Jharkhand High Court Pulls Up JSBC for Seeking Adjournment In Arbitration Matter Over Transfer of MD

The Jharkhand High Court recently pulled up Jharkhand State Beverages Corporation for seeking a second adjournment in an arbitration matter on the ground that its managing director had been transferred.

The court observed that the corporation was “bent upon delaying the matter.” It then appointed former Jharkhand High Court judge Justice N.N. Tiwari as sole arbitrator in its dispute with K.S. Multi Facility Services Private Limited.

Chief Justice M.S. Sonak observed that the corporation's reasons for seeking adjournment were unconvincing. He noted that an earlier adjournment had been granted subject to payment of Rs. 10,000 in costs.

“On the ground that the Managing Director is not available or is transferred, this is the second time that adjournment is applied for, even though, earlier adjournment was granted, subject to payment of cost of Rs. 10,000/-. Surprisingly, even the costs have not been paid. The transfer of the Managing Director can hardly be a ground for the respondent-Corporation not to pay the cost of Rs. 10,000/-. This is a matter where the respondent is bent upon delaying the matter.”, It noted.

The dispute arose under an agreement dated June 19, 2024 between K.S. Multi Facility Services and JSBC. K.S. Multi Facility had initially filed a writ petition in 2025. JSBC opposed it on the ground that the agreement contained an arbitration clause.

After the writ petition was withdrawn on September 19, 2025 with liberty to avail alternate remedies, the petitioner invoked arbitration through a legal notice dated October 4, 2025. However, JSBC neither replied to the notice nor consented to the appointment of an arbitrator.

Relying on the Supreme Court's Constitution Bench ruling in Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, In Re, the High Court said it only needed to prima facie examine whether an arbitration agreement existed at this stage. It left all objections open for the arbitral tribunal.