In this article, LiveLaw brings to you a summary of important judgments rendered by the Supreme Court in 2025 in connection with the Arbitration and Conciliation Act, 1996. The same are as follows:1. High Court's Interference Under Article 226/227 Permissible Only If Arbitral Tribunal's Order Is Patently Perverse : Supreme CourtCase: Serosoft Solutions Pvt. Ltd. v. Dexter Capital Advisors...
In this article, LiveLaw brings to you a summary of important judgments rendered by the Supreme Court in 2025 in connection with the Arbitration and Conciliation Act, 1996. The same are as follows:
1. High Court's Interference Under Article 226/227 Permissible Only If Arbitral Tribunal's Order Is Patently Perverse : Supreme Court
Case: Serosoft Solutions Pvt. Ltd. v. Dexter Capital Advisors Pvt. Ltd. [Citation: 2025 LiveLaw (SC) 14]
In this case, a bench of Justices PS Narasimha and Manoj Misra observed that High Court's interference with arbitral proceedings under Article 226/227 is permissible only if the order is completely perverse i.e. "the perversity must stare in the face". Observing that the High Court failed to point out any perversity in the tribunal's order, the judgment deprecated the practice of interfering with the arbitral process when full opportunity was granted to the parties to present their case.
2. Supreme Court Sets Aside Awards Of Over Rs 46 Lakhs Passed Against UP Govt In Sham Arbitration Proceedings
Case: State of Uttar Pradesh and Another v. RK Pandey and Another [Citation: 2025 LiveLaw (SC) 45]
In this case, a bench of ex-CJI Sanjiv Khanna and Justice Sanjay Kumar set aside two ex-parte arbitration awards on grounds of fraud played by the litigant who appointed sole arbitrators and conducted 'sham' arbitration proceedings in a service dispute against U.P. Government and Government Hospital where he was employed.
3. Supreme Court Flags Stringent Limitation Provisions Curtailing Arbitration Appeal Remedies, Urges Parliament To Address Issue
Case: My Preferred Transformation & Hospitality Pvt. Ltd. & Anr. v. M/S Faridabad Implements Pvt. Ltd. [Citation: 2025 LiveLaw (SC) 49]
In this case, a bench of Justice PS Narasimha and Justice Pankaj Mithal raised concerns about the interpretation of limitation statutes in arbitration cases and observed that the rigid application of the law could curtail the limited remedy available under Section 34 of the Arbitration Act to challenge arbitral awards. “In our view, the above construction of limitation statutes is quite stringent and unduly curtails a remedy available to arbitrating parties to challenge the validity of an arbitral award. This must be addressed by the Parliament”, the Court observed.
While the Court concluded that the appellant's delay in filing the petition was not condonable under the prevailing legal framework, Justice Narasimha, in his opinion, with which Justice Mithal agreed, highlighted concerns with the strict interpretation of limitation provisions. Justice Narasimha observed that remedies available under Sections 34 and 37 of the Arbitration Act, which deal with challenging arbitral awards and appeals, are inherently limited due to statutory prescription and advocated for liberal interpretation of limitation provisions to preserve the limited window for parties to contest an award. A rigid approach, he warned, could result in denying remedies and discourage arbitration as a dispute resolution mechanism.
4. Arbitration Act | Courts' Jurisdiction Under Sections 34 and 37 Do Not Extend To Modifying Arbitral Award: Supreme Court Reiterates
Case: S. Jayalakshmi v. The Special District Revenue Officer & Ors. [Citation: 2025 LiveLaw (SC) 98]
In this case, a bench of Justices PS Narasimha and Manoj Misra affirmed the principle laid down in National Highways Authority of India v. M Hakeem that the jurisdiction of the Courts under Sections 34 and 37 of the Arbitration Act will not extend to modifying an arbitral award.
5. S. 16 Arbitration Act | Challenge To Arbitral Tribunal's Jurisdiction Impermissible After Submitting Statement Of Defence : Supreme Court
Case: M/s Vidyawati Construction Company v. Union of India [Citation: 2025 LiveLaw (SC) 105]
In this case, a bench of Justices Abhay S Oka and Ujjal Bhuyan affirmed the principle that the jurisdiction of the arbitral tribunal cannot be challenged after the submission of the statement of defense. Setting aside the High Court's decision, the judgment observed that it would be impermissible for the respondent to submit the objection to the tribunal's jurisdiction belatedly after submitting its statement of defense.
6. Arbitration Act | Appellate Courts Can't Reassess Awards, Must Limit Enquiry On Public Policy Breach : Supreme Court
Case: Somdatt Builders –NCC–NEC(JV) v. National Highways Authority Of India & Ors. [Citation: 2025 LiveLaw (SC) 115]
In this case, a bench of Justices Abhay S Oka and Ujjal Bhuyan reaffirmed that arbitral awards should only be interfered with in cases of perversity, violation of public policy, or patent illegality. It emphasized that appellate courts cannot reassess the merits of awards and must limit their inquiry to whether the award breaches Section 34(2)(b)(ii) of the Arbitration Act i.e., if the award is against the public policy of India.
7. Supreme Court Reiterates Narrow Scope Of Interference Under Section 37 Arbitration Act
Case: M/s. C & C Constructions Ltd. v. IRCON International Ltd. [Citation: 2025 LiveLaw (SC) 148]
In this case, a bench of Justices Abhay S Oka and Ujjal Bhuyan reiterated that in appeal under Section 37 of the Arbitration Act, the Court has a narrower scope to review the arbitral award if the award has already been upheld under Section 34 (application for setting aside arbitral awards).
