Arbitration

A non-signatory to an arbitration agreement cannot be permitted to remain present in arbitration proceedings, as it would breach confidentiality and exceed the Court's jurisdiction after appointing an arbitrator - Section 35 of the 1996 Act states that an award binds only parties to the arbitration and those claiming under them - 'Party' is defined by section 2(h) as a party to an arbitration agreement - Permitting a non-signatory to be present in proceedings where the award would not bind them has no legal basis and is 'unknown to law' - Such a direction breaches the confidentiality principle enshrined in Section 42A of the 1996 Act, which requires the arbitrator, arbitral institution and parties to maintain confidentiality. Kamal Gupta v. L.R. Builders Pvt. Ltd; 2025 LiveLaw (SC) 799 : 2025 INSC 975

An agreement between a Port authority and a private entity cannot override the provisions of the law, specifically the Major Port Trusts Act, 1963 - When a tariff revision dispute arises, and parties fail to agree, a competent authority must resolve the issue - An arbitrator's award is contrary to basic legal principles if it reads clauses of an agreement in isolation - Entire agreement must be read as a whole. [Para 26] Paradip Port Authority v. Paradeep Phosphates Ltd., 2025 LiveLaw (SC) 802 : 2025 INSC 971 : AIR 2025 SC 3835

Agreed interest rate can't be later challenged as exorbitant - Arbitrator cannot override contractual rate. BPL Ltd. v. Morgan Securities and Credits, 2025 LiveLaw (SC) 1169 : 2025 INSC 1380

Arbitral Award – Execution - Allegation of Fraud/Collusion (Fraud on Corporation) – Held, the maxim "fraud unravels everything" is acknowledged, an execution petition cannot be kept in abeyance based on mere allegations of fraud or collusion by the judgment-debtor's own officials, especially after the arbitral award has attained finality up to the Supreme Court. Entertaining such objections under Section 47, without a finding of fraud or even a prima facie case established, would be an abuse of process akin to a retrial, which is contrary to the object of Section 47. Courts must exercise great caution and circumspection before entertaining such allegations - Appeal dismissed. [Relied on Lazarus Estates Ltd. v. Beasley (1956) 1 All ER 341; Electrosteel Steel Limited v. ISPAT Carrier Private Limited 2025 LiveLaw SC 491; Para 34-35, 95-99] MMTC Ltd. v. Anglo American Metallurgical Coal Pvt. Ltd., 2025 LiveLaw (SC) 1060 : 2025 INSC 1279

Arbitral Award - Unexplained Delay – Validity – Held, an inordinate and unexplained delay in the pronouncement of an arbitral award (in the pre-Section 29A era) is not, per se, a ground for setting aside an award under Section 34. However, where the negative effect of such delay is explicit and adversely reflects on the findings in the award, it can be construed to be in conflict with the public policy of India or vitiated by patent illegality - Section 14(2) not mandatory pre-condition: An aggrieved party is not required to invoke the remedy under Section 14(2) of the Act (termination of the arbitrator's mandate) as a condition precedent to laying a challenge to a delayed and tainted award under Section 34, as both provisions operate independently. [Para 19, 20, 48, 63] Lancor Holdings v. Prem Kumar Menon, 2025 LiveLaw (SC) 1056 : 2025 INSC 1277

Arbitration Agreement – Unilateral Appointment Clause – Validity and Severability - Held that a clause in a public-private contract (Clause 25) which mandates unilateral appointment of an arbitrator by an ineligible authority (Managing Director) and further stipulates that "no arbitration shall be held" if such appointment fails, is void ab initio as it violates the principle of nemo judex in causa sua and is contrary to Article 14 of the Constitution - the invalidity of the appointment procedure does not destroy the core agreement to arbitrate - Applying the doctrine of severability, the offending portions, including the negative covenant, must be severed, and the substantive arbitration agreement survives, thereby enabling the court to appoint an independent arbitrator under Section 11(6). [Relied on the Constitution Bench judgment in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) 2025 4 SCC 641; Para 12] Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., 2025 LiveLaw (SC) 1153 : 2025 INSC 1365

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 : (2025) 9 SCC 76

Doctrine of Competence-Competence – Limits at Referral Stage – Held that the "hands-off" approach of referral courts does not apply where there is absolutely no prima facie evidence of an intent to effect a legal relationship between the parties- Allowing absolute strangers to force an arbitration reference by merely claiming to be a "veritable party" would lead to "disastrous consequences." [Relied on ASF Buildtech Private Limited vs. Shapoorji Pallonji and Company Private Limited (2025) 9 SCC 76; Paras 38-39] Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises Pvt. Ltd., 2025 LiveLaw (SC) 1184 : 2025 INSC 1401

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

Execution of an arbitral award cannot be stalled merely on the ground that an appeal under Section 37 of A&C Act is pending - Pendency of Section 37 appeal does not by itself, operate as a stay against execution of an arbitral award - Unless there is an express interim order staying enforcement the award-holder retains the right to proceed with execution - Execution Court should address objections to executability of the award as raised but cannot defer consideration of the execution application solely because of a pending appeal without any stay order. Chakardhari Sureka v. Prem Lata Sureka, 2025 LiveLaw (SC) 919

Foreign Arbitration Agreement - Reference to Arbitration - Under Section 45 of Arbitration and Conciliation Act, 1996, a judicial authority must refer parties to arbitration if there is an agreement in writing for arbitration, unless it prima facie finds that agreement is null, void, inoperative or incapable of being performed - Burden of proving the existence of an arbitration agreement lies with party seeking to rely on it and only prima facie proof is required before the referral court - The Court is not the appropriate forum to conduct a 'mini-trial' on existence or validity of agreement, as that is a matter for arbitral tribunal - The arbitration agreement in the contract was binding and that matter should be referred to arbitration if prima facie case for an agreement exists - Set aside order of High Court - Appeal allowed. [Paras 24- 28] Glencore International AG v. Shree Ganesh Metals, 2025 LiveLaw (SC) 839 : 2025 INSC 1036

