Arbitration and Conciliation Act, 1996Sections 8 and 11(6A) – Arbitrability of Trademark Disputes – Dispute between two factions of a Coimbatore-based family over the "Sri Angannan Biriyani Hotel" trademark. The petitioner filed a civil suit seeking a permanent injunction and ₹20 lakhs in damages for alleged trademark infringement. The respondent invoked an arbitration clause in...
Arbitration and Conciliation Act, 1996
Sections 8 and 11(6A) – Arbitrability of Trademark Disputes – Dispute between two factions of a Coimbatore-based family over the "Sri Angannan Biriyani Hotel" trademark. The petitioner filed a civil suit seeking a permanent injunction and ₹20 lakhs in damages for alleged trademark infringement. The respondent invoked an arbitration clause in the Trademark Assignment Deed, leading to referral to arbitration by the Commercial Court and High Court. Held: Not all trademark disputes are non-arbitrable; disputes in personam arising from contractual obligations, such as those under a trademark license or assignment deed, are arbitrable. Allegations of fraud, misconduct, or statutory violations do not preclude arbitration when the dispute stems from an arbitration agreement. Under Section 8, the referral court's role is limited to confirming the existence of a valid arbitration agreement, leaving substantive issues like claim validity or fraud to the arbitral tribunal. Under Section 11(6A), the court's role is confined to verifying the arbitration agreement's existence, not adjudicating the dispute's merits. Disputes arising from trademark licenses or assignments, being in personam, are arbitrable unless they involve in rem rights affecting the public. Judicial authorities must enforce arbitration agreements under Section 8 without discretion to bypass this mandate. The principle that subordinate in personam rights arising from in rem rights are arbitrable, as established in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 and Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1, was reaffirmed. The Supreme Court dismissed the petitioner's challenge, upholding the referral to arbitration. Petition dismissed; trademark dispute held arbitrable as it arose from an assignment deed. K. Mangayarkarasi v. N.J. Sundaresan, 2025 LiveLaw (SC) 597 : 2025 INSC 687
Section 31(7) - Arbitral Tribunal's Discretion to Award Differential Interest Rates - Held, under Section 31(7), the arbitral tribunal has the authority to award varying interest rates for pre-reference, pendente lite, and post-award periods. The Supreme Court set aside the High Court's decision, which had overturned the tribunal's award of compound interest, affirming that the "sum" under Section 31(7)(b) includes the principal and accrued interest, permitting compound interest. The tribunal may exclude specific periods or subdivide the period between the cause of action and the award date, applying reasonable interest rates as deemed fit. The appeal was allowed, restoring the arbitral award with compound interest as granted. Interstate Construction v. National Projects Construction Corporation Ltd., 2025 LiveLaw (SC) 585 : 2025 INSC 699
Section 16 - An arbitral award cannot be set aside solely on jurisdictional grounds, such as the applicability of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (MP Act), if no objection to the arbitral tribunal's jurisdiction was raised under Section 16 of the 1996 Act. Where a party, such as the respondent-MPRDC, participates in arbitration proceedings without challenging jurisdiction and raises the issue only post-award under Section 34, the award cannot be annulled on jurisdictional grounds alone. Jurisdictional challenges in ongoing arbitration proceedings are permissible before filing a statement of defence, but not after substantial progress. Awards under the 1996 Act, where the MP Act applies, may be challenged under Sections 34 and 37 of the 1996 Act but must be executed as per the MP Act. The appeal was allowed, overturning the High Court's decision to set aside the award solely on jurisdictional grounds. Gayatri Project v. Madhya Pradesh Road Development Corporation, 2025 LiveLaw (SC) 578 : 2025 INSC 698