8. 'Oral Undertaking Falls Within Scope Of Arbitration Clause' : Supreme Court Upholds Award Against Husband For Operation In Wife's Demat Account
Case: AC Chokshi Share Broker Private Limited v. Jatin Pratap Desai & Anr. [Citation: 2025 LiveLaw (SC) 178]
In this case, a bench of Justice PS Narasimha and Justice Sandeep Mehta held that an oral contract undertaking joint and several liability falls within the scope of an arbitration clause. Holding so, the Court affirmed an arbitral award against a husband, finding him jointly liable for the award due to a debit balance in a joint demat account registered in his wife's name.
The Court rejected the contention that the husband's liability constituted a "private transaction" beyond the scope of arbitration. Instead, it held that the arbitration clause, applicable to non-signatories, in conjunction with the husband's active participation in transactions within his wife's account, gave rise to an implied oral agreement establishing joint and several liabilities for both parties.
9. Arbitration Agreement Enforceable Against Legal Representatives Of Deceased Party : Supreme Court
Case: Rahul Verma and others v. Rampat Lal Verma and others [Citation: 2025 LiveLaw (SC) 269]
In this case, a bench of Justice JB Pardiwala and Justice R Mahadevan reiterated that an arbitration agreement is enforceable against the legal representatives of a deceased partner of a partnership firm. "An arbitration agreement does not cease to exist on the death of any party and the arbitration agreement can be enforced by or against the legal representatives of the deceased," the Court stated, referring to the judgment in Ravi Prakash Goel v. Chandra Prakash Goel & Anr. reported in (2008) 13 SCC 667.
10. International Commercial Arbitration | How To Determine Law Governing Arbitration Agreement? Supreme Court Discusses Tests
Case: Disortho SAS v. Meril Life Sciences Private Limited [Citation: 2025 LiveLaw (SC) 317]
In this case, a bench of ex-CJI Sanjiv Khanna, Justice Sanjay Kumar, and Justice KV Viswanathan ruled that 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).
The three-step enquiry test to determine the governing law of the arbitration agreement was: (i) express choice, (ii) implied choice, and (iii) closest and most real connection, i.e., in the absence of express choice for the law governing the arbitration agreement, the Court would identify the implied choice of law for the arbitration agreement, and even if the implied choice doesn't work, then the Court would apply the closest and most real connection test which considers several factors like parties intention, business operations, etc.
11. S. 34(3) Arbitration Act | Application Filed On Next Working Day After 90 Day Period Is Within Limitation : Supreme Court
Case: M/s RK Transport Company v. M/s Bharat Aluminum Company Ltd. (BALCO) [Citation: 2025 LiveLaw (SC) 391]
In this case, a bench of Justices PS Narasimha and Prashant Kumar Mishra held that the three-month limitation period under Section 34(3) of the Arbitration Act for challenging an arbitral award should not be rigidly interpreted as exactly 90 days, rather it should be interpreted as three calendar months. Relying on State of Himachal Pradesh v. Himachal Techno Engineers, (2010) 12 SCC 210 and applying Section 12 of the Limitation Act, 1963, the Court reiterated that 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.
12. Supreme Court Holds Chandigarh Authorities Liable For Delay In Film City Project, Directs Refund Of 47.75 Crores To Successful Bidder
Case: M/s. Parsvnath Film City Ltd. v. Chandigarh Administration & Others [Citation: 2025 LiveLaw (SC) 422]
In this case, a bench of Justices BV Nagarathna and Satish Chandra Sharma largely upheld an arbitral award passed in favor of a company engaged by the Chandigarh Administration to establish a Multimedia-cum-Film City in the Union Territory, holding the authorities liable to refund a forfeited bid amount of Rs.47.75 crores.
The Court was of the view that the Punjab and Haryana High Court wrongly set aside the arbitral award. It opined that though time was of the essence to the project sought to be developed, there was a clear and unreasonable delay (of over 16 months) attributable to the authorities in handing over encumbrance-free land to the appellant-Company. "each day's delay in executing the project after signing of the Development Agreement had commercial consequences and struck at the heart of the Development Agreement", the Court said.
13. Arbitral Tribunal Can Proceed Against Party Though They Weren't Served With S.21 Notice Or Made Party In S.11 Application : Supreme Court
Case: Adavya Projects Pvt. Ltd. v. M/s Vishal Structurals Pvt. Ltd. & Ors. [Citation: 2025 LiveLaw (SC) 439]
In this case, a bench of Justices PS Narasimha and Manoj Misra observed that not being served with the notice invoking arbitration under Section 21 of the Arbitration and Conciliation Act, and not being made a party in the Section 11 application (for appointment of arbitrator), are not sufficient grounds to hold that a person cannot be made party to arbitral proceedings.
"A notice invoking arbitration under Section 21 of the ACA is mandatory...and it is a prerequisite to filing an application under Section 11. However, merely because such a notice was not issued to certain persons who are parties to the arbitration agreement does not denude the arbitral tribunal of its jurisdiction to implead them as parties during the arbitral proceedings.
