Arbitration Monthly Digest: May 2025

Mohd Talha Hasan

3 May 2025 3:00 PM IST

  • Arbitration Monthly Digest: May 2025

    Supreme Court When Can Court Remand Arbitral Award To Tribunal Under S.34/37 Arbitration Act ? Supreme Court Explains Case Details : GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021 Citation : 2025 LiveLaw (SC) 508 The Supreme Court Constitution Bench recently held that the powers of Courts to remand arbitral awards back to the...

    Supreme Court

    When Can Court Remand Arbitral Award To Tribunal Under S.34/37 Arbitration Act ? Supreme Court Explains

    Case Details : GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021

    Citation : 2025 LiveLaw (SC) 508

    The Supreme Court Constitution Bench recently held that the powers of Courts to remand arbitral awards back to the Tribunal under S. 34(4) of the Arbitration and Conciliation Act 1996 cannot be seen as a straight-jacket formula.The Court observed that an award should be remitted back only if there is a possibility to correct a defect in the award, but if the entire award suffers from substantial injustice and patent illegality, remittance should be avoided.

    The Constitution Bench (by 4:1) held that Appellate Courts have limited powers to modify arbitral awards while exercising powers under either Section 34 or 37 of the Arbitration and Conciliation Act, 1996. The bench led by CJI Sanjiv Khanna, comprising Justices BR Gavai,Sanjay Kumar, AG Masih and KV Viswanathan delivered the verdict. The Court held that the power of remand under S. 34(4) of the Act is of restrictive nature for the Courts. While the remand give flexibility to the tribunals to make amends in the award.

    Supreme Court Criticises Arbitration Bill 2024 For Not Recognising Power To Implead Non-Signatories, Urges Union To Make Changes

    Case Title: ASF BUILDTECH PRIVATE LIMITED VERSUS SHAPOORJI PALLONJI AND COMPANY PRIVATE LIMITED

    Citation : 2025 LiveLaw (SC) 521

    The Supreme Court today (May 2) expressed its dissatisfaction with the continued absence of explicit statutory recognition for the power of arbitral tribunals to implead or join non-signatory parties. The Court noted with concern that, despite earlier omissions in the Arbitration and Conciliation Act, 1996, the newly proposed Arbitration and Conciliation Bill, 2024, which seeks to overhaul the legislation, also failed to address this critical issue.

    We urge, the Department of Legal Affairs, Ministry of Law and Justice to take a serious look at the arbitration regime that is prevailing in India and bring about necessary changes while the Arbitration and Conciliation Bill, 2024 is still being considered.”, the court added.

    The bench comprising Justices J.B. Pardiwala and R. Mahadevan was hearing the case, which involved a question of whether the Appellant-ASF Buildtech Pvt. Ltd. (ABPL), a non-signatory to the arbitration agreement, could be joined to the arbitral proceedings initiated by the Respondent-Shapoorji Pallonji & Co. Pvt. Ltd. (SPCPL) based on the “Group of Companies” doctrine.

    If Courts Can Only Set Aside Awards & Can't Modify Them, Parties Will Be Forced To Undergo Fresh Round Of Arbitration : Supreme Court

    Case Details : GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021

    Citation : 2025 LiveLaw (SC) 508

    The Supreme Court recently held that in order to ensure efficient dispute resolution and uphold the objectives of the Arbitration and Conciliation Act 1996, the Court should be allowed to modify awards when parties challenge the tribunal's decision. The majority held that denying modification powers to the Court under S.34 and 37 would be contrary to the main purpose of arbitration, which is efficient dispute resolution. The Court noted that the cycle of litigation post-award takes years, especially in cases challenging the award under S.34 and appeals against the S.34 order. The Court stated :

    "To deny courts the authority to modify an award—particularly when such a denial would impose significant hardships, escalate costs, and lead to unnecessary delays—would defeat the raison d'être of arbitration. This concern is particularly pronounced in India, where applications under Section 34 and appeals under Section 37 often take years to resolve."

    Dispute Over Full & Final Settlement Is Arbitrable Despite Parties Discharging Contract : Supreme Court

    Case Title: ARABIAN EXPORTS PRIVATE LIMITED VERSUS NATIONAL INSURANCE COMPANY LTD.

    Citation : 2025 LiveLaw (SC) 539

    The Supreme Court today (May 6) observed that if the insured alleges coercion in arriving at a settlement with the insurer, then the dispute over the validity of the settlement remains arbitrable.

    “Any dispute pertaining to the full and final settlement itself by necessary implication being a dispute arising out of or in relation to or under the substantive contract would not be precluded from reference to arbitration as the arbitration agreement contained in the original contract continues to be in existence even after the parties have discharged the original contract by 'accord and satisfaction'.”, the court said.

    The bench comprising Justices Abhay S Oka and Ujjal Bhuyan was hearing the case where the Appellant-Insured, who was engaged in the meat processing business, had suffered loss due to flooding. The Appellant alleged that a voucher was signed with the insurer out of coercion to arrive at a settlement, however, immediately after signing of the settlement voucher, the Appellant invoked Arbitration clause.

    High Court May Grant Article 227 Interim Relief In Arbitration Proceedings In Exceptional Cases : Supreme Court

    Case Title: M/S JINDAL STEEL AND POWER LTD. & ANR. VERSUS M/S BANSAL INFRA PROJECTS PVT. LTD. & OTHERS

    Citation : 2025 LiveLaw (SC) 544

    The Supreme Court (May 7) held that while the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) mandates minimal judicial interference, a High Court may, in exceptional cases, exercise its supervisory jurisdiction under Article 227 of the Constitution to grant interim relief, particularly where denial of such protection would result in irreparable harm.

    “We are aware of the established legal principle that the Courts should refrain from interfering with the invocation of a bank guarantee except in cases of fraud of an egregious nature or in cases where allowing encashment would result in irretrievable injustice.”, the court said.
    The bench comprising Justices JB Pardiwala and R Mahadevan refused to interfere with the High Court's order granting interim protection from encashing the bank guarantees furnished by the Appellant for the construction of the residential units by the Respondent-Real Estate Company.

    Private Arbitration Clauses Cannot Override Statutory Mandates Under MSMED Act : Supreme Court

    Case Title: M/S HARCHARAN DASS GUPTA VERSUS UNION OF INDIA

    Citation : 2025 LiveLaw (SC) 567

    Reaffirming that the MSMED Act prevails over the Arbitration Act, as held in Gujarat State Civil Supplies v. Mahakali Foods, the Supreme Court set aside the Karnataka High Court's interference with MSMED proceedings in Delhi, despite the contract naming Bengaluru as the arbitration seat.

    The Court clarified that private contractual clauses cannot override the statutory mandate of the MSMED Act. Since the appellant-supplier was registered in Delhi, the Court noted that the Delhi Arbitration Centre had jurisdiction under Section 18(4) of the MSMED Act, regardless of the contract's designation of Bengaluru as the seat of arbitration due to the overriding nature of the MSMED Act. The bench comprising Justices PS Narasimha and Joymalya Bagchi was hearing the case where a tender was issued by ISRO for construction work in New Delhi.

    Supreme Court Deprecates 'Deliberate, Ambiguous' Drafting Of Arbitration Clauses; Calls For Suo Motu Action In Malafide Cases

    Case Title: South Delhi Municipal Corporation v. SMS Limited, SLP (C) No. 16913/2017

    Citation : 2025 LiveLaw (SC) 568

    Delivering a significant judgment on arbitration law, the Supreme Court today deprecated the practice of arbitration clauses being deliberately phrased "ambiguously" by members of legal fraternity and urged judicial forums across the country to throw out cases involving "shoddily drafted arbitration clauses" at the threshold.

