Supreme Court Quarterly Digest 2026 - Arbitration and Conciliation Act

Arbitration Law - Supreme Court Quarterly Digest Jan - Mar, 2026

Arbitration (Proceedings Before the Courts) Rules, 2001 (Karnataka) – Rule 9(4) – Harmonious Construction with Section 9(2) – Held that while Rule 9(4) uses the term "initiated" and Section 9(2) uses "commenced," the terms must be read harmoniously - "Initiated" in Rule 9(4) must be understood as "commenced" within the meaning of Section 21 to prevent the strict timelines of the parent Act from being rendered otiose. [Relied on Sundaram Finance Ltd. v. NEPC India Ltd. (1999) 2 SCC 479; Milkfood Ltd. v. GMC Ice Cream (P) Ltd. (2004) 7 SCC 288; Geo Miller and Company Private Limited v. Chairman, Rajasthan Vidyut Utpadan Nigam Limited (2020) 14 SCC 643; Arif Azim Company Limited v. Aptech Limited (2024) 5 SCC 313; Para 29] Regenta Hotels v. Hotel Grand Centre Point, 2026 LiveLaw (SC) 21 : 2026 INSC 32

Arbitration Act, 1940 – Section 2(a) and Section 39 – Absence of Arbitration Agreement – Jurisdiction of State Government – The Supreme Court upheld the High Court's decision setting aside an arbitral award, holding that there was neither a valid arbitration agreement nor informed consent by the Municipal Council to resolve disputes through arbitration - Noted that Clause 22 of the contract, which provided for dispute referral to the Collector with subsequent appeals to the Divisional Commissioner and the State Government, constituted a departmental dispute-resolution mechanism and not an "arbitration agreement". Bharat Udyog Ltd. v. Ambernath Municipal Council, 2026 LiveLaw (SC) 291 : 2026 INSC 288

Arbitration and Conciliation (Amendment) Act, 2015 — Section 11(6A) — Paradigm Shift — The 2015 Amendment introduced Section 11(6A), which limited the Court's inquiry solely to the "existence" of an arbitration agreement, effectively overruling the Patel Engineering dictum for post-amendment cases – Noted for proceedings commenced prior to 23.10.2015, the broader judicial scrutiny and finality of the Section 11 order under the old regime continue to apply – Appeal allowed. [Relied on SBP & Co. v. Patel Engineering Ltd. & Anr. (2005) 8 SCC 618; Paras 22-32] Eminent Colonizers v. Rajasthan Housing Board, 2026 LiveLaw (SC) 109 : 2026 INSC 116

Arbitration and Conciliation Act, 1996; Part III — Sections 61, 73, and 74 — Challenge to Conciliation Award and Partition Deed — Order VII Rule 11 of CPC — Rejection of Plaint — The Supreme Court set aside the rejection of a suit challenging a partition deed (KBPP) and a subsequent Conciliation Award - held that the Jegatheesan group's challenge based on coercion, undue influence, and misrepresentation regarding the KBPP, and the allegation of fraud/fabrication regarding the Conciliation Award, disclosed a real cause of action that could not be summarily dismissed – Noted that while an execution proceeding under Section 36 is pending, an Execution Court cannot examine the validity of a partition deed or family arrangement; such challenges must be resolved through a properly instituted civil suit. J. Muthurajan & Anr. v. S. Vaikundarajan, 2026 LiveLaw (SC) 135 : 2026 INSC 139

Arbitration and Conciliation Act, 1996; Section 11(6-A) — Appointment of Arbitrators — Scope of Judicial Review — The Supreme Court or High Court, while considering a Section 11 application, must strictly confine its examination to the existence of an arbitration agreement - The use of the word "examination" indicates a limit to the court's jurisdiction, intended for a prima facie determination rather than a "laborious or contested inquiry" - Noted that Section 11(6-A) continues to remain in full force as its omission (by the 2019 Amendment) has not yet been notified. [Paras 14–17] Motilal Oswal Financial Services v. Santosh Cordeiro, 2026 LiveLaw (SC) 32 : 2026 INSC 5 : (2026) 2 SCC 801

Arbitration and Conciliation Act, 1996; Section 12(5) and Seventh Schedule – Ineligibility of Arbitrator – Unilateral Appointment – The principle of equal treatment of parties under Section 18 applies not only to arbitral proceedings but also to the procedure for appointment of arbitrators - Equal treatment entails that parties must have an equal say in the constitution of the arbitral tribunal - Any person whose relationship with the parties, counsel, or the dispute falls within the Seventh Schedule is ineligible to be appointed as an arbitrator by operation of law – Held a person who is statutorily ineligible to act as an arbitrator cannot nominate or appoint another person as an arbitrator - A unilateral appointment by one party, where that party has exclusive power to appoint a sole arbitrator, violates the principle of impartiality and neutrality. Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, 2026 LiveLaw (SC) 4 : 2026 INSC 6

