Supreme Court Refers Kinetic Green-Saera Exclusivity Dispute Over Vehicle Manufacturing To Arbitration

The Supreme Court on Thursday referred to arbitration as a dispute between Kinetic Green Energy and Power Solutions Limited and Saera Electric Auto Limited over contractual exclusivity and non-compete obligations.

A Division Bench comprising Justice Aravind Kumar and Justice Vipul M. Pancholi appointed former Supreme Court judge Justice R.V. Raveendran as the sole arbitrator.

“Having heard the learned counsels appearing for the parties, we are of the opinion that the constitution of an Arbitral Tribunal to adjudicate the disputes between the parties would be the appropriate course of action at this stage,” it said.

The dispute arose from three agreements executed on August 26, 2025, namely a Manufacturing Agreement, Supply and Distribution Agreement and Intellectual Property Agreement.

Under the Manufacturing Agreement, Saera was to exclusively manufacture vehicles for Kinetic Green according to agreed specifications. The agreement contained provisions on exclusivity and non-compete obligations and had a contractual term of 20 years.

A dispute arose over Saera's manufacture and sale of vehicles under its Mayuri brand, including Mayuri Rattan, and certain vehicles it proposed to introduce.

Kinetic Green claimed that the vehicles fell within the contractual exclusivity and non-compete obligations. Saera contended that its Mayuri vehicles were part of a pre-existing business, that the contractual definition of “Vehicles” was narrower than claimed, and that the commercial arrangement had not really commenced as no purchase order or substantial monetary consideration had passed between the parties.

Kinetic Green approached the Bengaluru Commercial Court under Section 9 of the Arbitration and Conciliation Act, 1996. On August 6, the court restrained Saera from taking steps towards the launch, manufacture, marketing, supply, distribution or sale of new vehicles or products similar to those contemplated under the Manufacturing Agreement.

It also restrained further manufacture, marketing, distribution and sale of existing Mayuri-branded auto-shaped electric three-wheelers, including Mayuri Rattan L5 Auto.

Saera challenged the order under Section 37. On August 20, the Karnataka High Court stayed the Commercial Court's order, observing that the joint venture had not “taken off”.

It nevertheless barred Saera from launching any new vehicle and directed it to maintain accounts of all “auto-shaped vehicles” manufactured by it.

The parties subsequently agreed before the Supreme Court to appoint Justice Raveendran as sole arbitrator and to seek interim relief under Section 17.

The Supreme Court modified the High Court's restraint against launching “any new vehicle” and instead barred Saera from launching or manufacturing vehicles described in Annexures A and B read with Clause 1.1 until orders are passed on the Section 17 application.

The arbitrator was directed to consider the application uninfluenced by observations in the earlier orders.

For Appellant (Kinetic Green Energy and Power Solutions Limited): Khaitan & C

For Respondent (Saera Electric Auto Limited): Advocate Ekansh Mishra (Caveator).