units are not prohibited from seeking arbitration relief subsequent to availing remedies under RERA, provided that the arbitration petitions were filed after a change in circumstances.
The court at the outset observed that although the Supreme Court's judgment in Ireo Grace Realtech bars simultaneous remedies for the same cause of action but does not prohibit the party from seeking arbitration relief once the circumstances have changed. The RERA remedies were invoked before the issuance of the completion certificate, whereas the arbitration petitions were filed after the completion certificate was issued.
It was further observed that the buyers ran from pillar to post since 2015, despite making substantial payments. The court held that the respondent not only withheld possession of the units but also earned rentals by leasing the said units, going against the RERA's directions.
Foreign Arbitral Awards To Be Enforced Under Indian Law, Interpretation Of 'Public Policy' U/S 48(2)(b) A&C Act Is Limited: Delhi HC
Case Name: Roger Shashoua & Ors. v. Mukesh Sharma & Ors.
Citation: 2025 LiveLaw (Del) 1165
The Delhi High Court observed that to enforce a New York Convention Award, an application u/s 47 of the A&C Act, 1996 has to be filed. Thereafter, the onus shifts on the party opposing the enforcement to make out a ground enlisted in Section 48 of the A&C Act. The bench observed
"The settled legal position with respect to foreign awards is that, except strictly in terms of grounds of challenge as set out in Section 48 of the A&C Act, 1996, foreign arbitral awards are to be enforced in accordance with law in India. The substantive facts and merits of a particular case are not to be gone into. This position of law has been upheld in a catena of judgments, including the judgment of this Court in Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain (India) Co., [(2008) SCC OnLine Del 1271].”
The bench observed that the Supreme Court in Shri Lal Mahal Ltd. v. Progetto Grano Spa (2014) has clarified the scope of the public policy exception to foreign awards. The expression 'public policy of India' u/s 48(2)(b) of the A&C Act has an extremely narrow scope and meaning. Unlike Section 34 of the A&C Act, which allows a broader interpretation of public policy, Section 48(2)(b) of the A&C Act has a circumscribed and limited application when it comes to the enforcement of foreign awards. Even based upon an assumption that the Tribunal's direction concerning the transfer of shares is beyond the scope of the agreement, the same would not bar the enforceability of the impugned arbitral awards.
Delhi HC Declines To Restrain Encalm Hospitality From Doing Business With Clients Of Dreamfolks Services, Says No Mandate Of Exclusivity
Case Title – Dreamfolks Services Limited v Encalm Hospitality Private Limited
Citation: 2025 LiveLaw (Del) 1183
The Delhi High Court Bench of Justice Amit Bansal refused to enforce a negative covenant against Encalm Hospitality Private Limited holding that its agreement with Dreamfolks Services Limited did not mandate exclusivity between the latter and its clients and thus Encalm was not in violation of the Agreement.
The Court observed that the Petitioner placed reliance on Clause 4.4 of the Agreement to contend that the Respondent could not do business with the Clients of the Petitioner either directly or through representatives during the subsistence of the Agreement. The stand taken by the Petitioner was that “representatives” would include other third-party service providers. Further, the obligation would continue during the notice period of 90 days beginning from 04.08.2025, which the Respondent was required to honour.
The Court observed that the Agreement did not contain a list of Petitioner's clients nor did the Agreement stipulate that the Clients of the Petitioner were its exclusive Clients. The Court held that while the Petitioner had enumerated in the petition that ICICI Bank, Yes Bank, Axis Bank and American Express were its clients, however, nothing had been put on record to substantiate that the said entities/banks were its exclusive clients and that they had not entered into similar agreement with other service providers like the Petitioner.
Gujarat High Court
Writ Court Interfering With Every Procedural Order In Arbitral Proceedings Is Contrary To Aim Of A&C Act: Gujarat HC
Case Name: Gujarat Power Corporation Limited v. Tata Power Renewable Energy Limited
Case Number: R/Special Civil Application No. 6910 of 2025
The Gujarat High Court while dismissing a writ petition filed under Article 226 and 227 of the Constitution observed that the Writ Court can exercise their power only in cases where the only if the order in questions is “completely perverse”, or the order in questions is crippled with “bad faith” or the order in questions falls in the category of “rarest of rare circumstances”.
The bench of Justice Mauna M. Bhatt further held that if the Writ Court exercises its jurisdiction in curing every procedural lapse in arbitral proceedings, the same would amount to opening Pandora's box, which would be contrary to the principle of minimum judicial intervention.
The bench observed that the impugned judgment does not pass the test of either being “perverse” or having been passed in “bad faith” to warrant the Writ Court to exercise judicial interference. The order was passed by the Ld. Sole Arbitrator takes a plausible view, and even no stretch of imagination can compel the impugned order to be treated as “exceptional” or “rare”, such that it would shock the conscience of a prudent person
Himachal Pradesh High Court
Case Title – Nitin Gupta v Arrpit Aggarwal
Case No. – Arb. Case No. 116 of 2025
The Himachal Pradesh High Court bench of Justice Jyotsna Rewal Dua has observed that an interim relief petition under Section 9, Arbitration and Conciliation Act, 1996 (“ACA”) claiming closure of business and manufacturing activities of the partnership business cannot be granted when the principal dispute pertains to the business activities of that partnership. Granting such a relief would amount to the destruction of the subject matter of arbitration and would defeat the very intent and purpose behind the aforesaid section.