Arbitration and Conciliation Act, 1996; Section 12(5) Proviso – Waiver of Ineligibility – “Express Agreement in Writing” – Held that the ineligibility of an arbitrator under Section 12(5) can only be waived by an "express agreement in writing" entered into by the parties subsequent to the disputes having arisen – Supreme Court laid down Parameters of Waiver- i. Mere participation in proceedings, filing a Statement of Claim, requesting an extension of time under Section 29A, or failing to object in the first procedural order does not constitute an "express agreement in writing" ii. Recording "No Objection": A procedural order recording that parties have "no objection" to the appointment is insufficient to satisfy the requirement of a conscious, written waiver under the proviso to Section 12(5). Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, 2026 LiveLaw (SC) 4 : 2026 INSC 6

Arbitration and Conciliation Act, 1996; Section 15(2), 15(3), and 15(4) — Substitution of Arbitrator — Validity of prior proceedings — The Supreme Court held that while appointing a substitute arbitrator under Section 15(2), the High Court cannot declare proceedings undertaken by the previous tribunal as a "nullity" on the grounds of an IBC moratorium - Held that Section 15 is a mechanism to preserve continuity; prior proceedings remain valid unless the parties agree otherwise or the substitute tribunal, in its discretion, decides to repeat hearings. Ankhim Holdings Pvt. Ltd. v. Zaveri Construction Pvt. Ltd., 2026 LiveLaw (SC) 133 : 2026 INSC 137 : AIR 2026 SC 1042

Arbitration and Conciliation Act, 1996; Section 16 & 23 - Jurisdiction to decide disputes not specifically mentioned in invocation notice - Unless the arbitration agreement specifically restricts the tribunal to only decided "specifically referred disputes," the claimant is entitled to add or amend claims in the statement of claim, and the respondent is entitled to file counter-claims, provided they are arbitrable and within limitation - Where an arbitration clause is widely worded to cover "any matter arising out of or connected with the agreement," the tribunal has jurisdiction to entertain all such disputes once constituted. Bhagheeratha Engineering Ltd. v. State of Kerala, 2026 LiveLaw (SC) 31 : 2026 INSC 4

Arbitration and Conciliation Act, 1996; Section 16 — Doctrine of Competence-Competence — Arbitrability of Disputes — The determination of the substantive existence and validity of an arbitration agreement, as well as the arbitrability of the dispute, is the domain of the Arbitral Tribunal under Section 16 - The Referral Court is not the appropriate forum to conduct a "mini-trial" regarding the validity of the agreement. [Paras 15–16] Motilal Oswal Financial Services v. Santosh Cordeiro, 2026 LiveLaw (SC) 32 : 2026 INSC 5 : (2026) 2 SCC 801

Arbitration and Conciliation Act, 1996; Section 2(1)(e), Section 11, and Section 29A — Jurisdiction to extend the mandate of an Arbitral Tribunal — Held that the expression "Court" used in Section 29A for the extension of time or substitution of arbitrators refers strictly to the Court as defined under Section 2(1)(e) of the Act - This definition encompasses the Principal Civil Court of original jurisdiction in a district and includes a High Court only if it exercises ordinary original civil jurisdiction - The Supreme Court or High Courts exercising power under Section 11 to appoint an arbitrator do not retain supervisory control and become functus officio once the appointment is made. Jagdeep Chowgule v. Sheela Chowgule, 2026 LiveLaw (SC) 89 : 2026 INSC 92 : AIR 2026 SC 666

Arbitration and Conciliation Act, 1996; Section 21 & 23 - Object of Section 21 Notice - The object of Section 21 is primarily to determine the commencement of arbitral proceedings for reckoning limitation - It is a procedural rather than a jurisdictional requirement. Failure to issue a Section 21 notice is not fatal to a party's claim if the dispute is otherwise arbitrable and covered by the arbitration agreement - The claims raised in a Section 21 notice do not restrict or limit the claims that can be subsequently raised before the Arbitral Tribunal in the statement of claim under Section 23 - held that an arbitral tribunal cannot decide disputes beyond a specific issue referred to it and that a party cannot raise additional disputes without issuing a separate notice under Section 21 of the Arbitration and Conciliation Act, 1996. Bhagheeratha Engineering Ltd. v. State of Kerala, 2026 LiveLaw (SC) 31 : 2026 INSC 4