...merely because a court does not refer a certain party to arbitration in its order does not denude the jurisdiction of the arbitral tribunal from impleading them during the arbitral proceedings as the referral court's view does not finally determine this issue. The relevant consideration to determine whether a person can be made a party before the arbitral tribunal is if such a person is a party to the arbitration agreement", the Court said.
14. Supreme Court Flags Long Submissions In S.34/37 Arbitration Act Proceedings, Says Timelimit Needs To Be Imposed
Case: Larsen and Toubro Ltd. v. Puri Construction Pvt. Ltd. & Ors. [Citation: 2025 LiveLaw (SC) 449]
In this case, a bench of Justices Abhay S Oka and Pankaj Mithal expressed its displeasure over the prolonged arguments and submissions made by members of the Bar in arbitration proceedings under Sections 34 and 37 of the Arbitration Act.
The Court noted that excessively long oral submissions force judges to invest significant time in reviewing extended arguments, often supported by a large volume of case law, regardless of their relevance. This practice, particularly in high-stakes matters, leads to unnecessarily lengthy judgments and ultimately undermines the efficiency and growth of arbitration as an effective dispute resolution mechanism in India.
“The high monetary stakes involved in the proceedings should not result in unnecessary long oral submissions or concurrent submissions. All these results in criticism about arbitrations in India. There is a need to impose a time limit for oral submissions in such cases”, it observed. The Court reminded the members of the bar that Sections 34 and 37 petitions have a narrow scope, as they are not appellate proceedings but limited judicial reviews (only on grounds like fraud, bias, or patent illegality).
15. Arbitral Award For Claims Not Included In IBC Resolution Plan Can't Be Enforced: Supreme Court
Case: Electrosteel Steel Limited (Now M/S ESL Steel Limited) v. Ispat Carrier Private Limited [Citation: 2025 LiveLaw (SC) 491]
In this case, a bench of Justice Abhay S Oka and Justice Ujjal Bhuyan allowed an appeal challenging the enforcement of an arbitral award passed by the Micro and Small Enterprises Facilitation Council against Electrosteel Steels Ltd., holding that the award was non-executable in view of the resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code. The Court reiterated that once a resolution plan is approved by the National Company Law Tribunal under Section 31(1) of the IBC, any claim that is not part of the plan stands extinguished and cannot be pursued further.
16. S.34 Arbitration Act | Respect Arbitral Autonomy; Judicial Interference Should Be Minimal : Supreme Court
Case: Consolidated Construction Consortium Limited v. Software Technology Parks of India [Citation: 2025 LiveLaw (SC) 501]
In this case, a bench of Justices Abhay S Oka and Ujjal Bhuyan reiterated that courts cannot go beyond the scope of Section 34 of the Arbitration Act while deciding an application for setting aside of an award. "the role of the court under Section 34 of the 1996 Act is clearly demarcated. It is a restrictive jurisdiction and has to be invoked in a conservative manner. The reason is that arbitral autonomy must be respected and judicial interference should remain minimal otherwise it will defeat the very object of the 1996 Act”, it stated.
17. Courts Can Modify Arbitral Awards In Certain Circumstances Under S.34/37 Arbitration Act: Supreme Court By 4:1
Case: Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited [Citation: 2025 LiveLaw (SC) 508]
In this case, answering a reference, a Constitution Bench (by 4:1) of the Court held that Appellate Courts have limited powers to modify arbitral awards while exercising powers under either Section 34 or 37 of the Arbitration Act. The majority judgment by ex-CJI Sanjiv Khanna held that the Courts have a limited power under Section 34/37 to modify arbitral awards. This limited power can be exercised in the following circumstances :
1. When the award is severable by separating the invalid portion from the valid portion of the award.
2. To correct any clerical, computation or typographical errors which appear erroneous on the face of the record.
3. To modify post-award interest in some circumstances.
4. The special powers of the Supreme Court under Article 142 of the Constitution can be applied to modify awards. But this power must be exercised with great caution within the limits of the Constitution.
The Court also held that the powers of Courts to remand arbitral awards back to the Tribunal under Section 34(4) of the Arbitration Act cannot be seen as a straight-jacket formula. It 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.
It further noted that in order to ensure efficient dispute resolution and uphold the objectives of the Arbitration Act, the Court should be allowed to modify awards when parties challenge the tribunal's decision.
Justice KV Viswanathan delivered a dissenting opinion on certain aspects. He held that under Section 34, Court cannot modify the award unless expressly authorized by the law, since it tantamount to exercising a merits review. Courts exercising Section 34 power cannot change, vary or modify arbitral awards as it strikes at the core and the root of the ethos of the arbitration exercise.
Further, he disagreed with the view of the majority that the Courts can modify post-award interest. If there is any need for modification of interest, the matter has to be remitted back to the Tribunal. Also, this can lead to uncertainties and difficulties in enforcing foreign awards.
Justice Viswanathan also disagreed with the view that Article 142 of the Constitution can be used to modify awards. If such a power is recognized, it will lead to uncertainties in the arbitration litigation, he opined. However, Justice Viswanathan agreed that clerical or typographical mistakes can be corrected under Section 34.
18. Supreme Court Criticises Arbitration Bill 2024 For Not Recognising Power To Implead Non-Signatories, Urges Union To Make Changes
Case: ASF Buildtech Private Limited v. Shapoorji Pallonji and Company Private Limited [Citation: 2025 LiveLaw (SC) 521]
In this case, a bench of Justices JB Pardiwala and R Mahadevan expressed 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 Act, 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.
