The third quarter of 2025 has witnessed a series of crucial rulings from the Supreme Court and various High Courts in India, providing clarity and guidance on both the substantive and procedural aspects of the Arbitration and Conciliation Act, 1996. Here’s a summary of some of the most notable judgments, trends and developments.
Clause on redressal of disputes under the Arbitration and Conciliation Act
In BGM AND M-RPL-JMCT (JV) vs Eastern Coalfields Ltd, the Supreme Court held that a clause which provides that “the redressal of the dispute may be sought through Arbitration and Conciliation Act,” does not constitute a valid arbitration clause. The court emphasised that the phrase “may be sought” indicates an absence of mutual, unequivocal intent to submit disputes to arbitration. Rather, it leaves parties free to mutually agree to arbitration subsequently rather than obligating them at the contract formation stage.
Failure of arbitrator to disclose prior professional engagement
The Delhi High Court in Engineering Projects India Ltd vs MSA Global LLC Oman, held that Indian courts retain inherent jurisdiction to grant anti-arbitration injunctions restraining foreign-seated arbitral proceedings when they are demonstrably “vexatious, oppressive, or unconscionable”, notwithstanding the parties’ arbitration agreement. It held that failure of the arbitrator to disclose prior professional engagement with a party would make out a ground for anti-arbitration injunction.
Interpretation of a clause specifying the exclusive jurisdiction of courts
In M/s Activas Management Advisor Pvt Ltd vs Mind Plus Healthcare Pvt Ltd, the Supreme Court clarified that exclusive jurisdiction determination in a clause which also provides for resolution of dispute through arbitration, would be akin to determining the seat of arbitration, even if the word “seat” is not expressly used.
Additional applications after appointing an arbitrator
In Kamal Gupta vs L.R. Builders Pvt Ltd, the Supreme Court held that once an arbitrator is appointed and the Section 11(6) petition is disposed of, the court becomes functus officio. Consequently, any subsequent application seeking intervention in the disposed matter is liable to be rejected. It also clarified that the power under Section 151 of CPC cannot be invoked to entertain such an application.
Validity of unsigned arbitration agreements
In Glencore International AG vs Shree Ganesh Metals & Anr., the Supreme Court held that an arbitration agreement need not be signed by both parties to be valid and enforceable. While Section 7(3) mandates the agreement be “in writing”, Section 7(4) permits an arbitration agreement to be formed through circumstances including exchange of letters and electronic communications. It further held that an unsigned agreement was binding because the parties’ consistent conduct, including acceptance of terms through the exchange of emails, issuance of letters of credit, and supply of goods, demonstrated a consensus and acceptance of the terms.
Arbitration awards involving a government employee/entity
In Motilal Agarwala vs State of West Bengal, the Supreme Court held that in matters involving government entities, the award must reach the competent authority with requisite knowledge and decision-making power to challenge or enforce the award. This may include the Chief Engineer or Department Secretary, rather than subordinate officials as the delivery of an award is not a mere formality but a matter of substance.
Disputes involving misuse of digital signatures or one-time passwords
In Sunita Gupta vs UGRO Capital Ltd & Ors, the Calcutta High Court ruled that disputes involving allegations of misuse of digital signatures or one-time passwords are arbitrable. It held that claims regarding consent and the unauthorised use of credentials to execute a loan agreement are substantive factual disputes falling within the arbitrator’s jurisdiction.
Overriding express interest awards
In HLV Ltd vs PBSAMP Projects Pvt Ltd, the Supreme Court ruled that the executing court lacks jurisdiction to enlarge an arbitral award by imposing compound interest when the tribunal has explicitly granted simple interest. Thus, once an interest regime is defined by the tribunal, it is final and any collateral claim will be legally unsustainable.
Arbitral award against an LLP
In Proteus Ventures LLP & Ors vs Archilab Designs, the Bombay High Court held that an LLP acts through its distinct legal entity, and partners who have not signed the underlying contract in their personal capacity cannot be subjected to joint and several liability. Consequently, the court set aside only the portion of the award targeting the individual partners, preserving the liability of the LLP itself.
*This blogpost is the third in a four-part series exploring key aspects of the arbitration law in India.
