Arbitration Act: Important Judgments By Supreme Court In 2025

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 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 ReiteratesCase: 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 CourtCase: 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 CourtCase: 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 ActCase: M/s. C & C Constructions Ltd....

Arbitration Act: Important Judgments By Supreme Court In 2025

Debby Jain

Tags