19. Dispute Over Full & Final Settlement Is Arbitrable Despite Parties Discharging Contract : Supreme Court
Case: Arabian Exports Private Limited v. National Insurance Company Ltd. [Citation: 2025 LiveLaw (SC) 539]
In this case, a bench of Justices Abhay S Oka and Ujjal Bhuyan 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. Setting aside the High Court's decision, the Court emphasized that mere signing of a discharge voucher does not bar arbitration if coercion is alleged.
20. High Court May Grant Article 227 Interim Relief In Arbitration Proceedings In Exceptional Cases : Supreme Court
Case: M/s Jindal Steel and Power Ltd. & Anr. v. M/s Bansal Infra Projects Pvt. Ltd. & Others [Citation: 2025 LiveLaw (SC) 544]
In this case, a bench of Justices JB Pardiwala and R Mahadevan held that while the 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.
The Court 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. Because the encashment of the bank guarantee would have caused irreversible harm, it upheld the High Court's intervention in a challenge against Section 9.
21. Private Arbitration Clauses Cannot Override Statutory Mandates Under MSMED Act : Supreme Court
Case: M/s Harcharan Dass Gupta v. Union of India [Citation: 2025 LiveLaw (SC) 567]
In this case, a bench of Justices PS Narasimha and Joymalya Bagchi, reaffirming that the MSMED Act prevails over the Arbitration Act, as held in Gujarat State Civil Supplies v. Mahakali Foods, 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.
22. Supreme Court Deprecates 'Deliberate, Ambiguous' Drafting Of Arbitration Clauses; Calls For Suo Motu Action In Malafide Cases
Case: South Delhi Municipal Corporation v. SMS Limited [Citation: 2025 LiveLaw (SC) 568]
In this case, a bench of Justices Surya Kant (now CJI) and N Kotiswar Singh 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. It further opined that the time is not far when personal liability would need to be attached to such "unscrupulous acts".
23. S. 31(7) Arbitration | Arbitral Tribunal Has Power To Award Different Rates Of Interest For Pre-Reference & Pendente Lite Period : Supreme Court
Case: M/s. Interstate Construction v. National Projects Construction Corporation Ltd. [Citation: 2025 LiveLaw (SC) 585]
In this case, a bench of Justices Abhay S Oka and Ujjal Bhuyan held that under the Arbitration Act, an Arbitral Tribunal has the power to award different rates of interest for different phases. It 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 Court affirmed its 2015 ruling in Hyder Consulting (UK) Ltd. v. Governor, State of Orissa, (2015) 2 SCC 189, where it was held that the "sum" in Section 31(7)(b) includes principal plus accrued interest, allowing compound interest.
24. All Trademark Disputes Aren't Outside Arbitration; In Personam Issues Relating To License Agreement Arbitrable : Supreme Court
Case: K Mangayarkarasi & Anr. v. NJ Sundaresan & Anr. [Citation: 2025 LiveLaw (SC) 597]
In this case, a bench of Justices JB Pardiwala and R Mahadevan 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, reaffirming that contractual disagreements involving intellectual property rights (IPRs) can be resolved through arbitration unless they involve sovereign or public (in rem) rights.
25. S. 11 SARFAESI Act | DRT Can't Decide Disputes Between Banks Over Secured Assets; Must Be Referred To Arbitration : Supreme Court
Case: Bank of India v. M/s Sri Nangli Rice Mills Pvt. Ltd. & Ors. [Citation: 2025 LiveLaw (SC) 616]
In this case, a bench of Justices JB Pardiwala and Pankaj Mithal held that inter-creditor disputes (between secured creditors) must be resolved through arbitration under Section 11 of the Act read with the 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.
Further, the Court clarified that DRT would lose its jurisdiction to adjudicate the dispute, and the dispute would be settled through an arbitration under Section 11 upon fulfilment of twin conditions i.e., first, the dispute must be between any bank or financial institution or asset reconstruction company or qualified buyer and secondly, the dispute must relate to securitization or reconstruction or non-payment of any amount due including interest.
26. Clause Saying Arbitration "May Be Sought" Doesn't Constitute A Binding Arbitration Agreement : Supreme Court
Case: BGM And M-RPL-JMCT (JV) v. Eastern Coalfields Limited [Citation: 2025 LiveLaw (SC) 731]
In this case, a bench of Justices PS Narasimha and Manoj Misra held that a clause in an agreement that arbitration "may be sought" to resolve disputes between the parties will not constitute a binding arbitration agreement. Approving the refusal of the High Court to refer the parties to arbitration, it observed that the phraseology of the clause did not indicate that the parties were bound to go for arbitration.
The Court also clarified that when referral courts do a plain reading of a contractual clause to assess the existence of an arbitration agreement, it does not amount to conducting a detailed inquiry or a mini-trial, and therefore does not violate the limited scope prescribed under Section 11(6-A) of the Arbitration Act. It further said that for the limited purpose of satisfying whether an arbitration agreement as contemplated in Section 7 of the Act exists, the referral courts can scrutinize the documents relied upon by the parties in proof of its existence.