Arbitration and Conciliation Act, 1996; Section 29A(4) & 29A(5) - Power of Court to extend mandate after rendering of award – The Supreme Court held that an application for extension of the arbitrator's mandate under Section 29A(5) is maintainable even if it is filed after the expiry of the statutory period (12 months plus optional 6 months) and even after the award has been rendered in the interim - Noted that an award passed after the mandate has expired is unenforceable under Section 36 and "non est," but the arbitrator's indiscretion in passing such an award does not denude or impair the Court's jurisdiction to entertain an extension application. C. Velusamy v. K. Indhera, 2026 LiveLaw (SC) 105 : 2026 INSC 112

Arbitration and Conciliation Act, 1996; Section 29A(4) and Section 29A(6) — Extension of Mandate and Substitution of Arbitrator — The Supreme Court clarified that the expression "obligates" used in the Mohan Lal Fatehpuria case regarding the substitution of an arbitrator does not mean that substitution is an inevitable consequence when considering an extension of a mandate that has already expired - Substitution is only required "if the situation so warranted" and is not a mandatory inference following the termination of a mandate under Section 29A(4). Viva Highways Ltd. v. Madhya Pradesh Road Development Corporation Ltd; 2026 LiveLaw (SC) 145

Arbitration and Conciliation Act, 1996; Section 29A and Section 11 — Jurisdiction — held that Section 11 has no bearing on the provisions of Chapters 5 and 6 (where Section 29A is located) - Noted, an application for extension of time under Section 29A(4) does not lie before the High Court. Viva Highways Ltd. v. Madhya Pradesh Road Development Corporation Ltd; 2026 LiveLaw (SC) 145

Arbitration and Conciliation Act, 1996; Section 29A vs. Section 11 — Separation of Appointment and Supervision — Held that the power of appointment under Section 11 is a "special and limited" jurisdiction - It is a misconception to assume a hierarchy where only the appointing Court can extend the mandate - The extension of a mandate or substitution under Section 29A is a measure of curial supervision, not an "appointment" under Section 11 – Held that applications for extending an arbitral tribunal's mandate under Section 29A (4) of the Arbitration & Conciliation Act, 1996 must be filed exclusively before the 'Court' as defined in Section 2(1)(e) i.e., the principal civil court of original jurisdiction, regardless of which authority appointed the arbitrators - Interpretations based on a perceived "conflict of power" or "hierarchical difficulties" between a Civil Court and a High Court are untenable and opposed to the rule of law. Jagdeep Chowgule v. Sheela Chowgule, 2026 LiveLaw (SC) 89 : 2026 INSC 92 : AIR 2026 SC 666

Arbitration and Conciliation Act, 1996; Section 31(7)(a) and 31(7)(b) — General Conditions of Contract (GCC); Clause 16(3) and 64(5) — Pre-award/Pendente lite Interest — Post-award Interest — The Arbitral Tribunal cannot award pre-award or pendente lite interest, even in the form of "compensation," if the contract expressly prohibits interest on amounts payable to the contractor - a contractual bar on pre-award interest does not automatically extend to post-award interest - Post-award interest is a statutory mandate under Section 31(7)(b) and is not subject to "contracting out" by parties unless the exclusion is explicit and unambiguous - The Court retains the power to modify the rate of post-award interest if it is deemed excessive or lacks justification - Key Findings and Relied-on Decisions: i. Contractual Supremacy in Pre-award Interest: Under Section 31(7)(a), the arbitrator's power to award pre-award interest is subordinate to the terms of the agreement. If a contract (like Clause 16(3) of the GCC) bars interest on "amounts payable to the contractor," the arbitrator lacks jurisdiction to grant it. Ii. Rejection of Ejusdem Generis: The phrase "amounts payable to the contractor under the contract" in Clause 16(3) is independent and distinct from "earnest money" or "security deposits." It cannot be read down to only include deposits; iii. Statutory Mandate of Post-award Interest: Section 31(7)(b) is not subject to party autonomy. The expression "unless the award otherwise directs" refers to the rate of interest, not the entitlement to it; iv. Power to Modify Interest Rate: Courts can modify post-award interest rates to avoid excessive financial burdens and ensure "just compensation" based on contemporary economic scenarios – Appeal partly allowed. [Relied on Union of India v. Manraj Enterprises (2022) 2 SCC 331; RP Garg v. Chief General Manager, Telecom Department 2024 SCC OnLine SC 2928; Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited (2025) 7 SCC 1; Union of India v. Bright Power Projects (India) (P) Limited (2015) 9 SCC 695; Union of India v. Manraj Enterprises (2022) 2 SCC 331; Paras 30-60] Union of India v. Larsen & Tubro, 2026 LiveLaw (SC) 214 : 2026 INSC 203