The Court observed that the object of Section 9, ACA is to preserve the subject matter and secure arbitration. In the guise of praying interim relief under Section 9 petition, relief of nature destructive to the main subject matter could not be granted. Filing of an application by a party by virtue of its being a party to an arbitration agreement is for securing a relief which the court has power to grant before, during or after arbitral proceedings by virtue of Section 9, ACA.
Employer Liable To Reimburse Customs Duty Paid By Contractor If Exemption Certificate Not Provided At Import Stage: HP High Court
Case Title: Himachal Pradesh Power Corporation Ltd. Vs. M/s Orange Business Service India Technology Pvt. Ltd.
Case Number:Appeal No. 01 of 2019
The Himachal Pradesh High Court dismissed an appeal under section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) filed by Himachal Pradesh Power Corporation Ltd. (HPPCL) upholding an arbitral award in favour of Orange Business Service India Technology Pvt. Ltd. The court held that the failure to provide exemption certificate by employer at the time of importation of goods for ADB funded project made it liable to reimburse the customs duty paid by the contractor.
A bench comprising Chief Justice G.S. Sandhawalia and Justice Ranjan Sharma found the Award passed by the Arbitral Tribunal which directed the reimbursement of Rs. 1 crore with 10% interest to be well reasoned, consistent with contractual terms and not vitiated by patent illegality. It held that “the Corporation having been satisfied with the supply, installation and commissioning of the project, now cannot turn around and shake off its liability on account of its own inefficiency.”
It further held that the scope of interference under section 37 of the Arbitration Act is narrower than section 34. Only patent illegality justifies the court's interference. Ultimately, the court held that failure to issue exemption certificates on time coupled with satisfaction with the work completion fastened the liability on the Appellant to reimburse the customs duty.
Jharkhand High Court
Purpose Of A&C Act Stands Defeated If There Are Delays In Executing Arbitral Award: Jharkhand High Court
Case Name: R.K. Construction Private Limited v. State of Jharkhand
Case Number: C.M.P. No. 397 of 2025
The Jharkhand High Court division bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar observed that the purpose and the object of the Arbitration and Conciliation Act, 1996, and the Commercial Courts Act, 2015, would stand defeated if there are delays in the execution of the Arbitral Award.
The present petition was filed by M/s/ R.K. Construction Private Limited (“RKCPL”), praying for expeditious adjudication of the execution petition filed by RKCPL before the execution court. The Court observed that there can be no objection to a prayer for expeditious adjudication. The Supreme Court in Rahul S. Shah v. Jinendra Kumar Gandhi and Ors. (2021) provided detailed guidelines and directions concerning the conduct of the execution proceedings. The Supreme Court at ¶42.13 had observed that the executing Court must dispose of the execution proceedings within six months from the date of filing of the petition. The concerned period may be extended only by recording reasons for delay in writing.
Orissa High Court
Clause 18 Of Vivad Se Vishwas-II Scheme Is Mandatory If Claim Satisfies Twin Test: Orissa High Court
Case Name: Paradip Port Trust (PPT) v. M/s Modi Project Limited
Case Number: ARBA No. 8 of 2023
The Orissa High Court, while hearing an appeal u/s 37 of the A&C Act, a Writ Petition filed by the Respondent for directions to the Appellant to consider the offer made under appeal, observed Vivad se Vishwas II (contractual disputes) scheme (“the scheme”), observed that Clause 18 of the scheme is mandatory in nature.
The bench of Justice Sanjeeb K. Panigrahi observed that once a contractor chooses to settle under such terms, the procuring entity cannot deny the claim without violating the legitimate expectation generated by the scheme.
Regarding the nature of Clause 18 of the scheme, the bench observed that the clause provides that where the claim amount is ₹500 crore or less, the entity “will have to accept” the claim if the same is covered following the guideline. The essence of the scheme is such that once a claim in compliance with the parameters is made, the procuring entity does not have the discretion to reject it.
The policy mandates that where the claim amount is below ₹500 crore, the claim is to be accepted. The statutory compulsion removes the discretion in the decision-making process of public undertakings. Following the principles of administrative law, an instrument of the State cannot act arbitrarily. Since the scheme stipulates that certain claims "will have to be accepted," there is a binding obligation. If these claims were to be rejected, it would be contrary not only to the scheme but also to the doctrine of fairness under Article 14 of the Constitution.
Telangana High Court
Commercial Courts Act Envisages 'Marked Difference' Between Specified Value & Pecuniary Value: Telangana High Court
Case Name: M/s Janset Labs Pvt. Ltd. v. Agilent Technologies India Pvt. Ltd.
Case Number: CRP No. 1932 of 2025
The Telangana High Court Division Bench comprising of Justice Moushumi Bhattacharya and Justice Gidi Praveen Kumar while hearing a Civil Revision Petition (“CRP”) observed that specified value forms the foundation of a commercial dispute for admission into the Commercial Courts Act, 2015 (“CC Act”). The pecuniary value, on the other hand, highlights the competence of the Court for trying such a commercial suit.
The bench noted that the expression 'Specified Value' u/s 2(1)(i) of the CC Act is different from the expression 'Pecuniary Value' u/s 3 (1A) of the CC Act. Section 3(1A) was added via the 2018 amendment concerning the pecuniary value of the Commercial Courts having original civil jurisdiction under the territorial jurisdiction of the High Court. Furthermore, Section 3(1A), beginning with a non-obstante clause, contemplates that the State Government, in consultation with the High Court, shall specify the pecuniary value of the Commercial Courts, which shall not be less than ₹ 3 lacs. Therefore, although both provisions were added via the 2018 amendment, these provisions are distinct and occupy different fields.