27. Mere Pendency Of Criminal Cases Alleging Simple Fraud No Bar To Arbitration : Supreme Court
Case: The Managing Director Bihar State Food and Civil Supply Corporation Limited & Anr. v. Sanjay Kumar [Citation : 2025 LiveLaw (SC) 778]
In this case, a bench of Justices PS Narasimha and Manoj Misra allowed the arbitration proceedings to continue in multi-crore Bihar Public Distribution System Scam, stating that mere pendency of the criminal proceedings in offences involving simple fraud like cheating, criminal breach of trust doesn't bar a dispute from being referred to an arbitration. “The mere fact that criminal proceedings can or have been instituted in respect of the same incident(s) would not per se lead to the conclusion that the dispute which is otherwise arbitrable ceases to be so”, the court said.
In holding so, the bench dismissed a batch of petitions filed by Bihar State Food and Supply Corporation against the High Court's decision to allow application for appointment of an arbitrator in 1,500-crore Bihar Public Distribution System scam.
Relying on a 7-judge bench decision in In Re: Interplay, the Court approved the arbitration, noting that 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.
28. Place Of Exclusive Jurisdiction Deemed As 'Seat' Of Arbitration : Supreme Court
Case: M/s Activitas Management Advisor Private Limited v. Mind Plus Healthcare Private Limited [Citation: 2025 LiveLaw (SC) 795]
In this case, a bench of Justices PS Narasimha and AS Chandurkar observed that in the absence of a seat or venue of arbitration in the arbitration agreement, the place where the exclusive jurisdiction has been vested as per the agreement would be regarded as the "seat" of the arbitration. Relying on Brahmani River Pellets Ltd. v. Kamachi Industries Ltd. (2020), the Court held that the Bombay High Court would have jurisdiction as the "seat" of arbitration, even in the absence of an expressly specified seat in the agreement.
29. Non-Signatories Have No Right To Attend Arbitration Proceedings, Their Presence Breaches Confidentiality : Supreme Court
Case: Kamal Gupta & Anr. v. M/s L.R. Builders Pvt. Ltd & Anr. Etc. [Citation: 2025 LiveLaw (SC) 799]
In this case, a bench of Justices PS Narasimha and AS Chandurkar observed that a party non-signatory to an arbitration agreement cannot participate in the arbitration proceedings, as the signatories to an arbitration agreement are only entitled to remain present in the arbitration proceedings.
30. Mere Non-Signing Won't Invalidate Arbitration Agreement If Parties Otherwise Consented To Arbitration : Supreme Court
Case: Glencore International AG Versus M/s. Shree Ganesh Metals and another [Citation: 2025 LiveLaw (SC) 839]
In this case, a bench of Justices Sanjay Kumar and Satish Chandra Sharma observed that merely because an arbitration agreement was not signed, there is no bar to refer the dispute to arbitration, if the parties have otherwise consented to arbitration.
The Court set aside the Delhi High Court's decision which declined reference to arbitration merely because Respondent No.1 didn't sign the arbitration agreement. Since the Respondent No.1 consented to the contractual terms via email, the Court held that the High Court's refusal to refer to an arbitration on the ground of non-signing of the arbitration agreement cannot be sustained.
The judgment, authored by Justice Kumar, relied on Govind Rubber Limited vs. Louis Dreyfus Commodities Asia Private Limited (2015) to state that “a commercial document having an arbitration clause has to be interpreted in such a manner as to give effect to the agreement rather than invalidate it".
31. Arbitration | Delivery Of Award To Govt Official Not Connected With Case Doesn't Amount To Valid Service On State : Supreme Court
Case: M/s. Motilal Agarwala v. State of West Bengal & Anr. [Citation: 2025 LiveLaw (SC) 867]
In this case, a bench of Justice JB Pardiwala and Justice KV Viswanathan clarified that when the government or one of its departments is a party to arbitration, delivery of an arbitral award to an official who is not connected with or aware of the proceedings cannot be treated as valid service for commencing the limitation period to challenge the award. Citing its ruling of Union of India vs. Tecco Trichy Engineers & Contractors (2005), the Court said that the delivery of the copy of the arbitral award should be made to the “party to the proceedings”, and if government is part to the proceedings than the delivery should be made to an individual who has the knowledge and is the best person to understand and appreciate an award and more particularly, to take decision for its challenge.
32. Arbitration | Execution Of Award Cannot Be Stalled Merely Due To Pendency Of Section 37 Appeal : Supreme Court
Case: Chakardhari Sureka v. Prem Lata Sureka through SPA & Ors. [Citation: 2025 LiveLaw (SC) 919]
In this case, a bench of Justices Manoj Misra and Ujjal Bhuyan held that the execution of an arbitral award cannot be stalled merely on the ground that an appeal under Section 37 of the Arbitration and Conciliation Act is pending.
The Court emphasized that pendency of a 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, it added.
33. S. 31(7)(b) Arbitration Act | Claim For Additional Post-Award Interest Barred When Award Fixes Rate Until Payment : Supreme Court
Case: HLV Limited (formerly known as Hotel Leelaventure Pvt. Ltd.) v. PBSAMP Projects Pvt. Ltd. [Citation: 2025 LiveLaw (SC) 944]
In this case, a bench of Justice Manoj Misra and Justice Ujjal Bhuyan held that if an arbitral award provides a composite interest rate covering the entire period from the cause of action to payment, the award holder cannot claim additional compound interest at the post-award stage under Section 31(7)(b) of the Arbitration Act.