Arbitration and Conciliation Act, 1996; Section 42 — Inapplicability to Section 11 — Section 42, which mandates that subsequent applications be filed in the same Court where the first application was made, does not apply to Section 11 applications - The Chief Justice or their delegate exercising power under Section 11 is not a "Court" as defined by Section 2(1)(e); therefore, a Section 11 application does not fix the jurisdiction for Section 29A applications – Appeals allowed. [Relied on SBP and Co. v. Patel Engineering Ltd. (2005) 8 SCC 618; State of West Bengal v. Associated Contractors (2015) 1 SCC 32; State of Jharkhand v. Hindustan Construction Co. Ltd. (2018) 2 SCC 602; Chief Engineer (NH) PWD (Roads) v. BSC&C and C JV 2024 SCC OnLine SC 1801; Paras 15-26] Jagdeep Chowgule v. Sheela Chowgule, 2026 LiveLaw (SC) 89 : 2026 INSC 92 : AIR 2026 SC 666

Arbitration and Conciliation Act, 1996; Section 5 and Section 15 — Scope of Judicial Interference — Supreme Court clarified that the jurisdiction under Section 15(2) is limited and must be read with the principle of minimal judicial intervention - A court acting under Section 15(2) cannot exercise powers barred to it under other sections, such as setting aside a Section 16 rejection order (which is not appealable) or interfering with Section 17 orders outside of a Section 37 proceeding. Ankhim Holdings Pvt. Ltd. v. Zaveri Construction Pvt. Ltd., 2026 LiveLaw (SC) 133 : 2026 INSC 137 : AIR 2026 SC 1042

Arbitration and Conciliation Act, 1996; Sections 14 and 34 – Challenge to Jurisdiction – Stage of Objection – Constitution of India; Article 14 – Public-Private Contracts - Held that an arbitrator falling under the Seventh Schedule becomes de jure unable to perform his functions, and his mandate terminates automatically - An objection to the inherent lack of jurisdiction due to such ineligibility can be raised at any stage, including for the first time in an application under Section 34 for setting aside the award – Held that unilateral appointment clauses in public-private contracts violate Article 14 for being arbitrary and failing to provide the minimum level of integrity required for quasi-judicial functions - Such clauses also violate the nemo judex rule, which constitutes a part of the fundamental policy of Indian law – Appeals allowed. [Relied on TRF Ltd. v. Energo Engineering Projects Ltd. (2017) 8 SCC 377; Perkins Eastman Architects DPC v. HSCC (India) Ltd. (2020) 20 SCC 760; Bharat Broadband Network Ltd. v. United Telecoms Ltd. (2019) 5 SCC 755; Dharma Prathishthanam v. Madhok Construction (P) Ltd. (2005) 9 SCC 686; Paras 55-107] Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, 2026 LiveLaw (SC) 4 : 2026 INSC 6

Arbitration and Conciliation Act, 1996; Sections 8 and 11 — Arbitrability and Allegations of Fraud — Whether disputes can be referred to arbitration when the very existence of the arbitration agreement is seriously disputed on allegations of forgery and fabrication — Held: When allegations of fraud are made regarding the arbitration agreement itself, the dispute is generally recognized as non-arbitrable - Arbitration is founded upon consent, and a party can only be bound if it is shown, at least prima facie, that they agreed to the process - Where an arbitration clause is embedded in a document (such as the "Admission Deed") whose existence is stoutly denied and alleged to be forged, the controversy strikes at the root of arbitral jurisdiction – Noted that in such cases, the court must examine the issue as a jurisdictional inquiry rather than referring the matter to an arbitrator - While findings in Section 9 proceedings are prima facie, once they attain finality (e.g., via dismissal of an SLP), they cannot be ignored in subsequent proceedings under Sections 8 and 11 involving the same issue. Rajia Begum v. Barnali Mukherjee, 2026 LiveLaw (SC) 101 : 2026 INSC 106

Arbitration and Conciliation Act, 1996 — Interpretation of Contracts — Arbitral Autonomy — Patent Illegality — Section 34(2A) - held that the interpretation of the terms of a contract is primarily the domain of the Arbitral Tribunal - Even if a second view is possible, an award cannot be set aside merely because the appellate court prefers an alternative interpretation – Held that the Tribunal's decision to award idling charges for a Backhoe Dredger (BHD) under Clause 51.1 of the License Agreement despite the respondent's claim that Clause 38 only specified charges for "major dredgers" was found to be a logical and reasonable construction of the agreement - For an award to be set aside for patent illegality, the error must be apparent on the face of the award - A speaking award based on logical reasoning and proper interpretation of clauses does not suffer from patent illegality - a mere contravention of substantive Indian law is no longer a standalone ground for setting aside an award – Appeal allowed. [Relied on MMTC Limited vs. Vedanta Limited (2019) 4 SCC 163; UHL Power Company Limited vs. State of Himachal Pradesh (2022) 4 SCC 116; Bombay Slum Redevelopment Corporation Private Limited vs. Samir Narain Bhojwani (2024) 7 SCC 218; National Highways Authority of India v. M/s Hindustan Construction Company Ltd. 2024 INSC 388; Larsen Air Conditioning and Refrigeration Company vs. Union of India & Ors. (2023) 15 SCC 472; Paras 30-46] Jan De Nul Dredging India Pvt. Ltd. v. Tuticorin Port Trust, 2026 LiveLaw (SC) 47 : 2026 INSC 34 : AIR 2026 SC 536