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

Issue Estoppel - Held that the Petitioner is barred by issue estoppel from re-agitating the same issues of the operative agreement, the seat of arbitration, and the scope of the arbitration clauses, which were already decided by the High Court in its judgment when it dismissed the Petitioner's Anti-Arbitration Injunction Suit by allowing Respondent No. 1's application under Section 45 - The High Court's findings that the BSA constituted the principal agreement, the agreements were distinct, and the arbitration clause in the BSA remained binding are findings of jurisdictional fact that cannot be reopened - Held that arbitration petition is dismissed as it is fundamentally misconceived, legally untenable and foreclosed both in law and by issue estoppel. [Relied on Hope Plantations Ltd. v. Taluk Land Board Peermade & Anr. 1999 5 SCC 590; Paras 35, 38] Balaji Steel Trade v. Fludor Benin S.A., 2025 LiveLaw (SC) 1132 : 2025 INSC 1342

Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 - Arbitration and Conciliation Act, 1996 vs. 1983 Act – Held, disputes arising out of 'work contract' with MP Govt. instrumentality shall be referred to MP Arbitration Tribunal - Section 2(4) of the 1996 Act, preserves the operation of special statutory forums like the M.P. Arbitration Tribunal, reinforcing its exclusivity - There is no repugnancy between the 1996 Act and the 1983 Act - a reference to a special tribunal under a special enactment survives, irrespective of the existence of a mechanism under the 1996 Act. [Para 10] Umri Pooph Pratappur (Upp) Tollways Pvt. Ltd. v. M.P. Road Development Corporation, 2025 LiveLaw (SC) 752 : 2025 INSC 907 : AIR 2025 SC (Civil) 2114

Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 - Definition of 'Dispute' under 1983 Act - Section 2(1)(d)- defines dispute as a claim for ascertained or ascertainable money valued at Rs. 50,000 or more, relating to differences arising from the execution or non-execution of a works contract - Unascertained money claims fall within the definition of 'dispute' due to amendment post-Viva Highways Ltd. v. MPDRC 2017 SCC Online MP 1448, meaning the Tribunal has jurisdiction even if quantification occurs during adjudication. [Relied M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors (2018) 10 SCC 826; Paras 9, 11] Umri Pooph Pratappur (Upp) Tollways Pvt. Ltd. v. M.P. Road Development Corporation, 2025 LiveLaw (SC) 752 : 2025 INSC 907 : AIR 2025 SC (Civil) 2114

Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 - Rule 53(3)(b) - Withdrawal of Reference and bar on re-litigation - A party that withdraws a reference without permission contemplated under Rule 53(2) is barred from instituting a fresh reference on the same subject matter - Such a withdrawal amounts to an abandonment of claims, barring re-litigation before any forum, including private arbitration, irrespective of whether arbitration is under the 1983 Act or the 1996 Act. [Para 17] Umri Pooph Pratappur (Upp) Tollways Pvt. Ltd. v. M.P. Road Development Corporation, 2025 LiveLaw (SC) 752 : 2025 INSC 907 : AIR 2025 SC (Civil) 2114

Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 - Section 2(1)(i) - 'Works Contract' - the term “works contract” as defined expressly includes concession agreements executed by the State or its instrumentalities, regardless of whether direct financial support from the State is involved - A concession agreement for the development of a State Highway / District Road falls squarely within this definition. [Para 10] Umri Pooph Pratappur (Upp) Tollways Pvt. Ltd. v. M.P. Road Development Corporation, 2025 LiveLaw (SC) 752 : 2025 INSC 907 : AIR 2025 SC (Civil) 2114

Mother Agreement Prevails over Ancillary Contracts (Novation) - Held that the BSA, being the principal or "mother agreement", defines the long-term commercial relationship, and its arbitration clause (Benin seat) prevails over the different arbitration clauses contained in subsequent, limited-purpose Sales Contracts (with Respondent No. 2) and High Seas Sale Contracts (HSSAs with Respondent No. 3) - There was no clear and unequivocal intention to substitute the BSA with the subsequent contracts; thus, the BSA was not novated - Disputes rooted in obligations under the BSA must be resolved through the arbitration agreed therein (Benin). [Relied on Balasore Alloys Ltd. v. Medima LLC 2020 9 SCC 136; Paras 27-30] Balaji Steel Trade v. Fludor Benin S.A., 2025 LiveLaw (SC) 1132 : 2025 INSC 1342

Privity of Contract and Assignment – Consent Requirement – Held that Rights under a contract are assignable unless the contract is personal or prohibited by agreement, but obligations cannot be assigned without the promisee's consent- Where the tender conditions expressly prohibited subletting or assignment without prior written consent, a unilateral "Settlement-cum-Assignment Agreement" between a contractor and a sub-vendor cannot bind the principal employer to an arbitration agreement. [Relied on Khardah Company Limited vs. Raymon & Co. (1963) 3 SCR 183; Paras 24-30] Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises Pvt. Ltd., 2025 LiveLaw (SC) 1184 : 2025 INSC 1401

Procedural Defects – Jurisdictional Error – Modification of Contract Terms by Arbitral Tribunal – Mandate under Section 28(3) of the Act - The Arbitral Tribunal's modification of contract terms without material evidence, and reliance on conduct/e-mails not amounting to unequivocal waiver or valid estoppel, was held to be a jurisdictional error - Set aside order for exceeding arbitral jurisdiction - Appeal dismissed. [Paras 88–92] Sepco Electric Power Construction Corporation v. GMR Kamalanga Energy Ltd., 2025 LiveLaw (SC) 963 : 2025 INSC 1171

Requirement of signature on arbitration agreement - An arbitration agreement can be inferred from the exchange of letters or other forms of communication that provide a record of agreement - Mere fact that a contract containing an arbitration clause was not signed by one party does not invalidate the agreement, particularly when the parties conduct clearly shows their acceptance of the contract's terms - When parties act in furtherance of a contract by fulfilling their obligations, such as supplying and accepting goods, furnishing letters of credit and referencing the contract in subsequent correspondence, this conduct demonstrates an unequivocal acceptance of the contract, including its arbitration clause. [Paras 14-15] Glencore International AG v. Shree Ganesh Metals, 2025 LiveLaw (SC) 839 : 2025 INSC 1036