    The Court said that such "malafide cases" are a "criminal wastage of judicial time" and have been allowed to go on for long. It called on the judicial forums to take stringent actions in this regard by invoking their suo motu powers.

    A bench of Justices Surya Kant and N Kotiswar Singh delivered the judgment, wherein it was observed that India has made considerable strides in the field of arbitration, but challenges, chiefly in terms of poor drafting of arbitration clauses, remain. Calling for arbitration clauses to be framed with precision, the Court stated,


    S. 31(7) Arbitration | Arbitral Tribunal Has Power To Award Different Rates Of Interest For Pre-Reference & Pendente Lite Period : Supreme Court

    Case Title: M/S. INTERSTATE CONSTRUCTION VERSUS NATIONAL PROJECTS CONSTRUCTION CORPORATION LTD.

    Citation : 2025 LiveLaw (SC) 585

    The Supreme Court held that under the Arbitration and Conciliation Act, 1996, an Arbitral Tribunal has the power to award different rates of interest for different phases.

    A bench comprising Justices Abhay S. Oka and Ujjal Bhuyan overturned the Delhi High Court's ruling, which had invalidated the tribunal's grant of interest on interest, deeming it impermissible under Section 31(7) of the Act.

    The bench heard the case where the dispute originated from a 1984 contract for the Thermal Power Project in Andhra Pradesh. After the completion of work in 1987, the Appellant-Interstate Construction claimed unpaid dues from NPCC, leading to arbitration proceedings that began in 1993 and continued for nearly three decades through multiple arbitrators.

    All Trademark Disputes Aren't Outside Arbitration; In Personam Issues Relating To License Agreement Arbitrable : Supreme Court

    Case Title: K. MANGAYARKARASI & ANR. VERSUS N.J. SUNDARESAN & ANR.

    Citation : 2025 LiveLaw (SC) 597

    The Supreme Court recently held that a mere allegation of fraud or misconduct does not divest an arbitral tribunal of its jurisdiction to adjudicate in personam disputes stemming from contractual relationships governed by an arbitration agreement.

    “The law is well settled that allegations of fraud or criminal wrongdoing or of statutory violation would not detract from the jurisdiction of the arbitral tribunal to resolve a dispute arising out of a civil or contractual relationship on the basis of the jurisdiction conferred by the arbitration agreement.”, the court observed.

    The bench comprising Justices JB Pardiwala and R Mahadevan made these observations while dismissing a plea challenging the referral of a trademark dispute to arbitration, reaffirming that contractual disagreements involving intellectual property rights (IPRs) can be resolved through arbitration unless they involve sovereign or public (in rem) rights.

    S. 11 SARFAESI Act | DRT Can't Decide Disputes Between Banks Over Secured Assets; Must Be Referred To Arbitration : Supreme Court

    Case Title: BANK OF INDIA VERSUS M/S SRI NANGLI RICE MILLS PVT. LTD. & ORS.

    Citation : 2025 LiveLaw (SC) 616

    In a significant ruling under the SARFAESI Act, 2002 (“Act”), the Supreme Court today (May 23) held that inter-creditor disputes (between secured creditors) must be resolved through arbitration under Section 11 of the Act read with the Arbitration & Conciliation Act, 1996 (“Arbitration Act”).

    Unlike the Arbitration and Conciliation Act, which requires a written agreement for reference, Section 11 of the Act creates a statutory mandate for arbitration, eliminating the need for any such agreement, the court said.

    “Section 11 of the SARFAESI Act, provides for a statutory arbitration for any dispute mentioned therein between any of the parties enumerated thereunder. There is no need for an explicit written agreement to arbitrate between such parties in order to attract Section 11 of the SARFAESI Act. The said provision creates a legal fiction as regards the existence of an arbitration agreement notwithstanding whether such agreement exists or not in actuality.”, the court added.

    High Courts

    Bombay High Court

    Acquiescence To Termination Notice Of Agreement Bars Interim Relief U/S 9 Of Arbitration Act: Bombay High Court

    Case Title: Jupicos Entertainment Private Limited Versus Probability Sports (India) Pvt. Ltd. and Ors.

    Case Number: Arbitration Appeal (L) No. 12967 Of 2025

    The Bombay High Court bench of Chief Justice Alok Aradhe and Justice M.S. Karnik has held that when a party is aware of a termination notice issued by the other party and conducts itself on the assumption that the termination has taken effect, it cannot later seek interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) on the ground that the other party is proceeding to assign the subject matter of the contract to a third party and should therefore be restrained.

    The court at the outset noted that prima facie, there is merit in the submission of the learned Senior Advocate for MCA that the agreement between Jupicos and Probability Sports does not suggest an agency relationship with MCA. Instead, it appears to be an independent, principal-to-principal contract.

    It further added that the Single Judge's observation that the agreement merely permitted Jupicos to operate a team—without conferring ownership or vested rights—seems plausible. The agreement also appears to be inherently determinable, as evidenced by its termination clause.

    Interim Relief U/S 9 Of Arbitration Act Must Be Sought With 'Reasonable Expedition': Bombay High Court

    Case Title: Ashoka Buildcon Ltd. vs. Maha Active Engineers India Pvt. Ltd. & Anr.

    Citation: 2025 LiveLaw (Bom) 192

    The Bombay High Court bench of Justice A. S. Chandurkar and Justice Rajesh Patil have held that an applicant under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) must approach the court with reasonable expedition. Delay of several years without adequate explanation is a material factor that militates against the grant of such relief.

    The court observed that relief under Section 9 of the Act is discretionary and must be guided by the settled principles of interim relief, namely the existence of a prima facie case, balance of convenience, and irreparable harm. An appellate court can interfere with the discretionary order of the trial court only if such discretion has been exercised arbitrarily, capriciously, or in ignorance of settled legal principles.

    [Arbitration Act] S.37 Not An Efficacious Alternate Remedy After Rejection Of Plea U/S 34 Seeking Enhanced Compensation: Bombay High Court

    Case Title – Kisanlal Bairudas Jain and Ors. v. Union of India

    Neutral Citation – 2025: BHC- AC:21612-DB

    The Division Bench of Bombay High Court comprising Justices Jitendra Jain and M.S. Sonak allowed writ petitions seeking enhanced solatium under National Highways Act, 1956 in view of the decision of the Supreme Court in Union of India v Tarsem Singh and Ors. While doing so the Court rejected the argument of the Respondent that the petitions ought to be dismissed as the Petitioners have an alternate remedy under Section 37, Arbitration and Conciliation Act, 1996 (“ACA”)

    The Court held that while exercising its powers under Section 37, ACA the Court is not empowered to modify the award and grant enhanced compensation. This would make Section 37 an inefficacious alternate remedy and in view of this fact the Court can exercise its extraordinary powers under Article 226, Constitution of India.

    Calcutta High Court

    Arbitrator Can Fix Fee In Consultation With Parties Without Recourse To A&C Act; Quantum Can't Be Challenged Under Article 227: Calcutta HC

    Case Title: P & P Business Private Limited vs. Marco Francesco Shoes (India) Private Limited

    Case Number: C.O.140 of 2023

    The Calcutta High Court bench of Justice Bihas Ranjan De. has observed that an arbitrator can indeed fix his remuneration, and this can be done in a manner that may not comply with the Fourth Schedule of the Arbitration and Conciliation Act, 1996, provided that such a decision is made in consultation with the parties involved. When parties contractually agree on a fee, the Fourth Schedule will not be applicable.