Section 7 - Ambiguous Arbitration Clauses - Suo Motu Powers - Judicial Time Wastage - Malafide Drafting - The Supreme Court deprecated the practice of deliberately ambiguous drafting of arbitration clauses by the legal fraternity, terming it a "criminal waste of judicial time." The Court directed judicial forums to reject such poorly drafted clauses at the outset by exercising suo motu powers in cases of malafide drafting. It emphasized the need for clear and precise arbitration clauses to prevent litigation and ensure expeditious dispute resolution. Article 20 in the Concession Agreements between South Delhi Municipal Corporation and private contractors was held not to constitute a valid arbitration agreement under Section 7 due to its ambiguity and lack of procedural clarity. Consequently, the Supreme Court set aside the High Court's judgments interpreting Article 20 as a valid arbitration clause in two cases, while affirming the rejection of arbitration in a third case. (Para 49 - 60) South Delhi Municipal Corporation v. SMS Limited, 2025 LiveLaw (SC) 568 : 2025 INSC 693
The MSMED Act, as a special statute, prevails over the Arbitration and Conciliation Act, 1996, to facilitate expeditious dispute resolution for MSMEs. Private contractual clauses specifying an arbitration seat (Bengaluru) cannot override the mandatory jurisdiction of the MSME Facilitation Council under Section 18(4) of the MSMED Act, determined by the supplier's location (Delhi). The Supreme Court set aside the High Court's interference with MSMED proceedings in Delhi, restoring arbitration under the Delhi Arbitration Centre, as the supplier was registered in Delhi. No arbitration agreement can restrict reference to the Facilitation Council under Section 18(1) of the MSMED Act. Harcharan Dass Gupta v. Union of India, 2025 LiveLaw (SC) 567 : 2025 INSC 689
Section 16 - Arbitrability of disputes over a full and final settlement allegedly signed under coercion, despite discharge of the original contract by accord and satisfaction. Held, an arbitration agreement survives the discharge of the original contract by accord and satisfaction. A dispute challenging the validity of a full and final settlement on grounds of coercion, fraud, or undue influence remains arbitrable. The execution of a discharge voucher does not preclude arbitration if coercion is alleged. Under Section 16, the arbitral tribunal is competent to determine its jurisdiction over such disputes. The High Court's rejection of arbitration, based on accord and satisfaction, was set aside, as the issue of coercion in executing the settlement voucher falls within the arbitral tribunal's purview. Arbitrability cannot be conclusively determined at the Section 8 or 11 stage unless the dispute is manifestly non-arbitrable. Economic duress is a valid ground for challenging a settlement, and courts should not deny arbitration based on preliminary assessments of coercion at the Section 11(6) stage. Appeal allowed; dispute referred to arbitration for adjudication by the arbitral tribunal. (Paras 34 - 41)] Arabian Exports v. National Insurance Company Ltd., 2025 LiveLaw (SC) 539 : 2025 INSC 630
Arbitration and Conciliation Bill, 2024 – Absence of Statutory Recognition for Impleadment of Non-Signatories – Supreme Court Criticism - The Supreme Court expressed dissatisfaction with the Arbitration and Conciliation Bill, 2024, for failing to explicitly recognize the power of arbitral tribunals to implead or join non-signatory parties, despite judicial precedents emphasizing its necessity. The Court urged the Department of Legal Affairs, Ministry of Law and Justice, to incorporate statutory provisions addressing this issue to eliminate judicial uncertainty. The Court upheld the High Court's decision permitting the joinder of a non-signatory (Appellant) to arbitral proceedings based on the “Group of Companies” doctrine, reiterating that jurisdictional and factual issues, including the status of non-signatories, should be resolved by the arbitral tribunal, subject to limited judicial review under Section 34 of the Arbitration and Conciliation Act, 1996. (Para 170) ASF Buildtech v. Shapoorji Pallonji and Company, 2025 LiveLaw (SC) 521 : 2025 INSC 616
Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Courts have limited powers to modify arbitral awards under Sections 34 and 37. The Supreme Court (4:1) held that modifications are permissible in specific cases: (1) when the award is severable, allowing excision of invalid portions; (2) to correct clerical, computational, or typographical errors; (3) to adjust post-award interest in exceptional circumstances; and (4) under Article 142 of the Constitution, exercised sparingly within constitutional bounds. Justice K.V. Viswanathan dissented, contending that Section 34 does not permit modifications unless explicitly authorized, as it undermines arbitration finality, and interest modifications require remittal to the tribunal. He also cautioned against using Article 142, citing risks of uncertainty in arbitration litigation. The Court clarified the scope of modification powers, permissible modifications, and award severability, resolving conflicting precedents following a February 2024 reference. (Paras 85 & 157) Gayatri Balasamy v. ISG Novasoft Technologies, 2025 LiveLaw (SC) 508 : 2025 INSC 605
Arbitration and Conciliation Act, 1996 - Section 34 - Modification of Arbitral Awards - Doctrine of Implied Powers - Efficient Dispute Resolution - Judicial Legislation - (Majority 4:1) Courts under Section 34 possess inherent power to modify arbitral awards to promote efficient dispute resolution, as denying such power would compel parties to initiate fresh arbitration, increasing costs and delays. This power is implied within the authority to partially set aside an award under Section 34(2)(a)(iv), provided the award's parts are severable. Modification is restricted to correcting inadvertent errors (clerical, typographical, or computational) without delving into merits-based evaluation, aligning with the Act's objective of expeditious resolution. The doctrine of implied powers supports this interpretation, and such authority does not conflict with appellate or review jurisdictions. However, modifications must be precise and unambiguous; otherwise, parties should seek recourse under Sections 33 or 34(4). Dissent (Justice KV Viswanathan): Courts lack the power to modify awards under Section 34, as such authority is not expressly provided in the Act. Allowing modification would constitute judicial legislation, exceeding judicial authority. Unlike Vishaka v. State of Rajasthan, (1997) 6 SCC 241 where guidelines addressed a legislative vacuum, formulating standards for modification is impractical due to the diverse scenarios in Section 34 applications. (Paras 85 & 157) Gayatri Balasamy v. ISG Novasoft Technologies, 2025 LiveLaw (SC) 508 : 2025 INSC 605
Constitution of India, Article 142; Arbitration and Conciliation Act, 1996, Sections 34 and 37 - The Supreme Court's plenary powers under Article 142 can be cautiously exercised to modify arbitral awards to ensure complete justice and expedite protracted proceedings, provided such modifications do not interfere with the award merits or violate the core principles of the Arbitration and Conciliation Act, 1996. Modifications must align with fundamental rights and the legislative intent of the Act, aiming to resolve disputes efficiently while saving time and costs, without rewriting the award. [Relied: Shilpa Sailesh v. Varun Sreenivasan, 2023 LiveLaw (SC) 375]. Justice KV Viswanathan dissented, holding that Article 142 cannot be used to modify arbitral awards, as Section 34 provides the exclusive mechanism for challenging awards under the 1996 Act. He opined that such modifications contravene substantive law, undermine the ethos of arbitration, and could create uncertainty, thereby diminishing arbitration's efficacy as an alternative dispute resolution mechanism. [Referred: Supreme Court Bar Association v. Union of India, , (1998) 4 SCC 409]. (Paras 85 & 157) Gayatri Balasamy v. ISG Novasoft Technologies, 2025 LiveLaw (SC) 508 : 2025 INSC 605
Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Appellate Jurisdiction - Reasoned Arbitral Awards - Curative Remand - No Review of Findings - Judicial Discretion - The requirement of a written request for remand under S.34(4) and the notion that courts become functus officio after setting aside an arbitral award were rejected. Oral requests for remand are permissible, and remand is allowed even after decisions under S.34(1). Appellate courts under S.37 possess powers coterminous with S.34, including the authority to remand, regardless of whether the award was upheld or set aside under S.34. Arbitral awards must be proper, intelligible, and adequately