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 : AIR 2025 SC (Civil) 612

Unworkable Award - Patent Illegality - Public Policy – Held, the very basis and public policy underlying the process of arbitration is the achievement of a speedy and final resolution of disputes. An arbitral award that is unworkable in that it fails to finally settle the disputes but instead irrevocably alters the parties' pre-existing balance and compels them to initiate a fresh round of arbitration/litigation defeats this public policy - Such an unworkable arbitral award would not only be in conflict with the public policy of India under Section 34(2)(b)(ii) but would also be patently illegal on the face of it under Section 34(2A). [Relied on Shilpa Sailesh v. Varun Sreenivasan 2023 14 SCC 231; Para 20, 48, 55, 58, 59, 63] Lancor Holdings v. Prem Kumar Menon, 2025 LiveLaw (SC) 1056 : 2025 INSC 1277

Arbitration and Conciliation Act, 1996

Section 2(1)(f), 2(2), 11(6) - Maintainability of Section 11 Petition for Foreign-Seated Arbitration - Conflict of Arbitration Clauses - Juridical Seat - Held that an International Commercial Arbitration and Jurisdiction under Section 11(6) - The dispute between the Petitioner (an Indian partnership firm) and Respondent No. 1 (a company incorporated in Benin) is an international commercial arbitration as defined under Section 2(1)(f) of the Act - Since the Buyer-Seller Agreement (BSA) provides that arbitration shall "take place in Benin" (Article 11) and shall be "governed and interpreted in accordance with the laws of Benin" (Article 5 of Addendum) , Benin is the juridical seat of arbitration - Consequently, Part I of the 1996 Act, which includes Section 11, is excluded by operation of Section 2(2) for arbitrations seated outside India - Held that the Supreme Court lacks jurisdiction to entertain a petition under Section 11(6) for the appointment of an arbitrator - Held that Part I of the 1996 Act has no application to arbitrations seated outside India. [Relied on Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. 2012 9 SCC 552; Paras 23-26, 30] Balaji Steel Trade v. Fludor Benin S.A., 2025 LiveLaw (SC) 1132 : 2025 INSC 1342

Section 2(1)(h) - Limitation for filing an application to set aside an arbitral award - When does the limitation period commence for a government department and whether the delivery of a signed xerox copy of the award to an authorized representative of the State constituted valid delivery under Section 31(5) of the Act, which would start the limitation period – Held, definition of 'party' under Section 2(1)(h) of the Act, which refers to a party to an arbitration agreement and for large government organizations, the award must be received by a person who has the authority and knowledge to understand the award and make decision to challenge it - An authorized representative, such as Assistant Engineer in this case, who did not have the decision-making authority to challenge the award, is not considered a 'party' for the purpose of receiving the award under Section 31(5) - Hence, the limitation period for filing an application to set aside the award under Section 34(3) does not begin to run from the date of such delivery - Limitation period commences only when the award is received by competent authority or person who is a 'party' and can decide whether to challenge the award - Appeal dismissed. [Paras 12 - 25] Motilal Agarwala v. State of West Bengal, 2025 LiveLaw (SC) 867 : 2025 INSC 1062

Section 2(4) - Writ Jurisdiction – Maintainability - Works contract - Exclusive Jurisdiction - Withdrawal of Reference – Limitation - High Court refused to set aside the arbitration proceedings initiated by the Appellant and reaffirmed the exclusive jurisdiction of M.P. Arbitration Tribunal established under 1982 Act to adjudicate disputes arising from works contract involving State or its instrumentalities – Held, a writ petition under Article 226 of the Constitution of India is maintainable against a private party if the dispute involves a public law element, rather than being confined to private contractual obligations, and the private party performs a public duty or is subject to a statutory obligation in relation to a state entity - In cases where a state owned entity-respondent files a writ petition to challenge the invocation of arbitration under 1996 Act due to existence of a statutory remedy under the 1983 Act, the issue pertains to the availability and exclusivity of a statutory dispute resolution mechanism, this involving a public law element, making the writ petition maintainable - Upheld order of High Court and directed appellant to file an application to recall withdrawal order and seek restoration of reference petition. [Para 8] Umri Pooph Pratappur (Upp) Tollways Pvt. Ltd. v. M.P. Road Development Corporation, 2025 LiveLaw (SC) 752 : 2025 INSC 907 : AIR 2025 SC (Civil) 2114

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 : 2025 (5) ADR 320

Section 7 & 11(6) – Validity of Arbitration Agreement – Interpretation of Dispute Resolution Clause - The Supreme Court examined whether a three-tier dispute resolution clause, which mandated negotiation, followed by "arbitration through senior management comprising respective Chairmen of the two parties (Arbitrators)" – Held, this is not a clause does not constitute a valid arbitration agreement - An arbitration agreement must contemplate an intention to refer disputes to a private tribunal for adjudication and a willingness to be bound by its decision - The words used must disclose a determination and obligation to go to arbitration, not merely contemplate the possibility - The decision of the private tribunal must be final and binding on the parties - Noted that the penultimate sentence of Clause 8.28, which stipulates that the complaining party shall seek remedies through the courts of law if the dispute is not resolved within fifteen (15) days after the proposed "arbitration," clearly indicates that the process was an attempt at amicable resolution inter se rather than a definitive submission to arbitration - Where an agreement provides that the decision will not be final and binding, or that an unsatisfied party may file a civil suit, it cannot be termed an arbitration agreement - The mere use of the word "arbitration" multiple times is not clinching or decisive - The A&C Act acknowledges the existence of an arbitration agreement based on its substance rather than its form, and an express intention of the dispute being resolved through arbitration is necessary to meet the threshold of Section 7 - The clause did not constitute an arbitration agreement in the first place, subsequent correspondence where the respondent did not deny its existence cannot displace the original lack of intention to arbitrate, especially as the correspondence was not unequivocally clear about referring disputes to arbitration - Appeal dismissed. [Relied on Jagdish Chander v. Ramesh Chander 2007 5 SCC 719; Mahanadi Coalfields Ltd. v. IVRCL AMR Joint Venture, (2022) 20 SCC 636; K.K. Modi v. K.N. Modi, (1998) 3 SCC 573; Paras 15-27] Alchemist Hospitals Ltd. v. ICT Health Technology Services India Pvt. Ltd., 2025 LiveLaw (SC) 1070 : 2025 INSC 1289