Section 31(7)(b) of the Act provides for post-award interest at 18% from the date of the award until payment. However, if the arbitral award specifies a composite rate of interest, the award holder cannot claim additional 18% compound interest under this provision. In such cases, the interest is governed solely by the rate in the award, as Section 31(7)(b) applies “unless the award otherwise directs". In this case, the award expressly set interest at 21% until repayment, therefore the question of awarding post-award interest would not arise, the court said.
34. Arbitral Award Must Be Within Parameters Of Agreement Between Parties : Supreme Court Dismisses Chinese Company's Appeal
Case: Sepco Electric Power Construction Corporation v. GMR Kamalanga Energy Ltd. [Citation: 2025 LiveLaw (SC) 963]
In this case, a bench of ex-CJI BR Gavai and Justice AG Masih upheld the setting aside of an arbitral award of nearly ₹995 crore granted in favor of Chinese company SEPCO Electric Power Construction Corporation, holding that the arbitral tribunal had erred by re-interpreting contractual terms and departing from the agreed stipulations in violation of Section 28(3) of the Arbitration Act. The Court found that the arbitral tribunal overstepped its mandate by using a 2012 email to create a case of "waiver" or "equitable estoppel" that was never pleaded by SEPCO. This act, the Court held, amounted to the tribunal rewriting the core terms of the contract for the parties, a direct violation of Section 28(3) of the Arbitration Act, which mandates that tribunals decide disputes in accordance with the contract's terms.
35. Right To Seek Arbitration Not Lost Just Because Arbitration Clause Became Inoperable Due To Statutory Amendment: Supreme Court
Case: Offshore Infrastructures Limited v. M/s Bharat Petroleum Corporation Limited [Citation: 2025 LiveLaw (SC) 982]
In this case, a bench of Justice Dipankar Datta and Justice AG Masih held that the invalidity or inoperability of an arbitration clause, such as one naming an ineligible arbitrator under Section 12(5) of the Arbitration Act, does not nullify the underlying arbitration agreement between the parties. The Court clarified that in such cases, the Court is empowered to step in and appoint a neutral arbitrator under Section 11(6) of the Act to preserve the efficacy of the arbitration mechanism.
The Court emphasized that the statutory disqualification of a named arbitrator under Section 12(5), read with the Seventh Schedule, does not render the arbitration clause itself void or non-existent. Rather, the clause remains enforceable, and the power to appoint an independent arbitrator shifts to the Court.
The judgment authored by Justice Masih rejected the Respondent's contention that the arbitration clause containing the procedure of arbitrator appointment became inoperative after the 2015 Amendment. The Court said that “merely because the procedure to appoint an arbitrator provided in the clause has become inoperative due to subsequent changes in statutory provisions, would not mean that the core of the contract referring the dispute for adjudication to arbitrator would be rendered nugatory".
36. Decision On Limitation Made On Demurrer Not Final; Party Autonomy In Arbitration Cannot Override Statute: Supreme Court
Case: Urban Infrastructure Real Estate Fund v. Neelkanth Realty Pvt. Ltd. & Ors. [Citation: 2025 LiveLaw (SC) 1028]
In this case, a bench of Justice JB Pardiwala and Justice KV Viswanathan held that when an arbitral tribunal decides a preliminary issue such as limitation on the basis of demurrer, that decision cannot preclude the tribunal from revisiting the issue at a later stage if evidence warrants it. It affirmed the Bombay High Court's view that a decision on demurrer is provisional and not an adjudication on merits.
37. Arbitration | When Delay In Pronouncing Arbitral Award Can Be Ground To Set It Aside : Supreme Court Explains
Case: M/s. Lancor Holdings Limited v. Prem Kumar Menon and others [Citation: 2025 LiveLaw (SC) 1056]
In this case, a bench of Justice Sanjay Kumar and Justice Satish Chandra Sharma clarified that while mere delay in pronouncing an arbitral award does not invalidate it, an inordinate and unexplained delay making the decision ineffective or unworkable can render the award void. The Court further held that an award lacking consequential relief and forcing parties to seek redress again in court is contrary to public policy and therefore unenforceable.
38. Arbitration | Objections To Arbitral Award Execution Maintainable Only If Decree Is Void Or Without Jurisdiction : Supreme Court
Case: MMTC Limited v. Anglo American Metallurgical Coal Pvt. Limited [Citation: 2025 LiveLaw (SC) 1060]
In this case, a bench of Justices Sanjay Kumar and KV Viswanathan ruled against the stalling of the enforcement of an arbitral award at the execution stage, reiterating that the objections against the execution of an award lie in a narrow compass, such as only when a decree is inherently void or passed without jurisdiction. Relying on Electrosteel Steel Limited (Now M/s ESL Steel Limited) v. ISPAT Carrier Private Limited, 2025 LiveLaw (SC) 491, the Court held that belated allegations of fraud and collusion cannot be invoked to reopen or obstruct the enforcement of an arbitral award that has already been upheld up to the Supreme Court.
39. Mere Use Of Word 'Arbitration' Does Not Create Arbitration Agreement Unless Parties Clearly Intend So: Supreme Court
Case: M/s Alchemist Hospitals Ltd. v. M/s ICT Health Technology Services India Pvt. Ltd. [Citation: 2025 LiveLaw (SC) 1070]
In this case, a bench of Justice Dipankar Datta and Justice AG Masih upheld the Punjab and Haryana High Court's decision refusing to refer the dispute to arbitration, observing that the mere use of the term “arbitration” in a clause is not sufficient to mandate reference to arbitration unless the parties clearly intended to resolve their disputes through arbitration.