reasoned. S.34(4) enables curing defects in reasoning to make awards enforceable, but it does not permit tribunals to review or alter prior findings, emphasizing its curative, not revisory, scope. Courts must be prima facie satisfied that defects are curable without recording final findings. Discretion under S.34(4) must be exercised cautiously and judiciously, ensuring tribunals can effectively address curable defects without rewriting awards. The Supreme Court clarified that S.37 courts retain remand powers, overruling restrictive interpretations to ensure flexibility while upholding judicial precision. [Referred: Kinnari Mullick v. Ghanshyam Das Damani (overruled in part) Dyna Technologies Private Limited v. Crompton Greaves Limited I-Pay Clearing Services Private Limited v. ICICI Bank Limited] (Paras 85 & 157) Gayatri Balasamy v. ISG Novasoft Technologies, 2025 LiveLaw (SC) 508 : 2025 INSC 605
Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Remand under S.34(4) - Limited Modification Powers - Proportionality and Substantial Injustice - Discretionary Nature - Courts have discretionary power under S.34(4) to remand arbitral awards to the tribunal for correction of curable defects, without rewriting or setting aside the entire award. Remand is appropriate only when defects can be rectified to prevent setting aside the award. Under S.34 and S.37, courts have limited authority to modify awards, requiring precise and restrained intervention. Remand and modification are distinct, with remand allowing tribunals to address specific issues. Awards with substantial injustice or patent illegality are not suitable for remand. Courts must evaluate the nature of defects and the tribunal's ability to cure them proportionally. Derived from the UNCITRAL Model Law, S.34(4)'s use of “may” underscores its discretionary nature. Courts must exercise caution to avoid delays, costs, or inefficiencies and ensure remand does not place tribunals in an untenable position. (Paras 85 & 157) Gayatri Balasamy v. ISG Novasoft Technologies, 2025 LiveLaw (SC) 508 : 2025 INSC 605
Section 34 - Courts must respect arbitral autonomy and exercise minimal interference under Section 34 of the Act. Section 34 restricts judicial review to cases involving patent illegality, public policy violations, or jurisdictional errors, prohibiting re-evaluation of evidence or reinterpretation of contract terms. A plausible arbitral view must prevail and courts cannot act as appellate bodies. The appeal was dismissed, reinforcing the summary nature of Section 34 proceedings. (Paras 23, 24, 28) Consolidated Construction Consortium v. Software Technology Parks, 2025 LiveLaw (SC) 501 : 2025 INSC 574
Section 34 and 37 - Excessively long oral submissions and voluminous case law citations in arbitration proceedings - The Supreme Court expresses concern over the tendency of advocates to treat proceedings under Sections 34 and 37 of the Arbitration Act as regular appeals under Section 96 of the CPC, delving into excessive factual details and citing numerous decisions, relevant or irrelevant. Such practices lead to protracted oral and written submissions, lengthy judgments, and delays, contributing to criticism of arbitration in India. The Court advocates for time limits on oral submissions and restraint in arguments, given the limited jurisdiction of courts in these proceedings. The Court also highlights the need to balance high-stake arbitration cases with the appellate jurisdiction over civil and criminal cases, urging introspection by the Bar to ensure efficiency and fairness in judicial processes. The appeals, lacking merit, were dismissed. (Para 58) Larsen and Toubro Ltd. v. Puri Construction Pvt. Ltd., 2025 LiveLaw (SC) 449 : 2025 INSC 523
Sections 11 and 21 - Whether service of a notice under Section 21 and participation in a Section 11 application are prerequisites for impleading a person or entity as a party to arbitral proceedings. Held, neither service of a Section 21 notice nor joinder in a Section 11 application is a prerequisite for impleading a person or entity as a party to arbitral proceedings. (Para 40) Adavya Projects Pvt. Ltd. v. Vishal Structurals Pvt. Ltd., 2025 LiveLaw (SC) 439 : [2025] 5 SCR 243 : 2025 INSC 507