Section 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 : AIR 2025 SC (Civil) 1802 : (2025) 8 SCC 299

Section 9 - Code of Civil Procedure, 1908 (CPC) - Section 92 - Order VII Rule 11 - Rejection of Plaint – Held, respondents having agreed to resolve the dispute through arbitration and subsequently obtaining consent decree in their favor based on the arbitral award, could not later the award as a nullity due to non-arbitrability under Section 92 of CPC - Respondents conduct of “approbation and reprobation” to be impermissible and barred by the doctrine of estoppel by conduct and election - Appellants were granted liberty to revive their withdrawn execution proceedings to enforce the consent decree - The respondents were estopped by their conduct from raising the issue of non-arbitrability after having benefitted from the arbitration and the resulting consent decree. [Paras 14- 20] Sanjit Singh Salwan v. Sardar Inderjit Singh Salwan, 2025 LiveLaw (SC) 810 : 2025 INSC 988 : AIR 2025 SC (Civil) 2337

Section 9 & 37(1)(b) — Constitution of India — Article 227 — Bank Guarantees — Interim Relief - In exceptional circumstances, a High Court may invoke its supervisory jurisdiction under Article 227 of the Constitution to grant interim relief in arbitration proceedings, notwithstanding the Arbitration Act's emphasis on minimal judicial interference and the availability of remedies under Section 37(1)(b), where denial of such relief would occasion irreparable harm, such as the irretrievable injustice from encashment of a bank guarantee amid ongoing arbitration. The appellant, a construction contractor, furnished an unconditional bank guarantee of ₹3.73 crore to secure an advance payment under a residential construction contract with the respondent real estate company. Citing delays and poor performance, the appellant terminated the contract and invoked the guarantee. The respondent sought interim stay of encashment under Section 9 of the Arbitration Act, which the Commercial Court denied. Invoking Article 227, the High Court stayed encashment pending arbitration, subject to extension of the guarantee's validity. Dismissing the appellant's appeal against the High Court's interference, the Supreme Court upheld the order, emphasizing the guarantee's ongoing validity, the arbitration's pendency, and the need to preserve the status quo to avert irreversible prejudice to the respondent. The Court directed expeditious disposal of the Section 9 petition within eight weeks, with the guarantee to subsist until final adjudication. Judicial restraint in arbitration is paramount, but Article 227 empowers exceptional intervention to prevent fraud of an egregious nature or irretrievable injustice; here, the High Court's interim measure balanced interests without prejudging merits, aligning with the Act's pro-arbitration ethos. Jindal Steel and Power Ltd. v. Bansal Infra Projects, 2025 LiveLaw (SC) 544 : 2025 INSC 640

Section 11 – Appeal against dismissal of a request case under Section 11 by the High Court - Constitution of India; Articles 14 & 298 – State as Model Litigant - Held that lethargy and indifference by a public authority, where contractual obligations demand prompt responsiveness, falls short of the standards of fairness required of a State entity under Articles 14 and 298 of the Constitution – The State must act as a model litigant – fair, responsive, and transparent in its dealings – Silence or procedural evasion by senior officers is inconsistent with the constitutional trust reposed in public authorities - Public Officers are custodians of public faith, not mere administrators – A stern warning was issued to the then Managing Director of the respondent company for such neglect, cautioning that any repetition may invite adverse remarks or even personal accountability. [Relied on State of Bihar and others v. Kameshwar Prasad Singh and another (2000) 9 SCC 94; Para 11, 15-19] Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., 2025 LiveLaw (SC) 1153 : 2025 INSC 1365

Section 11 - Existence of Arbitration agreement - Interpretation of “May be sought through arbitration” – Held, a clause stating 'redressal of the dispute may be sought through Arbitration and Conciliation Act”- does not constitute binding arbitration agreement - The use of “may be sought” implies an enabling clause that requires a further agreement between parties to resolve disputes through arbitration, rather than indicating a present and binding commitment to arbitrate. High Court had not exceeded the limits set by Section 11(6A) of the Act and had confined its inquiry to the existence of an arbitration agreement - Upheld order of High Court - Appeal dismissed. [Paras 23-26, 29-31] BGM and M-RPL-JMCT (JV) v. Eastern Coalfields, 2025 LiveLaw (SC) 731 : 2025 INSC 874 : AIR 2025 SC (Civil) 2145

Section 11 - Scope of - Arbitrability of disputes - Serious allegations of fraud - Arbitrability of disputes arising from agreements for custom milling of paddy, where allegations of massive fraud and criminal proceedings were initiated against rice millers – Held, mere pendency of criminal cases alleging simple fraud, no bar to arbitration - Since there existed a valid arbitration agreement, it would be impermissible at the referral stage to dive deeper into the dispute, instead referred the same to the arbitration for its adjudication. [Paras 21, 24-28] Bihar State Food and Civil Supply Corporation v. Sanjay Kumar, 2025 LiveLaw (SC) 778 : 2025 INSC 933 : AIR 2025 SC 3775

Section 11 - Scope of Referral Court's power - prima facie existence of arbitration agreement – Held, the reference court is not to conduct a mini trial or a laborious inquiry into existence or validity of the agreement - Rather Courts shall inspect or scrutinize documents to satisfy itself that an arbitration agreement as contemplated by Section 7 of the Act, prima facie exists - Burden of proving that prima facie arbitration agreement exists lies on the party seeking to rely on it. [Para 14-18] BGM and M-RPL-JMCT (JV) v. Eastern Coalfields, 2025 LiveLaw (SC) 731 : 2025 INSC 874 : AIR 2025 SC (Civil) 2145

Section 11 & 21 - Appointment of arbitrator - Exclusive Jurisdiction Clause - Seat of Arbitration – Held, when an agreement contains an arbitration clause and also clause specifying exclusive jurisdiction of a particular High Court, this exclusive jurisdiction clause, even without explicitly using the terms 'seat' or 'venue' must be understood in the context of arbitration for dispute resolution, thereby establishing the specified location as the seat of arbitration – Then an application for the appointment of an arbitrator under Section 11 of the Act must be filed before High Court having jurisdiction over the designated seat of arbitration. Set aside High Court's order - Appeal allowed. [Paras 7-10] Activitas Management Advisor v. Mind Plus Healthcare, 2025 LiveLaw (SC) 795

