Arbitration Monthly Digest: January 2025

Supreme Court High Court's Interference Under Article 226/227 Permissible Only If Arbitral Tribunal's Order Is Patently Perverse : Supreme Court Case Title: SEROSOFT SOLUTIONS PVT. LTD. VERSUS DEXTER CAPITAL ADVISORS PVT. LTD. Citation : 2025 LiveLaw (SC) 14 The Supreme Court today criticized the High Court's intervention under its Writ Jurisdiction in the Arbitral Proceedings, where it had directed the Arbitral Tribunal to grant additional time for one party to cross-examine another, despite the Tribunal already having provided ample time for cross-examination. Setting aside the High Court's decision, the bench comprising Justices PS Narasimha and Manoj Misra observed that the High Court can interfere with the impugned order under its Writ Jurisdiction only in exceptional circumstances when the impugned order suffers from perversity. “It is evident from the above that even as per the quote hereinabove interference under Article 226/227 is 'permissible only if the order is completely perverse i.e. that the perversity must stare in the face.”, the court said. Observing that the High Court failed to point out any perversity in the tribunal's order, the judgment authored by Justice Narasimha deprecated the practice of interfering with the arbitral process when full opportunity was granted to the parties to present their case in the proceedings governed under Section 18 of the Arbitration & Conciliation Act, 1996 (“1996 Act”). Supreme Court Sets Aside Awards Of Over Rs 46 Lakhs Passed Against UP Govt In Sham Arbitration Proceedings Case Details : STATE OF UTTAR PRADESH AND ANOTHER VERSUS R.K. PANDEY AND ANOTHER | CIVIL APPEAL NO. 10212 OF 2014 Citation : 2025 LiveLaw (SC) 45 The Supreme Court on Thursday (January 9) 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. The bench of CJI Sanjiv Khanna and Justice Sanjay Kumar was hearing an appeal by the State of Uttar Pradesh challenging the veracity of the ex parte awards and the arbitration agreement relied by the respondent on the basis of which such arbitration proceedings were conducted. The Court observed : "It was not the case of Respondent No. 1, R.K. Pandey that the Municipal and Development Board, Kanpur, or the Governor of Uttar Pradesh has invoked the arbitration clause. The unilateral appointment of the arbitrator by Respondent No. 1, R.K. Pandey is, therefore, contrary to the arbitration clause as propounded by him." The Court placed reliance on the recent decision in Central Organisation of Railway Electrification v. ECI PIC SMO MCPL (JV), a Joint Venture Company which held that a clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral clause is exclusive and hinders equal participation of the parties in the appointment process of arbitrators. Supreme Court Flags Stringent Limitation Provisions Curtailing Arbitration Appeal Remedies, Urges Parliament To Address Issue Case no. – My Preferred Transformation & Hospitality Pvt. Ltd. & Anr. v. M/S Faridabad Implements Pvt. Ltd. Citation : 2025 LiveLaw (SC) 49 The Supreme Court 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 and Conciliation Act, 1996 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. A bench of Justice PS Narasimha and Justice Pankaj Mithal dismissed an appeal filed by a company against a Delhi High Court judgment rejecting its challenge to an arbitral award as barred by limitation under Section 34. 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. Can HC Appoint Sole Arbitrator When Arbitration Clause Provides For Unilateral Appointment Of Arbitrator ? Supreme Court To Consider Case Detail : M/S R.S. CONSTRUCTION vs. BUILDING CONSTRUCTION DEPARTMENT SLP(C) No. 000979 - / 2025 The Supreme Court on Monday ( January 20) agreed to consider the issue of whether the High Court can appoint a sole arbitrator under the Arbitration and Conciliation Act 1996 if the arbitration agreement between parties provides for ...

Arbitration Monthly Digest: January 2025

Mohd Talha Hasan

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