Sections 11, 16, and 21 - What is the source of an arbitral tribunal's jurisdiction over a person or entity sought to be impleaded, and what inquiry must the tribunal undertake under Section 16 to determine its jurisdiction? Held, the arbitral tribunal's jurisdiction to implead a person or entity derives from their consent to the arbitration agreement, independent of procedural requirements under Sections 11 or 21. Under Section 16, the tribunal must determine whether the person or entity is a party to the arbitration agreement, based on evidence and applicable legal principles. (Para 40) Adavya Projects Pvt. Ltd. v. Vishal Structurals Pvt. Ltd., 2025 LiveLaw (SC) 439 : [2025] 5 SCR 243 : 2025 INSC 507
Section 34 - Limitation Act, 1963; Section 4 and 12 - Three-month limitation period under Section 34 (3) for challenging an arbitral award should not be rigidly interpreted as exactly 90 days, rather it should be interpreted as three calendar months. Application filed on next working day after 90-day period is within limitation. For calculating limitation under Section 34(3), the date on which the arbitral award is passed must be excluded. Accordingly, the limitation period begins from the day following the date of the award. R.K. Transport Company v. Bharat Aluminum Company Ltd., 2025 LiveLaw (SC) 391 : 2025 INSC 438
Even in a consumer dispute under the Act, or for that matter, the Consumer Protection Act, 2019, arbitration, if provided for under the relevant agreement/document, can be opted for/resorted to, however, at the exclusive choice of the 'consumer' alone. (Para 25) Citicorp Finance v. Snehasis Nanda, 2025 LiveLaw (SC) 332 : 2025 INSC 371
Section 34(2)(b) - An Arbitral Award upholding agreement to return acquired land is liable to be set aside under Section 34(2)(b) as it is in conflict with the public policy of India. (Para 15) Delhi Agricultural Marketing Board v. Bhagwan Devi, 2025 LiveLaw (SC) 327 : 2025 INSC 367
In the absence of an express law governing the arbitration agreement, the applicable law should be determined based on the parties' intentions, with a strong presumption in favor of the law governing the main contract (lex contractus). (Para 31) Disortho S.A.S. v. Meril Life Sciences, 2025 LiveLaw (SC) 317 : 2025 INSC 352
Section 40 - Death of a partner - Whether legal heirs of a deceased partner, though non-signatories to the partnership deed, are bound by the arbitration agreement contained therein. Whether the right to sue for rendition of accounts survives to the legal heirs of a deceased partner, entitling them to invoke the arbitration clause. Held, an arbitration agreement does not cease to exist upon the death of a party and is enforceable by or against the legal representatives of the deceased. The term "partners" includes legal heirs, representatives, assigns, or legatees. Persons claiming under the rights of a deceased person are representatives of the deceased party, and both parties and their legal heirs are entitled to enforce and are bound by an arbitral award. Section 40 of the Arbitration and Conciliation Act, 1996, ensures the arbitration agreement's existence is unaffected by a party's death. The right to sue for rendition of accounts also survives, allowing legal representatives to assert or defend claims arising from the partnership agreement. The supreme court upheld the high court decision to allow the arbitration appeal. (Para 10) Rahul Verma v. Rampat Lal Verma, 2025 LiveLaw (SC) 269 : 2025 INSC 296
Section 37 - Oral Undertaking - Joint and Several Liability - Arbitration Clause - Non-Signatories - Bombay Stock Exchange Bye-laws - Whether an oral undertaking establishing joint and several liability falls within the scope of an arbitration clause, rendering a non-signatory (husband) liable for transactions in a joint demat account registered in his wife's name. Held, an oral undertaking creating joint and several liability is enforceable under the arbitration clause in Bye-law 248(a) of the Bombay Stock Exchange (BSE) Bye-laws, 1957. The husband's active participation in transactions in his wife's demat account implied an oral agreement, making him jointly and severally liable. The argument that the husband's liability was a "private transaction" outside the arbitration clause's scope was rejected. The High Court erred in setting aside the arbitral award against the husband under Section 37 of the Act on technical grounds. The arbitral tribunal's award of Rs. 1,18,48,069/- with 9% interest per annum against both respondents was upheld, as the husband's involvement in the transactions effectively made him a party to the client agreement. Courts must interpret contracts pragmatically, considering the parties' conduct and performance of mutual obligations, to prevent evasion of liability. Appeal allowed; High Court's decision set aside; arbitral award against both husband and wife upheld. (Paras 12 - 14) AC Chokshi Share Broker v. Jatin Pratap Desai, 2025 LiveLaw (SC) 178 : 2025 INSC 174