“mere use of the word 'arbitration” is not sufficient to treat the clause as an arbitration agreement when the corresponding mandatory intent to refer the disputes to arbitration and the consequent intent to be bound by the decision of the arbitral tribunal is missing”, the Court said.
40. Arbitration | Dispute On Interest Rate Doesn't Fall Under Public Policy Ground To Set Aside Award Ordinarily: Supreme Court
Case: Sri Lakshmi Hotel Pvt. Limited & Anr. v. Sriram City Union Finance Ltd. & Anr. [Citation: 2025 LiveLaw (SC) 1118]
In this case, a bench of Justices JB Pardiwala and KV Viswanathan upheld the charging of a 24% interest rate in an arbitral award, stating that an interest rate agreed upon in a commercial loan agreement did not violate the fundamental policy of Indian law. The Court pointed out that the imposition of a high interest in the background of contemporary commercial practices wouldn't be per se against the fundamental policy of Indian Law, or against the basic notions of morality or justice as per clauses (ii) and (iii) of Explanation 1 to Section 34(2)(b) of the Arbitration Act.
41. Indian Courts Have No Jurisdiction To Appoint Arbitrator For Foreign-Seated Arbitration : Supreme Court
Case: Balaji Steel Trade v. Fludor Benin S.A. & Ors. [Citation: 2025 LiveLaw (SC) 1132]
In this case, a bench of Justices PS Narasimha and Atul S Chandurkar dismissed a plea seeking the appointment of an arbitrator in an international commercial arbitration, holding that once the principal contract is governed by foreign law and provides for a foreign-seated arbitration, Indian courts lose jurisdiction, irrespective of the Indian nationality of any party. “Indian Courts have no jurisdiction to appoint an arbitrator for a foreign-seated arbitration, irrespective of the nationality or domicile of the parties”, observed the Court.
Relying on Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 and BGS SGS SOMA JV v. NHPC Ltd., (2020) 4 SCC 234, the Court reiterated that Part I of the Arbitration Act, including Section 11, does not apply to foreign-seated arbitrations. Once parties choose a foreign seat, Indian courts cannot appoint arbitrators for the same dispute, the Court added.
42. Arbitration | Unconditional Stay On Execution Of Award Only In Exceptional Cases: Supreme Court
Case: Popular Caterers v. Ameet Mehta & Ors. [Citation: 2025 LiveLaw (SC) 1144]
In this case, a bench of Justices JB Pardiwala and KV Viswanathan declined to grant an unconditional stay on the execution of the arbitral award, holding that the requirement to deposit the security amount was justified since the award was not shown to have been induced or tainted by fraud or corruption. Referring to Lifestyle Equities C.V. and Another v. Amazon Technologies Inc., it reiterated that for the grant of an unconditional stay on the execution of an arbitral award, the following requirements need to be fulfilled, i.e.,
(i) The decree is egregiously perverse,
(ii) is riddled with patent illegalities,
(iii) is facially untenable; and/or
(iv) such other exceptional causes similar in nature.
43. Arbitration | No Review Or Appeal Lies Against Order Appointing Arbitrator : Supreme Court
Case: Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Limited and Others [Citation: 2025 LiveLaw (SC) 1153]
In this case, a bench of Justices JB Pardiwala and R Mahadevan observed that a review or appeal from an order of appointment of an arbitrator is impermissible. “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", the Court 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.
The Court said 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.”
It clarified that, “while 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.”
44. Arbitration | Agreed Interest Rate Can't Be Later Challenged As Exorbitant; Arbitrator Cannot Overrride Contractual Rate : Supreme Court
Case: BPL Limited v. Morgan Securities and Credits Private Limited [Citation: 2025 LiveLaw (SC) 1169]
In this case, a bench of Justice JB Pardiwala and Justice Sandeep Mehta dismissed appeals filed by BPL Limited against an arbitral award, upholding the enforcement of a 36% annual interest rate on outstanding dues owed to Morgan Securities and Credits Private Limited. The Court ruled that corporate entities cannot claim contractual terms are "unconscionable" after voluntarily agreeing to them.
“Once the parties by mutual consent agreed to a particular rate of interest to be charged and the same is included in the terms of the contract there is no escape thereafter. The party concerned would be bound by the rate of interest as prescribed in the agreement. The rate of interest once agreed and forms part of a written contract between the parties the borrower after availing the finance cannot turn around and question the rate on the ground of being unconscionable or opposed to Public policy”, the Court held.
45. Supreme Court Refers 'Bharat Drilling' Judgment' To Larger Bench For Clarity Whether Prohibited Claims Bind Arbitral Tribunals
Case: State of Jharkhand v The Indian Builders Jamshedpur [Citation: 2025 LiveLaw (SC) 1173]
In this case, a bench of Justice PS Narasimha and Justice AS Chandurkar referred the 2009 judgment in Bharat Drilling and Foundation Treatment Private Limited v. State of Jharkhand (2009) 16 SCC 705 to a larger bench, observing that the ruling has been repeatedly and incorrectly relied upon to dilute prohibitory clauses in government contracts. The bench said the earlier decision is not an authority for the proposition that excepted or prohibited claim clauses bind only the employer and do not restrict the arbitral tribunal. Reaffirming that party autonomy is the foundation of arbitration, it added that arbitral tribunals must first look to the contract that defines the legal relationship between the parties. It cited Pam Developments Private Limited which stressed the duty of tribunals and courts to examine prohibitory clauses before awarding sums that the parties have contractually barred.