Arbitration and Conciliation Act, 1996 — Section 11, Section 16, and Section 34 — Pre-2015 Amendment Regime — Binding Nature of Section 11 Order — Res Judicata — Held that in cases governed by the SBP & Co. v. Patel Engineering Ltd. regime (prior to the 23.10.2015 amendments), the Section 11 Court exercised judicial power to determine the existence and validity of an arbitration agreement - Such a determination, even if implied, is binding on the parties at all subsequent stages, including before the Arbitral Tribunal and the Section 34 Court – Noted that the respondents, having failed to challenge the appointment order in the Supreme Court, cannot subsequently argue that the clause (Clause 23) was not an arbitration agreement. Eminent Colonizers v. Rajasthan Housing Board, 2026 LiveLaw (SC) 109 : 2026 INSC 116

Arbitration and Conciliation Act, 1996 – Section 16, Section 4, and Section 34 – Appointment of Presiding Arbitrator – Improper Constitution of Tribunal – Waiver and Conduct – The Appellant challenged the arbitral award on the ground that the Presiding Arbitrator was appointed by the two nominee arbitrators beyond the 30-day period prescribed in Clause 8.3(b) of the Agreement - The Appellant contended that after 30 days, the power of the nominee arbitrators was extinguished, and only the Secretary General of ICSID could make the appointment - Held: Clause 8.3(b) is an enabling provision, not a restrictive one - It provides a "fail-safe" by permitting parties to approach ICSID if the nominee arbitrators reach an impasse, but it does not denude the nominee arbitrators of their power to appoint after the 30-day period unless a request is actually made to ICSID - Since neither party approached ICSID, the appointment by the nominee arbitrators was valid. [Paras 30-34] Municipal Corporation of Greater Mumbai v. R.V. Anderson Associates, 2026 LiveLaw (SC) 235 : 2026 INSC 228

Arbitration and Conciliation Act, 1996 – Section 21 – Interpretation of "Commencement" – Supreme Court emphasized that the commencement of arbitral proceedings is a statutory event defined exclusively under Section 21 - This definition is not limited to calculating limitation under Section 43 but applies to all provisions of the Act unless specifically excluded - The legislature deliberately delinked commencement from judicial proceedings to ensure clarity and party autonomy. [Paras 24, 28, 29] Regenta Hotels v. Hotel Grand Centre Point, 2026 LiveLaw (SC) 21 : 2026 INSC 32

Arbitration and Conciliation Act, 1996 – Section 34 & Section 37 – Scope of Judicial Review – Modification of Arbitral Awards – Power to Modify – The Supreme Court upheld the power of a Court under Section 34 to modify an arbitral award to a limited extent, particularly when applying contractually agreed clauses to admitted facts – Noted that a Section 37 Court cannot substitute its own view for a plausible view taken by a Section 34 Court regarding the determination of "reasonable compensation" unless that determination is arbitrary or perverse. Saisudhir Energy Ltd. v. NTPC Vidyut Vyapar Nigam Ltd., 2026 LiveLaw (SC) 112 : 2026 INSC 103

Arbitration and Conciliation Act, 1996 — Section 34 and Section 37 — Scope of Appellate Interference — The Supreme Court reiterated that the jurisdiction of an appellate court under Section 37 is extremely circumscribed and akin to the limited jurisdiction under Section 34 - An appellate court cannot undertake an independent assessment of the merits of the award or reappraise evidence as if it were an ordinary court of appeal - Its primary role is to ascertain whether the court exercising power under Section 34 acted within its prescribed limits or exceeded them - If an Arbitral Tribunal's interpretation of a contract is a "plausible view" and is upheld under Section 34, the Section 37 court has no authority to substitute it with a different interpretation. Jan De Nul Dredging India Pvt. Ltd. v. Tuticorin Port Trust, 2026 LiveLaw (SC) 47 : 2026 INSC 34 : AIR 2026 SC 536