    The court held that a party cannot file a revision application under Article 227 of the Constitution solely based on dissatisfaction with an arbitrator's order regarding quantum of remuneration as it does not fall within the scope of Section 37 (2) of the Act. The appropriate recourse available to the petitioner would be to challenge the final award under Section 34 of the Act.

    Absence Of Express Liberty In Withdrawal Order To File Fresh Execution Petition Does Not Deny Benefit U/S 14 Of Limitation Act: Calcutta HC

    Case Title: Sri Arun Kumar Jindal & Anr. VS. Smt. Rajni Poddar & Ors.

    Case Number:C.O.441 of 2023

    The Calcutta High Court bench of Justice Bibhas Ranjan De has held that withdrawal of an execution petition for enforcement of an arbitral award on the ground of lack of jurisdiction, when such ground is clearly stated in the withdrawal application, does not bar the petitioner from refiling before the appropriate forum, even if the court's order does not expressly grant liberty to refile. Accordingly, the benefit of Section 14 of the Limitation Act, 1963 (Limitation Act) cannot be denied.

    The court noted that the Supreme Court in Delhi Development Authority vs. M/s Durga Construction Co. held that Cases of delay in re-filing differ from those of initial filing, as the party has already demonstrated intent to seek legal remedies by taking preliminary steps. Thus, it cannot be presumed that they have abandoned their right to legal recourse.

    The Apex Court further held that however, if the initial filing is grossly inadequate or contains fundamental defects, it may be treated as nonest, with no legal effect. In such instances, only the date on which defects are rectified would be considered the actual date of filing.

    Evaluation Of Alternative Propositions By Arbitrator For Interim Award Does Not Constitute Inherent Contradiction Or Perversity: Calcutta HC

    Case Title: Star Track Agency Private Limited Vs. Efcalon Tie Up Private Limited

    Case Number:F.M.A.T. No. 57 of 2021

    The Calcutta High Court bench of Justices Sabyasachi Bhattacharyya and Uday Kumar has held that considering alternative propositions by the Arbitrator and proceeding on the premise that the award holder would be entitled to an interim award under either scenario does not amount to an inherent contradiction. Evaluating alternatives is a legitimate judicial exercise and does not tantamount to perversity.

    The court noted that in view of the lease of the licensor itself having not been renewed at that point of time by the superior landlord, it was not possible to grant a sub-lease of the premises to the licensee, for which only a license was being granted instead of a sub-lease.

    It further added that the grant of a sub-lease, even after the lease of the licensor was subsequently renewed by the superior landlord, would not be an automatic affair, since Clause 4 provided that the licensor would negotiate the grant of a sub-lease even thereafter. The expression “negotiate” denudes the prospective assurance to grant a sub-lease of certainty but leaves it to further negotiation between the parties.

    Writ Against Third Party Is Maintainable Despite Arbitration Clause When There Are No Disputes Between Contracting Parties: Calcutta HC

    Case Title: INDIA AND OTHERS VERSUS SUNIL SAHA AND OTHERS

    Case Number: MAT 806 OF 2024 AND FMA 735 OF 2024

    The Calcutta High Court bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) has held that when there are no disputes or differences between the parties to an agreement containing an arbitration clause, a writ petition may be entertained against a third party for arbitrary deduction of demurrage amounts. The existence of an arbitration clause between the contracting parties cannot, by itself, be a ground to refuse the maintainability of such a writ petition.

    It further added that the grant or refusal of the writ is at the Court's discretion and can only be issued if an existing legal right of the applicant or duty of the respondent is established. The writ is intended to enforce rights that are already established, not to create new ones.

    'Non-Consideration Of SC Judgment Amounts To Patent Illegality': Calcutta High Court Sets Aside Award On Grounds Of Unilateral Appointment

    Case Title: VIRGO SOFTECH LIMITED & ANR. VS SREI EQUIPMENT FINANCE LTD.

    Case Number: AP-COM/361/2025

    The Calcutta High Court bench of Justice Shampa Sarkar has held that non-consideration of a judgment of the Supreme Court amounts to patent illegality, which is a valid ground for setting aside an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) particularly when the award is passed by an arbitrator unilaterally appointed by one party.

    The Supreme Court recently in Central Organisation for Railway Electrification vs. ECI SPIC SMO MCML (JV) A joint Venture Company after citing its own judgment in Perkins Eastman Architects DPC and Another vs. HSCC (India) Ltd.(2019) held that the reason is clear that whatever advantage a party may derive by nominating an arbitrator of its choice would get counter-balanced by equal power with the other party.

    Execution Of Discharge Voucher Not A Bar To Claim Higher Compensation If Provided For By IRDA Circular: Calcutta High Court

    Case Title: The Oriental Insurance Company Limited Vs. The Reliance Jute Mills (International Limited)

    Case Number: AP-COM/186/2024 Old Case No. AP/322/2020

    The Calcutta High Court bench of Justice Aniruddha Roy has held that once the liability or quantum of a claim under an insurance policy is established, the Insurance Company must not withhold the claim amount and must comply with Insurance Regulatory and Development Authority (IRDA) Circular which entitles the Insured to claim a higher amount.

    It further held that the Circular clearly provided that if an insured is dissatisfied with the quantum of compensation, they are entitled to approach judicial or statutory forums for higher compensation. Execution of a discharge vouche.

    Interim Measures U/S 9 Of Arbitration Can't Be Sought By MSME During Conciliation Proceedings: Calcutta High Court

    Case Title: Dhananjai Lifestyle Limited vs. Sanvie Retail Private Limited

    Case Number: AP-COM/980/2024

    The Calcutta High Court bench of Justice Shampa Sarkar has held that interim measures under Section 9 of the Arbitration Act can be sought by the MSME only after mandatory conciliation before the MSME Council fails and the dispute proceeds to arbitration—either conducted by the Council or referred to an arbitral institution. Only then do the provisions of the Arbitration Act apply. Consequently, seeking relief under the Arbitration Act during conciliation is clearly prohibited under section 77 of the Arbitration Act.

    The Court further added that however, an exception allows such proceedings if necessary to preserve rights, but only in exceptional cases. This reflects the legislature's intent to promote non-adversarial dispute resolution. In this case, the petitioner has already issued a notice under the Negotiable Instruments Act following cheque dishonour.

    Court Is Not Appropriate Forum To Seek Interim Relief During Arbitration Proceedings: Calcutta High Court

    Case Title: Mittal Technopack Private Limited Vs Ideal Real Estate Private Limited And Anr.

    Case Number: AP-COM/413/2025

    The Calcutta High Court bench of Justice Shampa Sarkar has held that the appropriate forum for seeking interim relief after the constitution of the Arbitral Tribunal is the Tribunal itself under Section 17 of the Arbitration Act. Recourse to the court under Section 9 is permitted during the arbitration proceedings only if the remedy under Section 17 is found to be inefficacious.

    The court observed that a post-award injunction application under Section 9(1) allows a party to seek interim relief from the Court after the arbitral award but before its enforcement under Section 36. However, per Section 9(3), once the arbitral tribunal is constituted, the Court will only entertain such applications if remedies under Section 17 are ineffective.

    It further added that the arbitral tribunal holds the power to grant interim relief during the arbitration, including after an interim award but before enforcement. This power ends when the arbitral proceedings terminate, and the arbitrator becomes functus officio. This legal position has been effective since August 30, 2019.