46. If Arbitral Tribunal Terminates Proceedings For Not Paying Fees, Remedy Is To Seek Recall & Then Invoke S.14(2) : Supreme Court
Case: Harshbir Singh Pannu and Anr. v. Jaswinder Singh [Citation: 2025 LiveLaw (SC) 1183]
In this case, a bench of Justice JB Pardiwala and Justice R Mahadevan held that an arbitral tribunal is legally empowered to terminate proceedings under Section 38(2) of the Arbitration Act when a party fails to pay its share of the arbitrator's fees. Once such a termination occurs, the remedy available to the party is to seek the recall of the order before the Tribunal itself. If the recall application is dismissed, then the party has to approach the Court under Section 14(2).
The Court also criticized the new Arbitration and Conciliation Bill for failing to address the ambiguity regarding the relief against an arbitral tribunal terminating the proceedings, noting that the new Bill made no effort to remedy this gap in the law.
47. Non-Signatory Which Isn't A Veritable Party Cannot Invoke Arbitration Clause : Supreme Court
Case: Hindustan Petroleum Corporation Ltd. Versus BCL Secure Premises Pvt. Ltd. [Citation: 2025 LiveLaw (SC) 1184]
In this case, a bench of Justice JB Pardiwala and Justice KV Viswanathan held that a non-signatory to an arbitration agreement cannot invoke the arbitration clause against a party with whom it shares no legal relationship and where there is no indication of any intention to bind the non-signatory to the main contract. The judgment authored by Justice Viswanathan, relying on Cox and Kings Limited v. Sap India Private Limited and Another, 2023 LiveLaw (SC) 1042 observed that “mere legal or commercial connection is not sufficient for a non-signatory to claim through or under a signatory party.”
The Court said that unless there exists any intent to effect a legal relationship between the signatory (appellant) and non-signatory (respondent) to indicate that the respondent was a veritable party, the non-signatory would not be able to invoke arbitration against the party with whom there exists no legal relationship.
48. S. 29A Arbitration Act | Arbitrator's Mandate Terminates On Expiry Of Time; Substituted Arbitrator Must Resume After Extension : Supreme Court
Case: Mohan Lal Fatehpuria v. M/s Bharat Textiles & Ors. [Citation: 2025 LiveLaw (SC) 1190]
In this case, a bench of Justice Sanjay Kumar and Justice Alok Aradhe held that once the statutory 18-month period for delivering an arbitral award expires, the arbitrator's mandate automatically comes to an end as per Section 29A(4) of the Arbitration Act, when no application for extension is made. Therefore, when an extension of time is granted by the Court after the mandate of the arbitrator is terminated, then the substitution of the arbitrator is mandatory under Section 29A(6) of the Arbitration Act.
In essence, the Court held that once the maximum 18-month period for delivering an arbitral award has expired, only a substituted arbitrator can continue the proceedings when any further extension of time is granted.
49. Issues About Party's Capacity To Invoke Arbitration And Maintainability Issues Fall Within Tribunal's Domain : Supreme Court
Case: M/s Andhra Pradesh Power Generation Corporation Limited (APGENCO) v. M/s Tecpro Systems Limited & Ors. [Citation: 2025 LiveLaw (SC) 1217]
In this case, a bench of Justice PS Narasimha and Justice Atul S Chandurkar reiterated that the questions related to whether an individual is a veritable party to an arbitration agreement, eligible to invoke the arbitration clause, shall be referred for the Arbitral Tribunal's consideration. It relied on Cox and Kings Ltd. v. SAP India Pvt. Ltd, to hold that where complex questions arise as to the status of a party invoking arbitration, the referral court should leave such determinations to the tribunal.
50. S. 37 Arbitration | Arbitral Awards Not Liable To Set Aside On Mere Error In Law Or Misappreciation Of Evidence : Supreme Court
Case: Ramesh Kumar Jain v. Bharat Aluminium Company Limited (BALCO) [Citation: 2025 LiveLaw (SC) 1226]
In this case, a bench of Justices Aravind Kumar and NV Anjaria overturned the Chhattisgarh High Court's judgment, holding that the High Court had exceeded its jurisdiction under Section 37 of the Arbitration Act by effectively acting as an appellate court, re-appreciating the evidence, and substituting its own interpretation in place of the arbitral award.
“Even an award which is based on little or no evidence would not be held to be invalid on this score. At times, the decisions are taken by the arbitrator acting on equity and such decisions can be just and fair therefore award should not be overridden under section 34 and 37 of the A&C Act on the ground that the approach of the arbitrator was arbitrary or capricious”, the court added.
The judgment authored by Justice Kumar emphasized that the High Court erred in invoking a patent illegality ground to interfere with the award, as the ground of patent illegality does not encompass erroneous application of law or re-appreciation of evidence. It refers only to a glaring illegality going to the root of the award, such as a decision based on no evidence or one that directly contradicts an explicit contractual bar.