Arbitration Monthly Digest: August 2025

Supreme Court Mere Pendency Of Criminal Cases Alleging Simple Fraud No Bar To Arbitration : Supreme Court Cause Title: THE MANAGING DIRECTOR BIHAR STATE FOOD AND CIVIL SUPPLY CORPORATION LIMITED & ANR. VERSUS SANJAY KUMAR Citation : 2025 LiveLaw (SC) 778 The Supreme Court has allowed the arbitration proceedings to continue in multi-crore Bihar Public Distribution System (“PDS”) 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. The bench comprising Justices PS Narasimha and Manoj Misra dismissed the batch of petitions filed by Bihar State Food and Supply Corporation (“BSFSC”) against the High Court's decision to allow application for appointment of an arbitrator in 1,500-crore Bihar Public Distribution System (PDS) scam. Relying on a seven-judge bench decision in In Re: Interplay, the judgment authored by Justice Narasimha 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. Place Of Exclusive Jurisdiction Deemed As 'Seat' Of Arbitration : Supreme Court Cause Title: M/S ACTIVITAS MANAGEMENT ADVISOR PRIVATE LIMITED VERSUS MIND PLUS HEALTHCARE PRIVATE LIMITED Citation : 2025 LiveLaw (SC) 795 The Supreme Court 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. The bench of Justices P.S. Narasimha and A.S. Chandurkar set aside the Punjab & Haryana High Court's order allowing an application for the appointment of an arbitrator in a dispute where the arbitration agreement conferred exclusive jurisdiction for adjudication upon the Bombay High Court. 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. “Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts…”, the court said in Brahmani River Pellets Ltd. Non-Signatories Have No Right To Attend Arbitration Proceedings, Their Presence Breaches Confidentiality : Supreme Court Cause Title: KAMAL GUPTA & ANR. VERSUS M/S L.R. BUILDERS PVT. LTD & ANR. ETC. (and connected matter) Citation : 2025 LiveLaw (SC) 799 The Supreme Court on Wednesday (Aug. 13) 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. The bench comprising Justices PS Narasimha and AS Chandurkar set aside the Delhi High Court's decision, which allowed the non-signatories to an arbitration agreement to attend the arbitration proceedings in the presence of their counsels. Thus, the Court considered the issue of “Whether it is permissible for a non-signatory to an agreement leading to arbitration proceedings to remain present in such arbitration proceedings?” Answering in the negative, the judgment authored by Justice Chandurkar observed: “Once it is clear that the arbitral award would not bind non-parties to the said MoU/FSD as such parties were not signatories to the said documents, there would be no legal basis whatsoever to permit a non-signatory to the MoU/FSD to remain present in the proceedings before the sole arbitrator. When the arbitration proceedings can take place only between parties to an arbitration agreement and Section 35 of the Act does not make the arbitral award to be passed binding on non-signatories to such agreement, we do not find any legal right conferred by the Act that would enable a non-party to the agreement to remain present in arbitration proceedings between signatories to the agreement.”, the court observed. Mere Non-Signing Won't Invalidate Arbitration Agreement If Parties Otherwise Consented To Arbitration : Supreme Court Cause Title: Glencore International AG Versus M/s. Shree Ganesh Metals and another Citation : 2025 LiveLaw (SC) 839 The Supreme Court 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 Monthly Digest: August 2025

Mohd Talha Hasan

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