    Original Claim Can Be Amended At Argument Stage In Arbitration Proceedings, Provisions Of CPC Do Not Apply Strictly: Calcutta High Court

    Case Title: Steel Authority of India Limited Vs H. R. Construction Private Limited

    Case Number: C.O. 4004 of 2024

    The Calcutta High Court bench of Justice Shampa Dutt (Paul) has held that an amendment to the original claim may be permitted during arbitral proceedings, even at the stage of final arguments, particularly when costs have been imposed on the party seeking the amendment and accepted by the opposite party—provided the amendment does not materially alter the nature of the original claim or cause prejudice.

    It further held that while Civil Procedure Code, 1908 (CPC) provisions may be applied in arbitration, they are not to be strictly enforced to bar such amendments under Order VI Rule 17, given the more flexible framework of the Arbitration and Conciliation Act, 1996.

    Delhi High Court

    Ad-Hoc Arbitrator Can Grant Interest U/S 16 Of MSMED Act, Even If Reference Was Not Made To MSME Council: Delhi High Court

    Case Title: Shristi Infrastructure Development vs Scorpio Engineering Private Limited and Anr.

    Citation: 2025 LiveLaw (Del) 521

    The Delhi High Court bench of Justice Jasmeet Singh held that an ad-hoc arbitrator (appointed under the Arbitration and Conciliation Act, 1996) is empowered to grant interest rate contemplated under Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, even if the reference was not made to the MSME Facilitation Council for resolving disputes.

    The High Court further held that under Section 18(1) of the MSMED Act, reference to the Facilitation Council is optional and not mandatory. Since Scorpio had not approached the Facilitation Council, Section 18 of the MSMED Act was not triggered. Therefore, the ordinary arbitral proceedings were valid and unaffected.

    SMAS Auto-Leasing Entitled To Protection & Preservation Of EVs Leased To 'Blu Smart', 'Gensol' Pending Arbitration: Delhi High Court

    Case Title: SMAS Auto Leasing India Private Limited v. Gensol Engineering Limited & Ors.

    Citation: 2025 LiveLaw (Del) 528

    The Delhi High Court bench of Justice Jyoti Singh has granted interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 to the the petitioner who is the owner of electric vehicles (EVs) leased under Master Lease Agreements upon apprehensions of financial distress, default in lease payments by the respondents and a risk of dissipation or deterioration of assets pending arbitration. The Court restrained the respondents from transferring or encumbering the EVs.

    No Objections U/S 47 Of CPC Can Be Moved By Judgment Debtor Against Execution Of Award U/S 36 Of A&C Act: Delhi High Court

    Case Title – Anglo American Metallurgical Coal Pvt Ltd. v. MMTC Ltd.

    Citation: 2025 LiveLaw (Del) 538

    The Delhi High Court Bench of Justice Jasmeet Singh has observed that a judgment debtor is not entitled to move objections under Section 47, CPC in an application for execution of award under Section 36, Arbitration and Conciliation Act, 1996 (“ACA”) as it would amount to effectively opening a second round for challenging the Award which would undermine the provision of section 34 i.e. challenge to Award on limited grounds and go against the intent of ACA.

    The Court clarified that the provisions of CPC are only applicable to the extent of “enforcement” of an Award such as attachment, sale, auction, detention etc. which are reflected in Order XXI, CPC. The legislature did not intend to permit a challenge to an Award during enforcement proceedings again on merits as this would be contrary to the objectives of ACA which aim to ensure finality and limited judicial interference.

    When Deciding Application For Appointment Of Arbitrator, Court Cannot Examine Whether Claim Is Barred By Res Judicata: Delhi High Court

    Case Title – Hindustan Construction Company Ltd v. Indian Strategic Petroleum Reserves Ltd.

    Citation: 2025 LiveLaw (Del) 551

    The Delhi High Court Bench of Justice Jyoti Singh has observed that it is not open to the referral court in a petition filed under Section 11, Arbitration and Conciliation Act, 1996 (“ACA”) to examine the issue whether the claim is barred by res judicata. Such an examination falls within the domain of the Arbitral Tribunal. The Court observed that it is settled that in the scope of jurisdiction under Section 11, ACA, the referral Court does not examine the tenability of the claims sought to be referred to arbitration by the applicant. The enquiry at this stage of appointment of arbitrator is restricted to the existence of arbitration agreement and/or whether the petition itself is barred by limitation.

    Initial Filing Without Essential Documents Non Est In Law, Limitation Can't Be Circumvented By Curing Defects: Delhi High Court

    Case Title: UNION OF INDIA Versus M/S GR-GAWA R(J.V.)

    Citation: 2025 LiveLaw (Del) 565

    The Delhi High Court bench of Justice Purushaindra Kumar Kaurav has held that an initial filing made without the essential documents like attaching impugned award etc. required for adjudication is non est in law and has no legal existence. Such a filing, made merely to evade the limitation period under Section 34(3) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) cannot be considered valid. The court at the outset noted that the final filing dated 20.01.2025 spans 6,677 pages, in stark contrast to the initial 146-page filing. This significant disparity clearly indicates that the initial filing was a mere formality, intended only to halt the limitation period.

    It further added that the skeletal nature of the original filing, lacking essential pleadings and annexures, reflects an attempt to bypass the limitation law. Such a filing cannot be regarded as a bona fide institution of proceedings under Section 34 of the Arbitration Act.

    Contempt Court Can Reverse Benefits Obtained From Disobeying Orders U/S 9 & 17 Of Arbitration Act: Delhi HC

    Case Title:M/S Rhine Power Pvt. Ltd. Versus M/S Ramprastha Promoters And Developers Pvt. Ltd. & Ors.

    Citation: 2025 LiveLaw (Del) 568

    The Delhi High Court bench of Justice Anish Dayal has held that the contempt court is empowered to issue directions to reverse any benefits obtained in disobedience of an order passed under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) to ensure that parties are restrained from violating the court's orders.

    The Supreme Court in Balwantbhai Somabhai Bhandari v Hiralal Somabhai Contractor (2023) held that the contempt court does have the power to declare a contemptuous transaction as void, even if such transfer pendente lite is not void ab initio under Section 52 of the Transfer of Property Act, 1882.

    The Apex Court further held that in contempt proceedings, the court can declare such transactions void or direct their reversal to ensure that the contemnor does not benefit from disobedience of court orders. This includes issuing appropriate directions to authorities to nullify any advantage gained through such contumacious conduct, thereby upholding the majesty of law.

    Arbitrator's Decision To Choose Internationally Recognised Formula Based On Expertise For Computing Damages Can't Be Faulted: Delhi High Court

    Case Title: DELHI DEVELOPMENT AUTHORITY Versus M/S NARAINDAS R ISRANI

    Citation: 2025 LiveLaw (Del) 570

    The Delhi High Court bench of Justice Manoj Kumar Ohri has held that different formulae may be applied depending on the circumstances, and the choice of method for computing damages falls within the arbitrator's discretion. Sections 55 and 73 of the Indian Contract Act, 1872 (Contract Act) do not prescribe any specific formula for the calculation of damages. Therefore, the arbitrator's decision to apply any internationally recognized method, based on their expertise, cannot be faulted.

    The court noted that the Arbitral Tribunal (AT) reviewed the evidence, including the hindrance register, and concluded that the delay was attributable to the petitioner. These are factual findings within the AT's domain, and this Court will not reappreciate the evidence or assess its sufficiency. Based on the above, it held that there is no patent illegality or apparent error in the award. As for the lack of detailed calculations, the AT's reasoning sufficiently explains the partial allowance of the claim and the basis for the awarded amount.

    Limitation For Application U/S 11(6) Of Arbitration Act Can't Be Bypassed By Claiming Advocate Was Not Authorised To Issue Notice: Delhi High Court

    Case Title: RINKOO AGGARWAL versus GAURAV SABHARWAL & ANR.