Arbitration and Conciliation Act, 1996 – Section 36 – Code of Civil Procedure, 1908 – Order XXI Rule 58 and Rule 102 – Execution of Arbitral Award – Transferee Pendente Lite – The Supreme Court upheld the dismissal of a claim petition filed by a third-party purchaser who acquired property after an arbitral award (money decree) was passed against the vendor – held that an arbitral award is a "deemed decree" enforceable under Section 36 of the 1996 Act - Under Order XXI Rule 102 CPC, the protections for bona fide claimants do not extend to a transferee pendente lite—defined as one to whom property is transferred after the institution of the suit/proceeding. R. Savithri Naidu v. Cotton Corporation of India, 2026 LiveLaw (SC) 151 : 2026 INSC 150 : AIR 2026 SC 913

Arbitration and Conciliation Act, 1996 – Section 4 and Section 16(2) – Timelines for Objection vs. Past Conduct – Held that while an objection under Section 16(2) raised before the statement of defence is technically "timely" to prevent statutory waiver under Section 4, the prior conduct and acquiescence of the party remain relevant in adjudicating the merits of the jurisdictional challenge - A party cannot participate in the process, allow multiple appointments of presiding arbitrators without protest, and then "keep a jurisdictional ace up their sleeve" to challenge the final constitution - Supreme Court must respect arbitral autonomy and ensure minimum judicial interference - If the arbitrator's interpretation of a contractual clause is a plausible view, the Court cannot substitute it with another view merely because it is possible – Appeal dismissed. [Relied on Hindustan Construction Co. Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. (2025 SCC OnLine SC 2578; Consolidated Construction Consortium Limited v. Software Technology Parks of India (2025 INSC 574); Paras 36, 40-45, 51-54, 61, 66, 67] Municipal Corporation of Greater Mumbai v. R.V. Anderson Associates, 2026 LiveLaw (SC) 235 : 2026 INSC 228

Arbitration and Conciliation Act, 1996 — Section 73 — Authentication of Settlement — A settlement agreement (KBPP) not authenticated by the Conciliator as mandated under Section 73(4) and not signed by the parties at the time of the alleged award (Annexure P-2) raises serious questions regarding its status as an award under the Act – noted that coercion within a family context may not always involve physical threats or "life threats"- It can arise from a feeling of subservience or manifest obedience to an elder's opinion, which are matters of evidence and cannot be peremptorily rejected at the threshold of a suit - The plea of constructive res judicata is not applicable when earlier rounds of litigation specifically reserved liberty for the parties to work out their remedies in accordance with law and challenge the partition deed in a Civil Court. [Relied on Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra) D. Thr. LRs and Ors. (2020) 7 SCC 366; Paras 23-31] J. Muthurajan & Anr. v. S. Vaikundarajan, 2026 LiveLaw (SC) 135 : 2026 INSC 139

Arbitration and Conciliation Act, 1996 – Section 9(2) and Section 21 – Commencement of Arbitral Proceedings – Automatic Vacation of Interim Relief – The Supreme Court held that for the purposes of Section 9(2), arbitral proceedings "commence" on the date the respondent receives a request for the dispute to be referred to arbitration, as defined under Section 21 - set aside the High Court's finding that proceedings only commence upon the filing of a Section 11 petition - If a notice invoking arbitration is received by the respondent within 90 days of an interim order, the mandate of Section 9(2) is satisfied, and the interim relief does not stand automatically vacated under Rule 9(4) of the Arbitration (Proceedings Before the Courts) Rules, 2001. [Paras 23, 24, 31] Regenta Hotels v. Hotel Grand Centre Point, 2026 LiveLaw (SC) 21 : 2026 INSC 32

Arbitration and Conciliation Act, 1996 - Supreme Court drew the following conclusions: i. The principle of equal treatment of parties provided in Section 18 of the Act, 1996, applies not only to the arbitral proceedings but also to the procedure for appointment of arbitrators - Equal treatment of the parties entails that the parties must have an equal say in the constitution of the arbitral tribunal; ii. Sub-section (5) of Section 12 provides that any person whose relationship with the parties or counsel, or the dispute, whether direct or indirect, falls within any of the categories specified in the Seventh Schedule would be ineligible to be appointed as an arbitrator - Since, the ineligibility stems from the operation of law, not only is a person having an interest in the dispute or its outcome ineligible to act as an arbitrator, but appointment by such a person would be ex facie invalid; iii. The words “an express agreement in writing” in the proviso to Section 12(5) means that the right to object to the appointment of an ineligible arbitrator cannot be taken away by mere implication - The agreement referred to in the proviso must be a clear, unequivocal written agreement; iv. When an arbitrator is found to be ineligible by virtue of Section 12(5) read with the Seventh Schedule, his mandate is automatically terminated - In such circumstance, an aggrieved party may approach the court under Section 14 read with Section 15 for appointment of a substitute arbitrator - when an award has been passed by such an arbitrator, an aggrieved party may approach the court under Section 34 for setting aside the award; v. In arbitration, the parties vest jurisdiction in the tribunal by exercising their consent in furtherance of a valid arbitration agreement - An arbitrator who lacks jurisdiction cannot make an award on the merits - an objection to the inherent lack of jurisdiction can be taken at any stage of the proceedings. Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, 2026 LiveLaw (SC) 4 : 2026 INSC 6