Section 34 and 37 - Contract Act, 1872; Sections 23 & 28 - Enforceability of clauses barring claims for damages - Estoppel by Conduct - Limitation of Liability Clauses - Scope of interference under Section 37 - Appellant and Respondent entered into an agreement for construction of Road Over Bridges (ROBs). Disputes arose regarding delays, and the Appellant claimed damages despite a clause barring such claims. The Arbitral Tribunal rejected all claims based on this clause. The High Court, in Section 34 and 37 proceedings, upheld the Arbitral Tribunal's decision. Whether a clause prohibiting payment of damages for delays caused by the employer is enforceable; whether the Appellant is estopped from challenging such a clause due to its conduct; and the scope of interference under Section 37 of the Arbitration Act. Held, Clause 49.5 of the General Conditions of Contract (GCC), which explicitly barred claims for damages due to delays caused by the employer, was valid and enforceable. The Appellant, having repeatedly invoked clause 49.5 for extensions of time and providing undertakings not to claim damages, was estopped by conduct from challenging its validity. The scope of interference under Section 37 of the Arbitration Act is limited and akin to that under Section 34, restricting the court to grounds of patent illegality or denial of natural justice. The contention regarding the validity of clause 49.5 under Sections 23 and 28 of the Contract Act, raised for the first time in the Supreme Court, was not entertained. The appeal was dismissed. C&C Constructions Ltd. vs. IRCON International Ltd., 2025 LiveLaw (SC) 148 : 2025 INSC 138
Section 34 and 37 - Scope of judicial interference is limited. Courts cannot reappraise evidence or substitute their view for that of the arbitrator. An arbitral award can only be set aside if it is contrary to the public policy of India, shocks the conscience of the court, or suffers from patent illegality. Technical findings by expert bodies like the DRB and Arbitral Tribunal should be given due weight, especially in complex contractual disputes. Somdatt Builders –Ncc – Nec (Jv) v. National Highways Authority of India, 2025 LiveLaw (SC) 115 : [2025] 2 SCR 203 : 2025 INSC 113
Section 34 and 37 - Whether the Engineer, under the contract, had the authority to revise rates for additional quantities of geogrid beyond the Bill of Quantities (BOQ) in the absence of a change in design or instructed variation. Whether the Division Bench of the High Court erred in setting aside the arbitral award and the Single Judge's decision. The appellant, a joint venture, was awarded a contract by the National Highways Authority of India (NHAI) for four-laning and strengthening of a section of NH-2 near Kanpur, Uttar Pradesh. A dispute arose regarding the payment for geogrid material, which exceeded the BOQ quantities. The appellant contended that the Engineer could not revise the rates for the additional quantities, as there was no change in design or instructed variation. The Dispute Review Board (DRB) and the Arbitral Tribunal ruled in favor of the appellant, holding that the Engineer lacked the authority to revise rates for the additional quantities. The Single Judge of the High Court upheld the arbitral award under Section 34 of the 1996 Act. The Division Bench of the High Court, however, set aside the arbitral award, holding that the increase in quantity, even if uninstructed, constituted a variation under Clause 51.1, allowing for rate renegotiation. Held, the increase in geogrid quantity did not constitute a variation under Clause 51.1, as there was no change in design or instructed variation. The Engineer did not have the authority to revise the rates for the additional quantities, and the BOQ rates were applicable. The DRB and Arbitral Tribunal's findings, based on technical expertise, were correct and plausible. The Division Bench erred in setting aside the arbitral award under Section 37 of the 1996 Act. The interpretation of contractual terms by the Arbitral Tribunal was reasonable, and the Single Judge had rightly declined to interfere under Section 34. The Division Bench's decision to overturn the award was unjustified, as it exceeded the limited scope of interference under Section 37. The Supreme Court set aside the Division Bench's judgment and restored the arbitral award, holding that the Engineer could not revise the rates for additional quantities of geogrid in the absence of a change in design or instructed variation. The appeal was allowed. Somdatt Builders –Ncc – Nec (Jv) v. National Highways Authority of India, 2025 LiveLaw (SC) 115 : [2025] 2 SCR 203 : 2025 INSC 113
Section 16 (2) and 34 - Jurisdictional Challenge and Conduct of Parties - The contract provided for arbitration by a three-member tribunal. However, due to procedural issues, a sole arbitrator (a retired Chief Justice of the High Court) was appointed by the Chief Justice of the High Court. The respondent initially accepted the sole arbitrator's jurisdiction but later challenged it. The respondent filed a statement of defense before the sole arbitrator without raising any jurisdictional objections. However, the respondent filed an application challenging the sole arbitrator's jurisdiction, contending that the arbitration clause mandated a three-member tribunal. The sole arbitrator rejected this challenge, holding that the respondent had already submitted to the jurisdiction and that the objection was barred under Section 16(2) of the Arbitration and Conciliation Act, 1996, which prohibits raising jurisdictional objections after submitting the statement of defense. The sole arbitrator passed an award which was challenged by the respondent under Section 34 of the Arbitration Act. The District Judge set aside the award, holding that the appointment of the sole arbitrator was illegal. The High Court upheld this decision. Held, the respondent had unequivocally accepted the sole arbitrator's jurisdiction and had filed its statement of defense without raising any jurisdictional objections. The Court emphasized that under Section 16(2) of the Arbitration Act, a jurisdictional challenge cannot be raised after the submission of the statement of defense. Consequently, the Court set aside the judgments of the District Judge and the High Court, restoring the arbitration case for consideration on other grounds, while conclusively holding that the issue of the sole arbitrator's jurisdiction could not be re-agitated. Vidyawati Construction Company v. Union of India, 2025 LiveLaw (SC) 105 : 2025 INSC 101
Section 34 and 37 - Courts cannot modify arbitral awards under Sections 34 and 37 of the Act. S. Jayalakshmi v. Special District Revenue Officer, 2025 LiveLaw (SC) 98
Section 34 (3) - Limitation Act, 1963; Section 4 - General Clauses Act, 1897; Section 10 - Applicability of - The appellants received the arbitral award on February 14, 2022. The 3-month limitation period for filing a Section 34 application expired on May 29, 2022 (extended due to COVID-19). The 30-day condonable period expired on June 28, 2022, during the court's summer vacation. The application was filed on July 4, 2022, the day the court reopened. The High Court dismissed the application as time-barred, and the Division Bench upheld the decision. Held, the Limitation Act applies to arbitration proceedings under the ACA, except where expressly excluded. Section 4 of the Limitation Act applies only when the 3-month limitation period expires on a court holiday, not when the 30-day condonable period expires during a vacation. The 30-day condonable period cannot be extended by invoking Section 4 of the Limitation Act. Section 10 of the General Clauses Act does not apply to proceedings under the ACA, as the Limitation Act governs such proceedings. The proviso to Section 10 explicitly excludes its application where the Limitation Act applies. The Section 34 application was filed beyond the condonable period of 30 days and was thus barred by limitation. The High Court's decision to dismiss the application was upheld. My Preferred Transformation & Hospitality Pvt. Ltd. v. Faridabad Implements Pvt. Ltd., 2025 LiveLaw (SC) 49 : 2025 INSC 56
