Mere Pendency Of Criminal Cases Alleging Simple Fraud No Bar To Arbitration : Supreme Court

The Supreme Court has allowed the arbitration proceedings to continue in multi-crore Bihar Public Distribution System (“PDS”) Scam, stating that mere pendency of the criminal proceedings in offences involving simple fraud like cheating, criminal breach of trust doesn't bar a dispute from being referred to an arbitration. “The mere fact that criminal proceedings can or have been instituted in respect of the same incident(s) would not per se lead to the conclusion that the dispute which is...

Disputes Arising Out Of 'Work Contract' With MP Govt Instrumentality Shall Be Referred To MP Arbitration Tribunal : Supreme Court

The Supreme Court today (July 30) reiterated that the disputes related to 'work contract' must be adjudicated exclusively by the Madhya Pradesh Arbitration Tribunal under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (“1983 Act”). Holding thus, the bench comprising Justices JB Pardiwala and R Mahadevan refused to interfere with the Madhya Pradesh High Court's ruling, which set aside the arbitration proceedings initiated by the Appellant, for settlement of the dispute arising out of...

Clause Saying Arbitration "May Be Sought" Doesn't Constitute A Binding Arbitration Agreement : Supreme Court

The Supreme Court recently held that a clause in an agreement that arbitration "may be sought" to resolve disputes between the parties will not constitute a binding arbitration agreement.Approving the refusal of the High Court to refer the parties to arbitartion, the Supreme Court observed that the phraseology of the clause did not indicate that the parties were bound to go for arbitration."...clause 13 does not bind parties to use arbitration for settlement of the disputes. Use of the words...

S. 11 SARFAESI Act | DRT Can't Decide Disputes Between Banks Over Secured Assets; Must Be Referred To Arbitration : Supreme Court

In a significant ruling under the SARFAESI Act, 2002 (“Act”), the Supreme Court today (May 23) held that inter-creditor disputes (between secured creditors) must be resolved through arbitration under Section 11 of the Act read with the Arbitration & Conciliation Act, 1996 (“Arbitration Act”). Unlike the Arbitration and Conciliation Act, which requires a written agreement for reference, Section 11 of the Act creates a statutory mandate for arbitration, eliminating the need for any such...

All Trademark Disputes Aren't Outside Arbitration; In Personam Issues Relating To License Agreement Arbitrable : Supreme Court

The Supreme Court recently held that a mere allegation of fraud or misconduct does not divest an arbitral tribunal of its jurisdiction to adjudicate in personam disputes stemming from contractual relationships governed by an arbitration agreement.“The law is well settled that allegations of fraud or criminal wrongdoing or of statutory violation would not detract from the jurisdiction of the arbitral tribunal to resolve a dispute arising out of a civil or contractual relationship on the basis of...

S. 31(7) Arbitration | Arbitral Tribunal Has Power To Award Different Rates Of Interest For Pre-Reference & Pendente Lite Period : Supreme Court

The Supreme Court held that under the Arbitration and Conciliation Act, 1996, an Arbitral Tribunal has the power to award different rates of interest for different phases.A bench comprising Justices Abhay S. Oka and Ujjal Bhuyan overturned the Delhi High Court's ruling, which had invalidated the tribunal's grant of interest on interest, deeming it impermissible under Section 31(7) of the Act. The bench heard the case where the dispute originated from a 1984 contract for the Thermal Power...

Supreme Court Deprecates 'Deliberate, Ambiguous' Drafting Of Arbitration Clauses; Calls For Suo Motu Action In Malafide Cases

Delivering a significant judgment on arbitration law, the Supreme Court today deprecated the practice of arbitration clauses being deliberately phrased "ambiguously" by members of legal fraternity and urged judicial forums across the country to throw out cases involving "shoddily drafted arbitration clauses" at the threshold.The Court said that such "malafide cases" are a "criminal wastage of judicial time" and have been allowed to go on for long. It called on the judicial forums to take...

Private Arbitration Clauses Cannot Override Statutory Mandates Under MSMED Act : Supreme Court

Reaffirming that the MSMED Act prevails over the Arbitration Act, as held in Gujarat State Civil Supplies v. Mahakali Foods, the Supreme Court set aside the Karnataka High Court's interference with MSMED proceedings in Delhi, despite the contract naming Bengaluru as the arbitration seat. The Court clarified that private contractual clauses cannot override the statutory mandate of the MSMED Act. Since the appellant-supplier was registered in Delhi, the Court noted that the Delhi Arbitration...

High Court May Grant Article 227 Interim Relief In Arbitration Proceedings In Exceptional Cases : Supreme Court

aThe Supreme Court (May 7) held that while the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) mandates minimal judicial interference, a High Court may, in exceptional cases, exercise its supervisory jurisdiction under Article 227 of the Constitution to grant interim relief, particularly where denial of such protection would result in irreparable harm. “We are aware of the established legal principle that the Courts should refrain from interfering with the invocation of a bank...

Dispute Over Full & Final Settlement Is Arbitrable Despite Parties Discharging Contract : Supreme Court

The Supreme Court today (May 6) observed that if the insured alleges coercion in arriving at a settlement with the insurer, then the dispute over the validity of the settlement remains arbitrable. “Any dispute pertaining to the full and final settlement itself by necessary implication being a dispute arising out of or in relation to or under the substantive contract would not be precluded from reference to arbitration as the arbitration agreement contained in the original contract continues to...

Can Arbitral Awards Be Modified In Setting-Aside Proceedings? – A Brief On Supreme Court's Re-Interpretation Of Section 34 Of Arbitration Act

Section 34 of the Arbitration and Conciliation Act, 1996 ('Act'), governs the setting-aside of awards arising from arbitrations seated in India. This provision does not provide any powers for the setting-aside court to vary or modify portions of the award. This was the legal position in vogue under Indian law, until the Hon'ble Supreme Court's reinterpretation of Section 34, by its judgment dated 30th April 2025 in Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited ('Balasamy'). By their...

If Courts Can Only Set Aside Awards & Can't Modify Them, Parties Will Be Forced To Undergo Fresh Round Of Arbitration : Supreme Court

The Supreme Court recently held that in order to ensure efficient dispute resolution and uphold the objectives of the Arbitration and Conciliation Act 1996, the Court should be allowed to modify awards when parties challenge the tribunal's decision. The decision was rendered by a Constitutional Bench led by CJI Sanjiv Khanna comprising Justices BR Gavai,Sanjay Kumar, AG Masih and KV Viswanathan. Justice KV Viswanathan, however dissented on th issue whether Courts can modifiy awards under...