Supreme Court Weekly Digest [November 1 - 10, 2025]

Arbitral Award – Execution - Allegation of Fraud/Collusion (Fraud on Corporation) – Held, the maxim "fraud unravels everything" is acknowledged, an execution petition cannot be kept in abeyance based on mere allegations of fraud or collusion by the judgment-debtor's own officials, especially after the arbitral award has attained finality up to the Supreme Court. Entertaining such objections under Section 47, without a finding of fraud or even a prima facie case established, would be an abuse of process akin to a retrial, which is contrary to the object of Section 47. Courts must exercise great caution and circumspection before entertaining such allegations - Appeal dismissed. [Relied on Lazarus Estates Ltd. v. Beasley (1956) 1 All ER 341; Electrosteel Steel Limited v. ISPAT Carrier Private Limited 2025 LiveLaw SC 491; Para 34-35, 95-99] MMTC Ltd. v. Anglo American Metallurgical Coal Pvt. Ltd., 2025 LiveLaw (SC) 1060 : 2025 INSC 1279 Arbitration and Conciliation Act, 1996; Sections 34(2)(b)(ii), 34(2A), 28(3) - Arbitral Award - Setting Aside - Patent Illegality - Rewriting of Contract – Held, an Arbitral Tribunal, being a creature of contract, cannot unilaterally alter or rewrite the terms of the contract between the parties - An Arbitral Award that grants claims by rewriting the commercial contract, substituting the express terms of the agreement and binding policy directives of a statutory authority, is vitiated by patent illegality appearing on the face of the Award and is in conflict with the fundamental policy of Indian Law - Noted that Arbitrator's action of substituting the contractually agreed 'combo meal' tariff with the 'regular meal' tariff for the second meal of the day, and granting reimbursement for an item ('welcome drink') contrary to the policy directives binding on the caterers, amounts to creating a new contract for the parties and is violative of Section 28(3) of the Act, which mandates the Tribunal to take into account the terms of the contract - Appeal allowed. [Relied Ssangyong Engineering and Construction Company Limited v. National Highway Authority of India, (2019) 15 SCC 131; Industrial Promotion and Investment Corporation of Orissa Limited v. Turbo Furguson Steel Private Limited & Ors. 2012 2 SCC 261; Paras 64-72] Indian Railways Catering and Tourism v. Brandavan Food Products, 2025 LiveLaw (SC) 1076 : 2025 INSC 1294 Arbitration and Conciliation Act, 1996 - Section 34 & 36 - Code of Civil Procedure, 1908 (CPC) - Section 47 - Arbitral Award – Execution - Objection under Section 47 CPC - Plea of Nullity – Scope – Held, the plea of nullity against an Arbitral Award can be raised in a proceeding under Section 47 of the CPC during execution, as the Award is enforced under Section 36 of the A&C Act as if it were a decree of the Civil Court - Such a challenge lies within a very narrow compass, limited exclusively to the ground of jurisdictional infirmity or voidness - An Executing Court cannot go behind the decree - Objections regarding errors of fact and law are outside the scope of Section 47 - Objections to arbitral award execution maintainable only if decree is void or without jurisdiction. [Relied on Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman, (1970) 1 SCC 670; Paras 16-23] MMTC Ltd. v. Anglo American Metallurgical Coal Pvt. Ltd., 2025 LiveLaw (SC) 1060 : 2025 INSC 1279 Arbitration and Conciliation Act, 1996 - Section 7 & 11(6) – Validity of Arbitration Agreement – Interpretation of Dispute Resolution Clause - The Supreme Court examined whether a three-tier dispute resolution clause, which mandated negotiation, followed by "arbitration through senior management comprising respective Chairmen of the two parties (Arbitrators)" – Held, this is not a clause does not constitute a valid arbitration agreement - An arbitration agreement must contemplate an intention to refer disputes to a private tribunal for adjudication and a willingness to be bound by its decision - The words used must disclose a determination and obligation to go to arbitration, not merely contemplate the possibility - The decision of the private tribunal must be final and binding on the parties - Noted that the penultimate sentence of Clause 8.28, which stipulates that the complaining party shall seek remedies through the courts of law if the dispute is not resolved within fifteen (15) days after the proposed "arbitration," clearly indicates that the process was an attempt at amicable resolution inter se rather than a definitive submission to arbitration - Where an agreement provides that the decision will not be final and binding, or that an unsatisfied party may file a civil suit, it cannot be termed an arbitration agreement - The mere use of the word "arbitration" multiple times is not clinching or decisive - The A&C Act acknowledges the existence of an arbitration agreement based on its substance rather than its form, and...

Supreme Court Weekly Digest [November 1 - 10, 2025]

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