    Citation: 2025 LiveLaw (Del) 572

    The Delhi High Court bench of Justice Jyoti Singh has held that the bar of limitation for filing an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) seeking the appointment of an arbitrator, cannot be circumvented merely on the ground that the demand-cum-arbitration invocation notice was issued by the petitioner's counsel without proper authorization. The court held that such a contention, if accepted, would render the limitation period for filing such applications meaningless and defeat the very purpose of prescribing a time frame.

    The Court also noted that the Apex Court further clarified that while determining the issue of limitation in a petition under Section 11(6), the referral Court would confine its inquiry to examining whether the petition is within the period of limitation of 03 years or not. It further said that the referral Court will not conduct an intricate evidentiary inquiry into the question whether the claims raised by the applicant are time barred and this would be left for determination by the Arbitrator.

    Waiver To Section 12(5) Of Arbitration Act Has To Be Given After Constitution Of The Tribunal: Delhi High Court

    Case Title – M.V. Omni Projects (India) Ltd. v. Union of India through Chief Engineer Northern Railways & Anr.

    Citation: 2025 LiveLaw (Del) 573

    Th Delhi High Court Bench of Justice Jasmeet Singh has observed that the party giving no-objection to the applicability of Section 12(5), Arbitration and Conciliation Act, 1996 (“ACA”) has to give such no-objection after the constitution of the Arbitral Tribunal. The waiver to applicability has to be done after the arbitrators are appointed with the names and details. The Court also observed that any waiver before the constitution of the arbitral tribunal is no waiver in the eyes of law.

    The Court observed that the waiver contemplated in the proviso of Section 12(5), ACA applies not to the manner or the mechanism under which the Arbitral Tribunal is to be constituted but to the constitution/individual members of the Arbitral Tribunal. The Court referred to the judgment of the Hon'ble Supreme Court in Bharat Broadband v. United Telecom (2019) 5 SCC 755, whereby it was clarified that “express agreement in writing” to waive refers to a “person” who is interdicted by the Seventh Schedule. If an individual falls within any of the categories as mentioned in the Seventh Schedule, then the said person/s are ineligible to be appointed as arbitrator and only to remove the ineligibility, the party may waive by an express agreement the said ineligibility in writing qua the person/s who are ineligible to be appointed.

    No Damages For Loss Of Profit In Absence Of Proof Of Missed Profitable Ventures Due To Delay In Contractual Payment: Delhi High Court

    Case Title: UNION OF INDIA Versus AHLUWALIA CONTRACTS (INDIA) LTD.

    Citation: 2025 LiveLaw (Del) 576

    The Delhi High Court bench of Justices Vibhu Bakhru and Tejas Karia has held that unless it is demonstrated that the delay in payment for the completion of the work contract prevented the contractor from undertaking other profitable ventures, damages for loss of profits cannot be awarded.

    The court noted that the 15% mark-up under the contract applies only to deviations involving extra items, quantities, or substitutions, to cover overheads and costs. However, the respondent's claim did not arise from such deviations but sought compensation for costs incurred due to prolongation of the contract, which was allegedly caused by the appellant. Based on the above, it held that the Arbitral Tribunal's rejection of the respondent's claim, citing the 15% mark-up under Schedule 'F', is unsustainable. Clause 2(x) of Schedule 'F' does not apply to claims for additional costs due to prolongation of work. Therefore, the award is vitiated by patent illegality to that extent.

    Questions On Legality Of Revival Of Arbitral Proceedings To Be Adjudicated By Tribunal U/S 16 Of A&C Act: Delhi High Court

    Case Title: MDD Medical Systems (India) Pvt. Ltd. and Anr. v. Delhi International Arbitration Centre and Ors.

    Citation: 2025 LiveLaw (Del) 581

    The Delhi High Court bench of Justice Manoj Kumar Ohri, while hearing a writ petition challenging the decision of Delhi International Arbitration Centre (Respondent No. 1) to revive arbitral proceeding after closing the proceedings due to non-filing of the State of Claim (SOC) observed that since the proceedings have been revived, the Arbitral Tribunal is the competent authority to adjudicate and rule upon.

    The bench observed that the three-month time limit under Section 18 of the MSMED Act pertains to the reference to the Facilitation Council and not the arbitration. Section 18(3) of the Act states that once a reference is made to arbitration, the provisions of the A&C Act would apply to the dispute. A Co-ordinate Bench in Indian Highways Management Company Limited v. Mukesh & Associates (2021) took the same view wherein it was observed that 'reference' in Section 18(5) has to be construed as a reference to the facilitation council. Furthermore, the timeline ascribed under Section 18(5) of the Act is directory and not mandatory, unlike the timeline ascribed under Section 29A of the A&C. Unlike Section 18(5), non-adherence to the prescribed time limit under Section 29A would result in the termination of the mandate of the arbitrator.

    If No Bonafide Negotiations Occur After Arbitration Notice, Period Cannot Be Excluded From Limitation: Delhi High Court

    Case Title: Tirupati Constwell Private Limited Versus Delhi States Employees Federation CGHS Ltd

    Citation: 2025 LiveLaw (Del) 582

    The Delhi High Court bench of Justice Sachin Datta has held that if, after the issuance of a notice invoking arbitration, no bonafide negotiations take place between the parties, and the limitation period for filing an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) expires, the time allegedly spent in such negotiations cannot be excluded while computing the limitation period under Section 11.

    The court noted that in Geo Miller & Company Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Ltd., (2020), the Supreme Court held that although the limitation period may have commenced, the time spent in bonafide negotiations for an amicable settlement would be excluded when determining whether a petition under Section 11(6) of the Arbitration Act was filed within the limitation period.

    Intent Of S.11(6) Of Arbitration Act Is Not To Confer Jurisdiction On Courts Incompetent To Entertain Such Applications: Delhi High Court

    Case Title: IIFL HOME FINANCE LTD versus PUNKAJ BHAGCHAND CHHALLANI & ORS

    Citation: 2025 LiveLaw (Del) 583

    The Delhi High Court bench of Justice Sachin Datta has held that the intent of Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) cannot be interpreted to confer jurisdiction on a court that is otherwise incompetent to entertain an application under this provision.

    The court noted that section 3 of the Arbitration Act provides that a written communication is deemed received if sent to the addressee's last known business or mailing address by any method that records the delivery attempt. In this case, the petitioner has made multiple attempts to serve the respondents, thereby fulfilling its duty to effect service.

    It further observed that the arbitration clause in the Standard Terms and Conditions governing the parties' agreements is silent on the “seat and venue of arbitration.” The Supreme Court, in Ravi Ranjan Developers (P) Ltd. v. Aditya Kumar Chatterjee (2022), held that Section 11(6) of the Arbitration Act cannot be interpreted to empower a High Court lacking territorial jurisdiction to entertain an application for the appointment of an arbitrator.

    Appointment Of Arbitrator As 'Observer' In Another Matter Does Not Render Him Ineligible Under 5th & 7th Schedule Of A&C Act: Delhi High Court

    Case Title: RAM KRISHAN ASSOCIATES PVT. LTD. versus ASIAN HOTEL (NORTH) LTD.

    Citation: 2025 LiveLaw (Del) 585

    The Delhi High Court bench of Justice Jasmeet Singh has held that the appointment of an arbitrator as an observer in a matter unrelated to the arbitration dispute does not constitute de facto or de jure ineligibility under the Fifth or Seventh Schedules of the Arbitration and Conciliation Act, 1996 (Arbitration Act). Consequently, the arbitrator's mandate cannot be terminated on this ground under Section 14 of the Act. However, the court permitted the petitioner to raise this objection under Section 34 after the award is passed.