Section 11 (Appointment of Arbitrator) - Review Jurisdiction – Extent of Judicial Intervention (Section 5) - Held that once an arbitrator is appointed, the arbitral process must proceed unhindered - There is no statutory provision for review or appeal from an order under Section 11, which reflects a conscious legislative choice - held, while setting aside the Patna High Court's order allowing the review petition and recalling its earlier appointment of an arbitrator, despite the party having actively participated in the proceedings and seeking review nearly three years later - Held that the High Court did not have the jurisdiction to reopen or review its earlier order passed under Section 11(6) of the A&C Act - Once the appointment was made, the court became functus officio and could not sit in judgment over the very issue it had already settled - The review order cuts against the grain of the Act, undermines the principle of minimal judicial interference, and effectively converts the review into an appeal in disguise - Noted that High Courts, as courts of record, do possess a limited power of review, such power is extremely circumscribed in matters governed by the Arbitration Act - It may be exercised only to correct an error apparent on the face of the record or to address a material fact that was overlooked. It cannot be used to revisit findings of law or reappreciate issues already decided - Appeal allowed. [Para 11, 15-18] Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., 2025 LiveLaw (SC) 1153 : 2025 INSC 1365

Section 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 : AIR 2025 SC (Civil) 1754 : (2025) 9 SCC 686

Section 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 : AIR 2025 SC (Civil) 1754 : (2025) 9 SCC 686

Section 11(4) and Section 11(6-A) – Joinder of Non-Signatory– "Veritable Party" Doctrine – Scope of Referral Court's Jurisdiction– Held that While a referral court should generally leave complex questions of joinder to the Arbitral Tribunal under Section 16, it is not a "monotonous automation."- The court must be prima facie satisfied that the non-signatory is a "veritable party" (genuinely intended to be bound) before making a reference- Mere commercial relationship or marking of emails to the principal employer does not establish a legal relationship or intent to bind a third-party sub-vendor to the main arbitration agreement. [Relied on Cox and Kings Limited vs. Sap India Private Limited and Another (2024) 4 SCC 1; Paras 24-35] Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises Pvt. Ltd., 2025 LiveLaw (SC) 1184 : 2025 INSC 1401

Section 11(6) – Held, after appointment of an arbitrator under Section 11(6) and disposal of the proceedings, Court becomes functus officio and cannot issue further ancillary directions - Once arbitrator was appointed, Court lost jurisdiction to entertain new applications, such as the prayer for permission to intervene or remain present - 1996 Act is a self-contained Code and Section 5 restricts judicial intervention to only what is expressly provided -Invoking section 151 of the CPC was not permissible in this context - Applications set aside. [Paras 14- 22] Kamal Gupta v. L.R. Builders Pvt. Ltd; 2025 LiveLaw (SC) 799 : 2025 INSC 975

Section 11(6), 12(5) - Limitation Act, 1963 - Section 19 - Article 137 – Limitation - Arbitration Clause - Disqualification of Named Arbitrator - that the arbitration clause in the General Conditions of the Contract (GCC) named the Managing Director of Bharat Oman Refineries Limited or an officer nominated by him as the arbitrator - Subsequent amendments in the 1996 Act, specifically Section 12(5) read with the Seventh Schedule (as amended by Act 3 of 2016 w.e.f. 23.10.2015), rendered the Managing Director and his nominee ineligible to act as an Arbitrator due to the legislative intent to secure neutrality of arbitrators – Held, merely because the procedure for appointment in the clause became inoperative due to statutory changes, the core agreement to refer the dispute to arbitration is not rendered nugatory - The arbitration agreement must be interpreted purposively, and the Court is vested with the power to appoint an independent arbitrator under Section 11(6) - The amendment in the statute has been enacted with the legislative intent to enforce neutrality of the arbitrator and bring impartiality - It will not be justified to literally interpret the clause in the contract - Noted that the right to apply under Section 11 (6) accrues from the date when the final bill became due - Matter was referred to the Delhi International Arbitration Centre, which was directed to appoint an arbitrator - Set aside order of High Court. [Relied on Perkins Eastman Architects DPC and Another v. HSCC (India) Limited (2020) 20 SCC 760; TRF Limited v. Energo Engineering Projects Limited (2017) 8 SCC 377; Geo Miller & Co. Pvt. Ltd. v. Rajasthan Vidyut Utpadan Nigam Ltd (2020) 14 SCC 643; Paras 16-24] Offshore Infrastructures v. Bharat Petroleum, 2025 LiveLaw (SC) 982 : 2025 INSC 1196

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 : AIR 2025 SC (Civil) 557

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 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 : 2025 (5) ABR 319

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 : (2025) 5 SCC 347

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 : AIR 2025 SC (Civil) 376

Section 29A(4) & 29A(6) - Termination of Mandate and Substitution of Arbitrator – Held, upon the expiry of the initial or extended period for making an arbitral award, the arbitrator cannot proceed with the proceedings as the mandate terminates by operation of law, making the arbitrator functus officio - While this termination is not "absolute" and is subject to court-ordered extensions under Section 29A(4), the court is empowered and obligated under Section 29A(6) to substitute the arbitrator to effectuate the object of the Act, which is the expeditious resolution of disputes - The power of substitution under Section 29A(6) is a separate remedy from those available under Sections 14 and 15 - In the present case, where the mandate expired on 28.02.2023 and the arbitrator failed to pass an award, the High Court erred in merely granting an extension without considering that the mandate had ceased to exist; thus, substitution was warranted - Appeal allowed. [Relied on Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Ltd. - 2024 SCC OnLine SC 2494; Paras 9-13] Mohan Lal Fatehpuria v. Bharat Textiles, 2025 LiveLaw (SC) 1190 : 2025 INSC 1409