The Court expressed concerns about the stringent application of limitation laws, which may curtail the remedy to challenge arbitral awards. The current legal position may lead to injustice in cases where parties are unable to file applications within the prescribed period due to genuine reasons. The Court suggested that the legislature reconsider the limitation framework to ensure uniformity and fairness, particularly in arbitration matters. My Preferred Transformation & Hospitality Pvt. Ltd. v. Faridabad Implements Pvt. Ltd., 2025 LiveLaw (SC) 49 : 2025 INSC 56
Section 34 - Respondent No. 1 was employed as a Lab Assistant/Technician at Dina Nath Parbati Bangla Infectious Disease (DNPBID) Hospital, Kanpur, which was taken over by the State of Uttar Pradesh in 1956. Respondent No. 1 challenged his retirement age (58 years) in a writ petition, claiming entitlement to retire at 60 years under Municipal Board rules. The writ petition was withdrawn in 2009. In 2008, Respondent No. 1 initiated arbitration proceedings based on an alleged arbitration agreement dated April 1, 1957, between the Municipal Board and the State of Uttar Pradesh. Two ex parte awards were passed in favor of Respondent No. 1 by arbitrators unilaterally appointed by him, awarding significant sums with interest. The State challenged the awards alleging fraud and lack of jurisdiction. Held, the purported arbitration agreement was not found in official records, and its authenticity was denied by both the Municipal Corporation and the State. Respondent No. 1 was not a signatory to the agreement, and the unilateral appointment of arbitrators was contrary to the alleged arbitration clause. The arbitration proceedings were deemed a sham, and the awards were declared null and void ab initio for lack of subject matter jurisdiction and fraud. The Court emphasized that arbitration agreements must be genuine and enforceable, and unilateral appointments undermine the integrity of arbitration. The Supreme Court allowed the appeal, set aside the ex parte awards and dismissed the execution proceedings. Fraudulent arbitration proceedings and unilateral appointments of arbitrators without a valid arbitration agreement render the awards null and void. The existence of a genuine arbitration agreement is a prerequisite for enforceability under the Arbitration and Conciliation Act, 1996. State of Uttar Pradesh v. R.K. Pandey, 2025 LiveLaw (SC) 45 : [2025] 1 SCR 403 : 2025 INSC 48
Section 14 (2), 17 and 30 - The 30-day limitation period for filing objections under Section 30 of the Act, 1940, begins when the party becomes aware of the award's existence, not necessarily from the date of formal notice. A formal notice is not required for the limitation period to commence; mere awareness of the award's filing is sufficient. The purpose of Section 14(2) is to ensure parties are aware of the award's existence, not to impose procedural formalities. Krishna Devi v. Union of India, 2025 LiveLaw (SC) 16 : [2025] 1 SCR 81 : 2025 INSC 24
Section 18 - Constitution of India; Article 227 - Judicial restraint in arbitration matters - Whether the High Court was justified in granting an additional opportunity to cross-examine the witness, despite the Arbitral Tribunal's refusal to do so. During the arbitration, the respondent sought multiple extensions to cross-examine the witness, which the Arbitral Tribunal eventually denied, citing lack of preparedness and excessive delay. The respondent challenged the Tribunal's decision before the High Court which granted an additional opportunity for cross-examination, citing "exceptional circumstances." Held, the Arbitral Tribunal had provided sufficient opportunity for cross-examination, with the respondent having already cross-examined RW-1 for over 12 hours across multiple sessions. The High Court's interference was unjustified, as it failed to demonstrate any perversity in the Tribunal's order, which is a prerequisite for judicial intervention under Article 227. The Tribunal's decision to deny further cross-examination was upheld, and the arbitration process was directed to proceed without further delay. Serosoft Solutions v. Dexter Capital Advisors, 2025 LiveLaw (SC) 14 : [2025] 1 SCR 151 : 2025 INSC 26