    The court noted that the Delhi High Court in National Highways Authority of India v. K.K. Sarin & Ors., 2009 held that an important question arises as to whether an unsuccessful challenge to the arbitrator under Section 13(1) of the Arbitration Act confines the aggrieved party's remedy solely to Section 34, given that Section 13(5) does not refer to Section 14. However, interpreting the provision in this manner would render the concept of de jure inability—such as bias—ineffective.

    Mandate Of MSME Council Not Automatically Terminated For Failure To Refer Dispute To Arbitration Within 90 Days: Delhi High Court

    Case Title: MDD MEDICAL SYSTEMS (INDIA) PVT. LTD. versus DELHI INTERNATIONAL ARBITRATION CENTRE AND ORS.

    Citation: 2025 LiveLaw (Del) 591

    The Delhi High Court bench of Justice Manoj Kumar Ohri has held that the mandate of the MSME Facilitation Council to refer a dispute to arbitration under Section 18(3) of the Micro, Small and Medium Enterprises Development (MSMED) Act, following the failure of conciliation under Section 18(2), is not automatically terminated if the referral is not made within 90 days as prescribed under Section 18(5). Unlike Section 29A of the Arbitration and Conciliation Act, 1996 (Arbitration Act) Section 18(5) of the MSMED Act does not specify any consequences for non-compliance with the 90-day timeline.

    Pre-Deposit Of Awarded Amount Through Bye-Laws For Entertaining Plea U/S 34 Of Arbitration Act Is Impermissible: Delhi High Court

    Case Title: Harshvardhan Metals Ltd & Anr. Versus ISF Commodities (P) Ltd

    Citation: 2025 LiveLaw (Del) 595

    The Delhi High Court bench of Justice Jasmeet Singh has held that Bye-laws may serve as operational guidelines, but they cannot impose conditions that conflict with statutory rights. The Court held that when there is no requirement of depositing the awarded amount as a precondition for filing an application under Section 34 of the Arbitration Act to set aside an award, any attempt to introduce such a requirement through bye-laws is impermissible.

    The court at the outset observed that the right to appeal under Bye-Law 15.40 and the right to challenge an arbitral award under Bye-Law 15.41 must be interpreted harmoniously. Bye-Law 15.40.1 requires a party dissatisfied with an arbitral award to deposit the awarded amount with the Exchange before filing an appeal, reflecting an intent to ensure a genuine financial stake in the outcome.

    Interest Ceases To Accrue On Decretal Amount Deposited In Court Registry When Award Holder Has Knowledge Of Deposit: Delhi High Court

    Case Title: PCL STICCO (JV) versus NATIONAL HIGHWAYS AUTHORITY OF INDIA

    Citation: 2025 LiveLaw (Del) 596

    The Delhi High Court bench of Justices Vibhu Bakhru and Tejas Karia has held that once the Judgment Debtor deposits the decretal amount with the court registry pursuant to a court order, and the Award Holder has notice of such deposit, interest on the deposited amount ceases to accrue. Consequently, interest can only be claimed on the remaining outstanding amount, not on the sum deposited with the court.

    The court noted that although the Judgment Debtor had challenged the Arbitral Award, no court had passed any stay order or restrained enforcement under Section 36 of the Arbitration Act. The Award Holder remained entitled to enforce the Award at all times and had, in fact, filed an enforcement petition under Section 36 on 02.11.2020. In those proceedings, the learned Single Judge directed the Judgment Debtor to deposit the awarded amount with the Registry of the Court.

    Opposite Party's Failure To Reply To S.21 Notice Doesn't Imply Consent To Appointment Of Named Arbitrator: Delhi High Court

    Case Title – M/s Supreme Infrastructure India Limited v Freyssinet Memard India Pvt. Ltd.

    Citation: 2025 LiveLaw (Del) 599

    The Delhi High Court bench of Justice Jyoti Singh while setting aside an arbitral award has observed that unilateral appointment of arbitrator vitiates the award and if the opposite party fails to reply to the notice under Section 21, Arbitration and Conciliation Act, 1996 (“ACA”), then such inaction cannot lead to an inference as to implied consent or acquiescence of the party to appointment of the named Arbitrator. The Court held that in such a situation the only recourse available to the party is to invoke the jurisdiction of the Court for appointment of an arbitrator.

    S.10 Of General Clauses Act Applies Only If S.34 Application Was Filed Within Time, Court Was Closed On Last Day Of Limitation: Delhi HC

    Case Title: VASISHTA MANTENA NH04 JV & ORS. versus Mr. Ashish Kothari, Adv. BLACKLEAD INFRATECH PVT. LTD.

    Citation: 2025 LiveLaw (Del) 603

    The Delhi High Court bench of Justices Hari Shankar and Ajay Digpaul has held that the benefit of Section 10 of the General Clauses Act is available only when the petition is filed within the normal limitation period that is 90 days as prescribed under section 34(3) of the Arbitration Act and the court was closed on the last day of that period. It does not apply when the court was closed on the last day of the extendable period under proviso to Section 34(3) of the Arbitration Act.

    The court at the outset noted that in UOI v. Popular Construction, the Supreme Court held that the time limits prescribed under Section 34(3) of the Arbitration Act—three months plus an extendable period of 30 days—are mandatory. A Section 34 petition cannot be filed beyond this combined period from the date of receipt of the arbitral award. The court further observed that the Section 34 petition was initially presented to the Registry on 21 August 2023 but was not accompanied by any documents, including the copy of the award under challenge.

    'Conduct Is Disquieting To Court's Conscience': Delhi High Court Dismisses Applications For Condonation Of Delay In Filing & Re-Filing Appeal

    Case Title: KAL AIRWAYS PRIVATE LIMITED versus SPICEJET LIMITED & ANR.

    Citation: 2025 LiveLaw (Del) 604

    The Delhi High Court bench of Justices C. Harishankar and Ajay Digpaul observed that the conduct of the appellants in this case is deeply troubling to the court's conscience. They neither informed the respondents about the filing of the present appeals nor disclosed the same to the court, even though the respondents' appeals challenging the same arbitral award had been listed and heard multiple times. Under these circumstances, the delay in filing and refiling the appeals cannot be condoned due to the appellants' evident lack of bona fide.

    The court at the outset observed that while courts generally adopt a liberal approach toward condoning delays in refiling, this principle is not absolute. The leniency is based on the idea that if a party initially approaches the court in time, delays in curing defects and refiling are usually due to ministerial lapses—often attributable to counsel—and not a delay in seeking legal remedy. Hence, such delays are more readily condoned than delays in the original filing of proceedings.

    Fresh Cause Of Action Cannot Accrue U/S 18 Of Limitation Act If Liability Is Acknowledged After Expiry Of Period Of Limitation: Delhi High Court

    Case Title: M/S CONSTRUCTION INDUSTRY DEVELOPMENT COUNCIL Versus M/S MCM WORLDWIDE PRIVATE LIMITED & ANR.

    Citation: 2025 LiveLaw (Del) 614

    The Delhi High Court bench of Justices Subramonium Prasad and Harish Vaidyanathanshankar has held that for a valid acknowledgment under section 18 of the Limitation Act, 1963 certain essential requirements must be met. Firstly, the acknowledgment must be made before the relevant period of limitation has expired. Secondly, it must pertain specifically to the liability concerning the right in question. Lastly, the acknowledgment must be in writing and signed by the party against whom such right is claimed.

    Since, in the present case, the liability was acknowledged only after the expiry of the limitation period, the claims could not be adjudicated by the Arbitrator or the District Judge. Consequently, both the award and the District Judge's order affirming it were set aside on the grounds of public policy and patent illegality.