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 31(7) - Interest on arbitral award – Held, Section 31(7)(a) permits the arbitral tribunal to include interest in the award for the pre-award period at a reasonable rate, which is subject to agreement by the parties - Section 31(7)(b) mandates interest at 18% per annum on the award amount from the date of the award to payment unless otherwise directed by the award - If the arbitral award specifies a composite rate of interest, the award holder cannot claim additional 18% compound interest - Compound interest cannot be granted unless expressly awarded - Arbitral award here explicitly granted simple interest at 21% per annum till repayment as per the parties MOU, precluding additional or compound interest - The executing court's acceptance of full payment including interest was in accordance with the award - The High Court's remand for fresh consideration of interest was not justified - Set aside High Court's order - Appeal allowed. [Paras 17, 19-20, 24, 27-30] HLV Limited v. PBSAMP Projects Pvt. Ltd., 2025 LiveLaw (SC) 944 : 2025 INSC 1148

Section 31(7)(b) - Award of interest - Pendente Lite interest - Whether a clause in the agreement barring interest on 'delayed payment/disputed claim' also bars the arbitral Tribunal from awarding pendente lite interest – Held, clause restricting interest on delayed payments by itself won't bar pendente lite interest - An arbitral tribunal can only be stripped of its power to award pendente lite interest if the agreement between the parties is explicitly or by necessary implication worded to bar it - A clause that merely prohibits interest on 'delayed payment' by itself is not enough to infer an express bar on the tribunal's power to award pendente lite interest - The power of an arbitral tribunal to award interest for the period between the date of cause of action arose and the date the award is made is subject to the agreement between the parties and is statutorily governed - The power to award post-award interest under section 31(7)(b) is not subject to the agreement between the parties and is statutorily governed - Arbitral tribunal in this case awarded pendente lite interest from the date the claim was affirmed, not from date of cause of action arose - There is no error in the award of pendente lite interest or post-award interest - Appeal dismissed. [Paras 16- 24] Oil and Natural Gas Corp. v. G & T Beckfield Drilling Services Pvt. Ltd., 2025 LiveLaw (SC) 868 : 2025 INSC 1066

Section 31(7)(b) - Post-Award Interest is Mandatory – Held, the grant of post-award interest under Section 31(7)(b) (pre-amended) is mandatory, and the only discretion vested in the Arbitral Tribunal is to decide the rate of interest to be awarded - Where the arbitrator does not fix any rate of interest, the statutory rate of 18% per annum shall apply - Clause (b) is in contrast with clause (a) and is not subject to party autonomy; it does not give the parties the right to "contract out" interest for the post-award period - The phrase "unless the award otherwise directs" relates to the rate of interest and not the entitlement of interest. [Relied on Morgan Securities & Credits Pvt Ltd. v. Videocon Industries Ltd. (2022 INSC 898; R.P. Garg v. The General Manager, Telecom Department & Ors. (2024 INSC 743; Paras 37, 38, 41-44] Sri Lakshmi Hotel Pvt. Ltd. v. Sriram City Union Finance Ltd., 2025 LiveLaw (SC) 1118 : 2025 INSC 1327

Section 32 - Supreme Court clarified the following things - i. Section 32 of the Act, 1996 is exhaustive and covers all cases of termination of arbitral proceedings under the Act, 1996. The power of the arbitral tribunal to pass an order to terminate the proceedings under the scheme of the Act, 1996 lies only in Section 32(2); ii. Sections 25, 30 and 38 of the Act, 1996 respectively, only denote the circumstances in which the tribunal would be empowered to take recourse to Section 32(2) and thereby, terminate the proceedings; iii. The use of the expression “the mandate of the Arbitral Tribunal shall terminate” in Section 32 of the Act, 1996 and its omission in Section(s) 25, 30 and 38 of the said Act, cannot be construed to mean that the nature of termination under Section 32(2) is distinct from a termination under the other aforesaid provisions of the Act, 1996; iv. The expression “mandate of the Arbitral Tribunal” is merely descriptive of the function entrusted to the tribunal, namely, the authority and duty to adjudicate the disputes before it. It refers to the obligation of the arbitral tribunal to administer the arbitration by conducting the proceedings in order to adjudicate upon the disputes referred to it; v. Irrespective of whether the proceedings are terminated on account of the passing of a final award, or by the withdrawal of claims, or on account of default by the claimant, or the intervention of any impossibility in the continuation of the proceedings, the legal effect remains the same, inasmuch as the arbitral tribunal thereafter stands divested of its authority to act in the reference; vi. The common thread that runs across Sections 25, 30 32 and 38 of the Act, 1996 respectively is that although the arbitral proceedings may get terminated for varied reasons, yet the consequence of such termination remains the same i.e., the arbitral reference stands concluded and the authority of the tribunal stands extinguished; vii. There is a clear distinction between a procedural review and a review on merits- The arbitral tribunal possesses the inherent procedural power to recall an order terminating the proceedings as such power is merely to correct an error apparent on the face of the record or to address a material fact that was overlooked- It does not tantamount to revisiting the findings of law or reappreciating the substantive issues already decided. [Paras 96- 105, 134-135, 415, 416] Harshbir Singh Pannu v. Jaswinder Singh, 2025 LiveLaw (SC) 1183 : 2025 INSC 1400

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 : (2025) 7 SCC 757

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

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 : (2025) 7 SCC 1

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 34 & 36 - Code of Civil Procedure, 1908 (CPC) - Section 47 - Arbitral Award – Execution - Objection under Section 47 CPC - Plea of Nullity – Scope – Held, the plea of nullity against an Arbitral Award can be raised in a proceeding under Section 47 of the CPC during execution, as the Award is enforced under Section 36 of the A&C Act as if it were a decree of the Civil Court - Such a challenge lies within a very narrow compass, limited exclusively to the ground of jurisdictional infirmity or voidness - An Executing Court cannot go behind the decree - Objections regarding errors of fact and law are outside the scope of Section 47 - Objections to arbitral award execution maintainable only if decree is void or without jurisdiction. [Relied on Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman, (1970) 1 SCC 670; Paras 16-23] MMTC Ltd. v. Anglo American Metallurgical Coal Pvt. Ltd., 2025 LiveLaw (SC) 1060 : 2025 INSC 1279