Arbitration – Jurisdiction – Excepted Matters – Rule of Law – Section 28 of the Indian Contract Act, 1872 – Section 9 of the Code of Civil Procedure, 1908 – The Supreme Court held that one party to a contract cannot be the sole arbiter to decide whether the other party committed a breach when liability is disputed. Such an interpretation violates the fundamental principle that no party shall be a judge in its own cause - Supreme Court clarified that while certain matters may be "excepted" from arbitration, they cannot be "excluded" from judicial remedy entirely, as a vacuum in legal remedies is opposed to the Rule of Law. ABS Marine Services v. Andaman and Nicobar Administration, 2026 LiveLaw (SC) 287 : 2026 INSC 274

Arbitration — Setting aside of Award — Patent Illegality and Public Policy — Interpretation of Contract: The Supreme Court affirmed that the construction and interpretation of contractual terms are primarily within the jurisdiction of the arbitral tribunal - If an arbitrator adopts one of two plausible interpretations, the court cannot substitute its own view merely because an alternative view is possible - An award is not "patently illegal" or against "public policy" simply because of a mere contravention of law; it must violate fundamental principles of justice. [Paras 26, 29, 33, 59] National Highways Authority of India v. Gammon Atlanta (JV), 2026 LiveLaw (SC) 71 : 2026 INSC 76

Constitution of India; Article 227 — Supervisory Jurisdiction — The jurisdiction under Article 227 is not an appellate jurisdiction in disguise and does not permit the reappreciation of evidence – Held that the High Court was not justified in dislodging concurrent findings of the Trial Court and First Appellate Court to refer a dispute to arbitration when the existence of the agreement was under serious doubt. [Relied on: Managing Director Bihar State Food and Civil Supply Corporation Limited v. Sanjay Kumar, (2025) SCC OnLine SC 1604; Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings (Mauritius) Ltd., (2021) 4 SCC 713; Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710; A. Ayyasamy v. A. Paramasivam & Others, (2016) 10 SCC 386; Paras 16- 23] Rajia Begum v. Barnali Mukherjee, 2026 LiveLaw (SC) 101 : 2026 INSC 106

Constitution of India – Article 142 – Restoration of Withdrawn Petitions – National Highways Act, 1956 – Sections 3G and 3J – Arbitration and Conciliation Act, 1996 – Section 34 – The Supreme Court invoked its extraordinary powers under Article 142 to set aside an order of the Trial Court, which had allowed land owners to withdraw their Section 34 petitions following a High Court judgment declaring Sections 3G and 3J of the National Highways Act unconstitutional - noted that since the High Court's judgment was subsequently stayed, the land owners were left "remediless" as fresh petitions would be barred by limitation under Section 34(3) of the 1996 Act - Supreme Court has raised concerns over the deep structural flaws in determining the land acquisition compensation acquired under the National Highways Act, 1956. The Court said that land owners whose lands were acquired under the 1956 Act faces significant disadvantage when compared to land owners whose lands were acquired under different laws. [Para 1-3] Riar Builders Pvt. Ltd. v. Union of India, 2026 LiveLaw (SC) 65

Contract Law; Procedural Prerequisites and Waiver - A party at fault cannot be permitted to set up a bar of non-performance of prerequisite obligations to exclude the operation of an arbitration clause - If a party's conduct such as failing to adhere to strict timelines for Engineer decisions or Adjudicator recommendations disables preceding steps, those procedural prerequisites are deemed waived. [Relied on M.K. Shah Engineers & Contractors vs. State of M.P. (1999) 2 SCC 59; ASF Buildtech Private Limited vs. Shapoorji Pallonji & Company Private Limited (2025) 9 SCC 76; State of Goa v. Praveen Enterprises (2012) 12 SCC 581; Paras 16-20] Bhagheeratha Engineering Ltd. v. State of Kerala, 2026 LiveLaw (SC) 31 : 2026 INSC 4

Contractual Interpretation – Harmonious Construction – Clauses 3.20 and 3.22 – Supreme Court noted that a widely worded arbitration clause (Clause 3.22) must be read in conjunction with restrictive default clauses (Clause 3.20) - Clause 3.20, which accorded finality to the Administration's decision and barred legal proceedings, was interpreted to apply only where liability is admitted and only the quantification is at issue - Where liability is disputed, the matter falls within the ambit of the arbitration clause. [Relied on State of Karnataka v. Shree Rameshwara Rice Mills Thirthahalli, (1987) 2 SCC 160; J.G. Engineers Private Limited v. Union of India, (2011) 5 SCC 758; Sri Vedagiri Lakshmi Narasimha Swami Temple v. Induru Pattabhirami Reddi, 1966 SCC OnLine SC 243; Paras 25-38] ABS Marine Services v. Andaman and Nicobar Administration, 2026 LiveLaw (SC) 287 : 2026 INSC 274