    No Fixed Format For Sending Notice U/S 21 Of A&C Act, Outlining Clear Intention To Adopt Arbitration Is Sufficient: Delhi High Court

    Case Title: NATIONAL RESEARCH DEVELOPMENT CORPORATION & ANR. versus M/S ARDEE HI-TECH PVT. LTD.

    Citation: 2025 LiveLaw (Del) 615

    The Delhi High Court bench of Justice Jasmeet Singh has held that there is no prescribed format for a notice invoking arbitration. The legal requirement is that the party invoking arbitration must clearly outline the disputes between the parties and state that if these disputes remain unresolved, arbitration proceedings will be initiated. The intention to resolve the disputes through arbitration must be explicitly stated in the notice.

    The court noted that the Supreme Court in Aslam Ismail Khan Deshmukh v. ASAP Fluids Pvt. Ltd. &Anr., 2024 held that when determining the issue of limitation under Section 11(6) of the Arbitration Act, the referral court's role is limited to examining whether the application has been filed within the three-year limitation period. It should not engage in a detailed inquiry into whether the petitioner's claims are time-barred.

    Plea Of Waiving Arbitration Clause Cannot Be Examined By Referral Court U/S Of 8 A&C Act, Falls Within Domain Of Tribunal: Delhi High Court

    Case Title – Porto Emporios Shipping Inc v Indian Oil Corporation Limited

    Citation: 2025 LiveLaw (Del) 616

    The Delhi High Court bench of Justice Purushaindra Kumar Kaurav while allowing an application under Section 8, Arbitration and Conciliation Act, 1996 (“ACA”) has observed that the plea of waiver of arbitration clause is a plea concerning rights in personam and does not render the dispute to be manifestly non-arbitrable. Consequently, the determination of such a plea properly falls within the jurisdictional domain of the Arbitral Tribunal itself.

    The Court held that the solitary issue for consideration before it was whether under the limited periphery of the scope and extent of enquiry envisaged under Section 8, ACA, the plea of waiver of the arbitration clause could be meticulously examined by the referral court in the present case.

    After a detailed analysis of the scheme of ACA, the Court concluded that the legislative scheme couched in Sections 5,8,11,16,34 and 37 of ACA would emphatically underscore that the interjection to arbitral proceedings at the inception is an exception to the general rule.

    Arbitration Clause Prevails Over Exclusive Jurisdiction Clause, Court At Designated Seat Retains Jurisdiction: Delhi High Court

    Case Title: M/S KLA CONST TECHNOLOGIES PVT LTD Versus M/S GULSHAN HOMZ PRIVATE LIMITED

    Citation: 2025 LiveLaw (Del) 623

    The Delhi High Court bench of Justice Purushaindra Kumar Kaurav has held that when an exclusive jurisdiction clause is expressly made "subject to" the arbitration clause, and the arbitration clause designates a different territorial location as the seat of arbitration, the arbitration clause prevails. In case of conflict, the jurisdiction of the court is determined by the seat designated in the arbitration agreement which overrides the exclusive jurisdictional clause mentioned in the agreement.

    The court noted that the Supreme Court in Ramkishorelal held that the golden rule of interpretation mandates that the entire document must be read as a whole in order to cull out a true intention of the parties by using the ordinary and natural meaning of the words, while considering the context and background, including the status and expertise of the parties. It further added that where conflicting clauses exist—such as an earlier clause granting absolute title and a later clause imposing restrictions—the former generally prevails if it is clear and unambiguous. Courts should first strive to harmonize conflicting parts, and only if harmony is impossible should the later inconsistent clause be disregarded.

    Jammu and Kashmir and Ladakh High Court

    Court While Referring Parties To Arbitration Cannot Direct That Arbitral Award Should Be Filed Before It: Jammu & Kashmir High Court

    Case Title: GHULAM RASOOL BHAT Vs. SHAFEEQ FRUIT COMPANY

    Citation: 2025 LiveLaw (JKL) 181

    The Jammu & Kashmir and Ladakh High Court bench of Justice Sanjay Dhar has held that the court, while referring parties to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), cannot direct that the award, passed after the conclusion of the arbitration proceedings, be filed before it.

    The court noted that the Supreme Court in K. K. Modi vs. K. N. Modi, (1998) held that For an agreement to be considered an arbitration agreement, it must fulfill certain essential criteria. First, it must contemplate that the decision of the arbitral tribunal will be binding on the parties. Second, the tribunal's jurisdiction must arise from the consent of the parties, a court order, or a statute that clearly designates the process as arbitration.

    Jharkhand High Court

    Court Cannot Set Aside Entire Arbitral Award Due To Fraud In One Claim When Other Claims Rest On Different Grounds: Jharkhand High Court

    Case Title: Ranchi Municipal Corporation Versus M/s A2Z Waste Management (Ranchi) Limited

    Case Title: I.A. No. 12521 of 2024 In/and Commercial Appeal No. 16 of 2024 and Commercial Appeal No. 16 of 2024

    The Jharkhand High Court bench of Chief Justice M. S. Ramachandra Rao and Justice Rajesh Shankar has held that when two claims decided in an arbitral award are mutually unrelated, the court, under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), cannot set aside the entire arbitral award solely because a fraud was committed concerning one of the claims, while the other claims are based on entirely different reasoning and grounds.

    The court at the outset noted that the arbitral tribunal found that the non-payment of the tipping fee for December 2013 and the delay in payments from April to August 2011 constituted a breach of contract by the RMC. However, the claim regarding the 'supply of vehicles' was unrelated to the 'non-payment of the tipping fee' and was rejected by the tribunal due to fraud.

    Based on the above, it held that when the claims are unrelated to each other, on the basis of a fraud with regard to the claim regarding procurement of vehicles, the Commercial Court could not have interfered with the arbitral award with regard to the award of the claim to the Contractor regarding tipping fee.

    Karnataka High Court

    Once Parties Intend To Resolve Their Dispute By Arbitration, It Is Needless For Court To Decide Whether Partnership Was At Will: Karnataka HC

    Case Title: N. H. Gowda Versus Mr. Rangarama And Ors.

    Citation: 2025 LiveLaw (Kar) 179

    The Karnataka High Court bench of Chief Justice N. V. Anjaria and Justice K. V. Aravind has held that when both parties have agreed to resolve their disputes regarding the nature of the partnership through arbitration, it is unnecessary for the Court to determine whether the partnership is one "at will." Such issues are more appropriately left for adjudication by the arbitrator. The court further said that while directing the parties to resolve their dispute through arbitration, the interim arrangement ordered by the Commercial Court cannot be sustained without modification. The existing arrangement is impractical and disproportionately affects the interests of both parties, potentially leading to further litigation.

    Madhya Pradesh High Court

    Repetition Of Old & Overruled Arguments Not Sufficient To Reopen Concluded Adjudications In Review Petition Assailing Arbitration Order: MP High Court

    Case Title: M/S BANMORE ELECTRICALS PVT LTD THROUGH ITS DIRECTOR NIRMAL KUMAR JAIN Versus MADHYA PRADESH INDUSTRIAL DEVELOPMENT CORPORATION LIMITED

    Case Number: REVIEW PETITION No. 754 of 2025

    The Madhya Pradesh High Court Bench of Justice Milind Ramesh Phadke has held that repetition of old and overruled arguments is not enough to reopen concluded adjudications as the review proceedings under Order 47 Rule 1 r/w Section 114 of CPC challenging an arbitration order cannot be equated with the original hearing of the case. The scope of review is very limited.