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 : AIR 2025 SC (Civil) 612

Section 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 : (2025) 7 SCC 1

Section 34 and 37 — Excepted Clauses — Prohibited Claims — Party Autonomy — Reference to Larger Bench - Arbitral Tribunal bound by contractual bars — Whether a prohibitory clause applies only to the department or also to the Arbitrator — Reconsideration of Bharat Drilling & Foundation Treatment Pvt. Ltd. v. State of Jharkhand - Supreme Court has referred the decision in Bharat Drilling & Foundation Treatment Pvt. Ltd. v. State of Jharkhand to a larger bench for reconsideration - Observed that Bharat Drilling is not an authority for the proposition that an "excepted clause" or a prohibited claim in a contract applies only to the employer and not to the Arbitral Tribunal - Held that party autonomy is the "brooding and guiding spirit" and "backbone" of arbitration - An arbitrator is bound by the procedures and limitations agreed upon between the parties - If a contract specifically declares that "no claim shall be entertained" for certain losses, the Arbitral Tribunal cannot allow such claims in violation of the contract - Jurisdiction relating to the grant of interest is sourced from Section 31(7) of the Arbitration and Conciliation Act, 1996, and stands on a different footing from contractual clauses prohibiting specific substantive claims - Under the 1996 Act, Section 31(7)(a) restricts the power to grant pre-reference and pendente lite interest the moment the agreement bars payment of interest - Noted that the approach in Bharat Drilling is not in tune with recent principles emphasizing party autonomy and the binding nature of contract clauses. [Relied on Cox and Kings Ltd. v. SAP India Private Ltd., (2024) 4 SCC 1; In Re: Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, 2023 SCC OnLine SC 1666; Paras 7-10] State of Jharkhand v. Indian Builders Jamshedpur, 2025 LiveLaw (SC) 1173 : 2025 INSC 1388

Section 34 and 37 - Constitution of India, Article 142 - 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 : (2025) 7 SCC 1

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 : (2025) 4 SCC 234

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 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 : (2025) 7 SCC 1

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

Section 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 : (2025) 7 SCC 1

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 : (2025) 6 SCC 757

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 : 2025 (5) ADR 201 : (2025) 6 SCC 757

Section 34 Proviso to Section 34(2)(a)(iv)- Held that the authority of a Court under Section 34 to set aside an arbitral award in part, by severing the invalid portion from the valid portion, is inherent in the Court's jurisdiction - The doctrine of omne majus continet in se minus (the greater power includes the lesser) squarely applies, holding that the power to set aside an award necessarily encompasses the power to set it aside in part - The proviso to Section 34(2)(a)(iv) is clarificatory in nature, confirming this pre-existing inherent power - Petition dismissed. [Para 128-130] Urban Infrastructure Real Estate Fund v. Neelkanth Realty Pvt. Ltd., 2025 LiveLaw (SC) 1028 : 2025 INSC 1255

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 : AIR 2025 SC (Civil) 1695

Section 34(2)(b)(ii) read with Explanation 1 and Section 34(2A) Proviso - Challenge to Arbitral Award - High Rate of Interest - Public Policy – Held, the imposition of an exorbitant interest rate in a purely commercial transaction, considering contemporary commercial practices, cannot be said to be against the fundamental policy of Indian Law or against the basic notions of morality or justice under the restricted meaning given to "public policy of India" post the 2015 amendments - A difference or controversy as to the rate of interest falls outside the scope of a challenge on the ground of conflict with the public policy of India, unless it is evident that the rate awarded is so perverse and so unreasonable as to shock the conscience of the Court - The proviso to Section 34(2A) explicitly prohibits re-appreciation of evidence - Where the learned Arbitrator's findings on the genuineness of the loan agreement and the interest rate (here, 24% p.a.) have been concurrently upheld by the courts below, a contrary view would amount to re-appreciation of evidence, which is barred - Appeal dismissed. [Relied on OPG Power Generation Private Limited v. Enexio Power Cooling Solutions India Private Limited (2024 SCC OnLine SC 2600; Paras 45-53] Sri Lakshmi Hotel Pvt. Ltd. v. Sriram City Union Finance Ltd., 2025 LiveLaw (SC) 1118 : 2025 INSC 1327

Section 34(2)(b)(ii), 34(2A), 28(3) - Arbitral Award - Setting Aside - Patent Illegality - Rewriting of Contract – Held, an Arbitral Tribunal, being a creature of contract, cannot unilaterally alter or rewrite the terms of the contract between the parties - An Arbitral Award that grants claims by rewriting the commercial contract, substituting the express terms of the agreement and binding policy directives of a statutory authority, is vitiated by patent illegality appearing on the face of the Award and is in conflict with the fundamental policy of Indian Law - Noted that Arbitrator's action of substituting the contractually agreed 'combo meal' tariff with the 'regular meal' tariff for the second meal of the day, and granting reimbursement for an item ('welcome drink') contrary to the policy directives binding on the caterers, amounts to creating a new contract for the parties and is violative of Section 28(3) of the Act, which mandates the Tribunal to take into account the terms of the contract - Appeal allowed. [Relied Ssangyong Engineering and Construction Company Limited v. National Highway Authority of India, (2019) 15 SCC 131; Industrial Promotion and Investment Corporation of Orissa Limited v. Turbo Furguson Steel Private Limited & Ors. 2012 2 SCC 261; Paras 64-72] Indian Railways Catering and Tourism v. Brandavan Food Products, 2025 LiveLaw (SC) 1076 : 2025 INSC 1294

Section 34, 37 - Indian Contract Act, 1872; Section 39 - Development Agreement - Termination and Forfeiture - Delay in Performance - Held, Chandigarh Administration's 16.5-month delay in providing encumbrance-free land for Multimedia-cum-Film City project was unreasonable, causing commercial consequences due to time-sensitive nature of the project. Supreme Court upholds arbitral award in favor of appellant-Company, directing refund of Rs.47.75 crores forfeited bid amount with 8% p.a. interest and Rs.46,20,715 for expenses incurred. High Court's reversal of award set aside; compensation of Rs.47.75 lakhs disallowed. (Para 29 & 30) Parsvnath Film City Ltd. v. Chandigarh Administration, 2025 LiveLaw (SC) 422 : 2025 INSC 464