Distinction Between Precedent and Res Judicata — Section 11(7) — Held that while a "precedent" operates in rem and serves as a source of law for other parties, "res judicata" operates in personam between the same parties to ensure finality in litigation - Even if other benches of a High Court interpreted an identical clause differently in separate litigations (precedent), the specific order appointing the arbitrator between the current parties constitutes res judicata regarding the existence of the arbitration agreement - The correctness of the initial decision is immaterial unless it relates to a lack of inherent jurisdiction. Eminent Colonizers v. Rajasthan Housing Board, 2026 LiveLaw (SC) 109 : 2026 INSC 116

Estoppel and Participation – Jurisdictional Nullity – Participation in arbitral proceedings does not confer jurisdiction where an arbitration agreement is inherently absent. Since the arbitrator lacked inherent jurisdiction, the proceedings were a nullity (coram non judice) and the award was non-est - The Municipal Council was not estopped from challenging the award as it was "forced" into arbitration without consent while functioning under a State-appointed Administrator - Supreme Court rejected the application of these precedents, affirming the High Court's finding that there is no acquiescence or estoppel where a party is compelled to participate in proceedings that are a jurisdictional nullity. [Relied on N. Chellappan v. Secretary, Kerala State Electricity Board and Anr. (1975) 1 SCC 289; Inder Sain Mittal v. Housing Board, Haryana and Ors. (2002) 3 SCC 175; Paras 19-26] Bharat Udyog Ltd. v. Ambernath Municipal Council, 2026 LiveLaw (SC) 291 : 2026 INSC 288

Insolvency and Bankruptcy Code, 2016; Section 31(1) — Arbitral Proceedings — Counterclaim vs. Set-off — 'Clean Slate' Principle — Whether a respondent can raise a plea of set-off in arbitration proceedings after the approval of a Resolution Plan, even if its counterclaim was not part of the plan and stands extinguished - Held, that once a Resolution Plan is approved under Section 31(1) of the IBC, all claims not included in the plan stand extinguished - a respondent cannot seek any affirmative relief through a counterclaim that was not part of the approved plan - if the specific terms of the Resolution Plan only bar payments or settlements and do not expressly or impliedly exclude the plea of set-off as a defense, such a plea can be raised to defend against the appellant's claim - The plea of set-off is permitted only as a defensive tool to prevent the appellant from succeeding entirely or in part - If the amount due to the respondent exceeds the amount awarded to the appellant, the surplus is not recoverable. If the appellant's proceedings are withdrawn, the counterclaim/set-off defense fails. [Relied on Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. (2021) 9 SCC 657; Bharti Airtel Ltd. v. Aircel Ltd. & Dishnet Wireless Ltd. (Resolution Professional) (2024) 4 SCC 668; Paras 21-27] Ujaas Energy Ltd. v. West Bengal Power Development Corporation Ltd., 2026 LiveLaw (SC) 272 : 2026 INSC 268

Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 (Maharashtra) – Section 143-A(3) – The State Government lacks the authority under Section 143-A(3) to unilaterally "foist" arbitration on parties governed by a concluded contract - The power of the State to issue directions under this section is limited to regulating the manner and procedure of octroi collection and does not extend to appointing an arbitrator for the Municipal Council and its agent. Bharat Udyog Ltd. v. Ambernath Municipal Council, 2026 LiveLaw (SC) 291 : 2026 INSC 288

Presidency Small Cause Courts Act, 1882; Section 41 — Non-arbitrability and Public Policy — Merely because a statute (like Section 41 of the 1882 Act) confers exclusive jurisdiction on a specific court for certain types of disputes (licensor-licensee/landlord-tenant), it does not ex proprio vigore (by its own force) neutralize arbitration clauses in private agreements. The Court distinguished the present case - where possession had already been handed over and the dispute was purely a monetary claim from cases requiring special statutory protection - Arbitration clauses find their roots in Section 28 of the Contract Act - Exceptions 1 and 2 to Section 28 expressly provide that a contract to refer disputes to arbitration is not rendered illegal or void as a restraint of legal proceedings – Appeal dismissed. [Relied on In re Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 & Stamp Act, 1899, (2024) 6 SCC 1; Paras 19–26] Motilal Oswal Financial Services v. Santosh Cordeiro, 2026 LiveLaw (SC) 32 : 2026 INSC 5 : (2026) 2 SCC 801