    Appointing Arbitrator U/S 3(G)(5) Of National Highways Act Does Not Constitute Seat Of Arbitration, Is Rather A Convenient Venue: MP High Court
    Case Title – National Highways Authority of India v. Dinesh Singh & Others

    Case No. – Arbitration Appeal Nos. 99, 100, 101, 103, 105, 106, 107 of 2021

    The Madhya Pradesh High Court Bench at Gwalior of Justice Milind Ramesh Phadke has observed that appointment of arbitrator under Section 3(G)(5), National Highways Act, 1956 (“NH Act”) will not amount to the seat of the arbitrator rather it would be a convenient venue and therefore courts where a part of cause of action had arisen will also have jurisdiction over such arbitral proceedings.

    While holding so the Court highlighted the difference between ordinary arbitral proceedings arising out of a commercial contractual agreement where parties normally agree to a seat as opposed to statutory arbitrations such as the one mandated by NH Act where there is no contractual agreement and no seat or venue has been decided by the parties.

    Sikkim High Court

    S.29A Of Arbitration Act As Amended By 2019 Amendment Governs All Pending Arbitrations After Coming Into Force: Sikkim High Court

    Case Title: Union of India M/s Valecha Shivalaya – Interdril (JV)

    Case Title: Arb. A. No. 03 of 2024

    The Sikkim High Court bench of Justices Bhaskar Raj Pradhan and Biswanath Somadderhas held that section 29A, as amended by the 2019 Amendment, shall apply to all arbitration proceedings that were pending at the time the amendment came into force.

    The court at the outset observed that upon examining the communication dated 07.02.2023, it is evident that the respondent, despite adding a caveat, consented to extend the arbitration period, stating the extension was granted in anticipation of a lawful award.

    It further observed that under Section 29A(3) of the Arbitration Act, parties may extend the time to make an award by up to six months. Assuming 27.01.2022 as the date of completion of pleadings, the initial 12-month period under Section 29A(1) would end around 26.01.2023. The respondent's consent on 07.02.2023 would validly extend the time until approximately 26.07.2023. Hence, the award dated 23.02.2023 falls within the permissible period and is not time-barred.

    Rajasthan High Court

    Refund Of Liquidated Damages Imposed By Party Responsible For Delay In Work Can't Be Interfered With U/S 37 Of Arbitration Act: Rajasthan High Court

    Case Title: Rajasthan Urban Infrastructures Development Project Versus M/s National Builders

    Citation: 2025 LiveLaw (Raj) 176

    The Rajasthan High Court bench of Justices Avneesh Jhingan and Bhuwan Goyal has held that the imposition of liquidated damages by a party primarily responsible for the delay in completion of the work is unjustified. Therefore, the arbitrator's direction to refund such damages cannot be interfered with, given the limited scope of appellate intervention under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act).

    The Supreme Court in Punjab State Civil Supplies Corpo ration Limited & Anr. vs. M/s Sanman Rice Mills & Ors.(2024) held that the role of the Appellate court under section 37 of the Arbitration Act is not to determine whether the arbitral tribunal's decision is right or wrong, but merely to ensure that the decision under Section 34 was rendered within the statutory framework. The appellate court may interfere only if the court under Section 34 either overstepped its jurisdiction or failed to exercise it altogether. This supervisory power is comparable to the revisional jurisdiction of civil courts.

    Arbitral Award Can't Be Set Aside Over Insufficient Stamping Without Opportunity To Cure Defect: Rajasthan High Court

    Case Title:Sunil Kumar Bhakoo Versus Smt. Varisha

    Case Number: Civil Miscellaneous Appeal No.2157/2024

    The Rajasthan High Court bench of Justices Avneesh Jhingan and Bhuwan Goyal has held that when a court, in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) finds that the agreement to sell, on which the arbitration was initiated, is insufficiently stamped, it must provide the party an opportunity to cure the defect by impounding the instrument. The court cannot set aside the arbitral award on the ground that the agreement was invalid due to insufficient stamping. The court further observed that section 35 of the Stamp Act mandates that an instrument must be duly stamped to be admissible in evidence, registered, or authenticated. Proviso (a) allows admissibility upon payment of the due stamp duty and penalty.

    Limitation U/S 34(3) Of Arbitration Act Begins From Date Of Receipt Of Award When Delivery Is Undisputed: Rajasthan High Court

    Case Title: Javed Mohammad and Anr. Versus Kotak Mahindra Bank Ltd and Ors.

    Citation: 2025 LiveLaw (Raj) 173

    The Rajasthan High Court bench of Justices Avneesh Jhingan and Bhuwan Goyal has held that when the delivery of the arbitral award at the registered address is not disputed, the limitation period under Section 34(3) of the Arbitration Act cannot be suspended on the ground that the appellant became aware of the award at a later date. The limitation period must be computed from the date of receipt of the award, not from the date of knowledge.

    The court noted that when specifically queried during the hearing, learned counsel for the appellants was unable to point out any pleading asserting that the recipient of the award, one Haseena, was unrelated to the appellants or was not residing at the stated address. Therefore, it held that the appellants' contention that limitation begins from the date of knowledge cannot be accepted in the absence of any evidence disputing proper delivery of the award.

    Telangana High Court

    S.47 Of CPC Cannot Be Used As An Alternative To S.37 Of A&C Act For Unsettling Arbitration Award: Telangana HC

    The Telangana High Court has clarified that section 47 of the CPC, which permits objections to be raised in an execution petition before the Trial Court; cannot be used as an alternative to challenge an arbitration award, which is being executed before a Trial Court.

    The Division Bench of Justice Moushumi Bhattacharya and Justice B.R. Madhusudhan Rao, while passing the order made it clear that the Arbitration and Conciliation Act, 1996 is a Code in itself and lays down a mechanism to challenge an award under section 37, by way of an appeal. The Bench further clarified that merely because the Arbitration and Conciliation stipulates that an award should be enforced in accordance with CPC, it does not ipso facto mean that all provisions of CPC will be attracted to an award that is sought to be executed.

    Court Can Appoint New Arbitrator U/S 11(6) Of Arbitration Act If Designated Arbitral Institution No Longer Exists: Telangana HC

    Case Title: Danieli India Limited vs Mishra Dhatu Nigam Limited

    Case Number: ARBITRATION APPLICATION No.266 OF 2024

    The Telangana High Court bench of Justice K Lakshman has held that even if the designated arbitral institution named in the arbitration agreement no longer exists, the Court can still appoint a new arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) provided the intention to arbitrate is clearly evident from the arbitration clause.

    Unfair To Presume That Plea Of Limitation Can't Be Adjudicated By Arbitrator, Court U/S 11 Must Not Conduct Roving Inquiry: Telangana High Court

    Case Title: M/s GRN Constructions Private Limited vs The Singareni Collieries Company Limited

    Case Number: ARBITRATION APPLICATON No.276 OF 2024

    The Telangana High Court bench of Justice K. Lakshman has held that in a scenario where the referral court can discern the frivolity of the dispute from the bare minimum pleadings, it would be incorrect to presume that the arbitral tribunal, equipped to undertake a detailed examination of the pleadings and evidence, would be unable to reach the same conclusion. Therefore, it is better that the plea of limitation should be left to be decided by the Arbitrator.

    The court at the outset observed that it is relevant to note that following the amendment to the Arbitration Act effective from 23.10.2015, and in light of the principles laid down by the Supreme Court in Vidya Drolia v. Durga Trading Corporation, this Court, acting as the referral court under Section 11 of the Act, is bound to refer the matter to arbitration unless the dispute is manifestly non-arbitrable.

    Next Story