Section 34, 37, 19(1)- Limitation Act, 1963 – Section 3- Code Of Civil Procedure, 1908 – Order Vii Rule 11(D)- Held that A preliminary issue of limitation, even if decided by an Arbitral Tribunal on the basis of demurrer (where the opponent accepts the claimant's averments as true for argument's sake), cannot be final and cannot foreclose the issue for all future proceedings - The issue of limitation is a mixed question of fact and law which goes to the root of the claim - A decision on demurrer checks maintainability on the face of the pleadings, similar to a motion under Order VII Rule 11(d) CPC - A preliminary finding on maintainability on the point of limitation, decided solely on demurrer, does not preclude a final determination on the merits of the issue based on evidence and other materials that may be adduced later by the parties - The Arbitral Tribunal is under a positive duty, stemming from Section 3 of the Limitation Act, 1963, to adjudicate the question of limitation and dismiss the claim if found to be barred, even if limitation is not set up as a defence or if a preliminary issue on demurrer was decided against the bar of limitation - The procedure adopted by an Arbitral Tribunal that treats a decision on demurrer as final and foreclosed, particularly when the arbitrator noted that adducing evidence might lead to a contrary finding, is contrary to the fundamental policy of Indian law and offends the most basic notions of justice. [Relied on Ramesh B. Desai and Others v. Bipin Vadilal Mehta and Others (2006) 5 SCC 638; Angelo Brothers Limited v. Bennett, Coleman and Co. Ltd. & Anr., 2017 SCC OnLine Cal 7682; Paras 98, 100, 130, 134-137] Urban Infrastructure Real Estate Fund v. Neelkanth Realty Pvt. Ltd., 2025 LiveLaw (SC) 1028 : 2025 INSC 1255

Section 36(3) - Stay of Arbitral Award for Payment of Money - Conditions for Unconditional Stay- Held that the mere filing of an application to set aside an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, does not render the award unenforceable; a separate application for stay must be filed- Held that Court has discretionary power under Section 36(3) to grant a stay "subject to such conditions as it may deem fit"- For an arbitral award for payment of money, the Court must have "due regard" to the provisions for grant of stay of a money decree under the Code of Civil Procedure, 1908 (CPC)- Unconditional stay of a money award is generally governed by the Second Proviso to Section 36(3), which mandates an unconditional stay if a prima facie case is made out that the arbitration agreement, contract, or the making of the award was induced or effected by fraud or corruption- Supreme Court held that for granting the benefit of unconditional stay of execution of a money-decree (or an arbitral award in the form of a money-decree), an "exceptional case" must be established, meaning the award must be shown to be more than prima facie- i. Egregiously perverse; ii. Riddled with patent illegalities; iii. Facially untenable; iv. Or such other exceptional causes similar in nature- The Supreme Court set aside the High Court's order granting an unconditional stay because the award-debtors did not claim the award was induced by fraud or corruption, nor did their case fall into any of the exceptional categories laid down in the Lifestyle Equities case- Appeals allowed. [Relied on: Lifestyle Equities C.V. and Another v. Amazon Technologies Inc., 2025 INSC 1190; Paras 26-34] Popular Caterers v. Ameet Mehta, 2025 LiveLaw (SC) 1144 : 2025 INSC 1354

Section 37 - Challenge under – Limited Scope of Interference – Jurisdiction under Sections 34, 37– Findings must not shock judicial conscience or violate fundamental policy of law – Scope restated - Supreme Court, examining a challenge to the setting aside of an arbitral award under Section 37, reiterates that grounds for interference are strictly limited, confined to cases of perversity, patent illegality, violation of public policy, or fundamental policy of Indian law - Appellate jurisdiction under Section 37 is even narrower than under Section 34. [Paras 57–63, 69–71, 91–92] Sepco Electric Power Construction Corporation v. GMR Kamalanga Energy Ltd., 2025 LiveLaw (SC) 963 : 2025 INSC 1171

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 : 2025 (4) ABR 676 : (2025) 5 SCC 321

Section 38(2)– Termination of Arbitral Proceedings for Non-Payment of Fees– Distinction between 'Termination of Proceedings' and 'Termination of Mandate'– The Supreme Court clarified the legal framework surrounding the termination of arbitral proceedings due to a party's failure to deposit the required fees- i. Source of Power to Terminate- Held that under Section 38(2), if a party fails to pay their share of the deposit, and the other party also declines to pay that share, the Arbitral Tribunal is empowered to suspend or terminate the arbitral proceedings in respect of the claim or counter-claim; ii. Mandate vs. Proceedings- There exists a critical distinction between the termination of the mandate of an arbitrator (which refers to the authority and duty to adjudicate) and the termination of the proceedings themselves; iii. Effect of Termination under Section 38- Termination of proceedings under Section 38 does not automatically imply the withdrawal of the arbitrator from office under Sections 14 or 15- Instead, it results in the termination of the proceedings under Section 32(2)(c) because the continuation of proceedings has become "impossible."; iv. Procedural Self-Responsibility- Supreme Court emphasized that the consequence of termination is intended to penalize inertia and recalcitrance- Permitting a party whose conduct led to termination to simply restart the mechanism before a new arbitrator would defeat the principle of "procedural self-responsibility. [Relied on Oil and Natural Gas Corporation Ltd. v. Afcons Gunanusa JV (2022); Paras 84-95, 252-263] Harshbir Singh Pannu v. Jaswinder Singh, 2025 LiveLaw (SC) 1183 : 2025 INSC 1400

Section 38 - Remedies available to an aggrieved person against the order passed by the arbitral tribunal terminating proceedings under Section 38- held that when an arbitral tribunal terminates proceedings under the Arbitration and Conciliation Act, 1996, the first remedy for the parties is to seek a recall of that order before the tribunal itself, which must then decide whether the termination should stand. If the tribunal recalls the order and revives the arbitration, an aggrieved party has no immediate recourse and must participate in the proceedings, challenging the final award only under Section 34. However, if the recall plea is rejected, the aggrieved party may approach the court under Section 14(2), where the court will examine whether the arbitrator's mandate was validly terminated. If the court finds the termination illegal, it may set aside the order and remand the case to the tribunal or, if necessary, appoint a substitute arbitrator under Section 15. [Paras 296-308] Harshbir Singh Pannu v. Jaswinder Singh, 2025 LiveLaw (SC) 1183 : 2025 INSC 1400

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