Greetings! This edition provides a recap of arbitration updates and judgments rendered in September 2026. Stay informed, stay ahead – happy reading!
Global Highlights
Uzbekistan accedes to the Singapore Convention on Mediation
Uzbekistan became the Convention’s 24th State party when it acceded on 28 August 2026 during Singapore Convention Week. The Convention will enter into force for Uzbekistan on 28.02.2027. It provides a harmonised legal framework for invoking, and enforcing, international settlement agreements resulting from mediation. Once in force, mediated settlements with Uzbek counterparties will be enforceable under the Convention’s framework.
Domestic Highlights
Interest continues to run on a conditional deposit; Supreme Court asks Law Commission to frame a uniform law on court deposits – National Seeds Corporation Ltd. v. National Agro Seed Corporation (India), S.L.P. (C) No. 5710 of 2025
Highlighting the distinction between a ‘deposit’ and a ‘payment’, the Supreme Court has ruled that an award-debtor’s liability to pay interest ceases only when the deposit complies with Order XXI Rule 1 of the CPC. To comply with Order XXI Rule 1 of the CPC, the deposit must have been made unconditionally and the same must be available to the decree-holder for withdrawal. Additionally, the Court noted the absence of a uniform framework for deposits in the Indian judiciary and requested the Law Commission of India to examine the issue and recommend an appropriate legislation.
This judgment has financial implications for commercial parties especially as it quite common for courts to ask a judgment debtor which has challenged the award to deposit the amount. This judgment clarifies that the interest will continue to accrue awaiting disposal of Section 34 petitions and where the amount cannot be withdrawn by the award holder without a security such as a bank guarantee. Thus, even if a party deposited the amount at the time of filing of Section 34 petition, it may have to pay further amounts to the award-holder if the award is sustained.
A short arbitration clause in a purchase order is binding if it shows an intention to arbitrate – Lion Rubber Industries Private Limited and Anr. v. Santec Exim Private Limited and Ors., COMM ARBITRATION APPLICATION (L) NO.23526 OF 2026
Allowing a Section 11 application, the Bombay High Court held that a purchase order clause containing just the word “Arbitration – Subject to Mumbai Jurisdiction” is a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. The Court held that Section 7 requires no particular form of words. What matters instead is whether the clause, read with the whole contract, shows an intention to arbitrate rather than go to court. It also held that “Subject to Mumbai Jurisdiction” did not reduce the clause to a civil-court jurisdiction clause but linked the arbitration to the supervisory jurisdiction of the Mumbai courts, since any other reading would leave the word “Arbitration” without meaning.
An arbitrator appointment cannot be challenged simply because he interpreted a similar contractual clause in another arbitration involving a common party – Steel Authority of India Limited v. British Marine PLC, FAO(OS) (COMM)17/2026 & CM APPL.6374/2026
Dismissing SAIL’s appeal under Section 37, a Division Bench of the Delhi High Court held that an arbitrator does not become open to justifiable doubts under Section 12 read with Item 24 of the Fifth Schedule merely because he has interpreted the same or a similar clause in another arbitration involving one of the parties. Relying on Explanation 3 to the Fifth Schedule, the Court noted that maritime arbitrations draw on a small, specialised pool of arbitrators; thus, a stricter approach would leave a shortage of expert arbitrators, keep them permanently disqualified, and defeat the purpose of arbitration. Following HRD Corporation, the Court held that a prior decision on the same issue shows bias only where there is something more, such as material suggesting that the arbitrator will approach the case with a closed mind. It further held that a challenge must be raised within 15 days under Section 13(2) or the applicable institutional rules. Even though SAIL had known from the beginning that the same arbitrators were also deciding its similar dispute with another entity, they objected only months later. Therefore, SAIL was deemed to have waived the objection.
Appeal against rejection of interim relief cannot be remitted to arbitral tribunal – Union of India & Ors. v. Hariom Projects Pvt. Ltd., Civil Appeal No. 13136 of 2026 (arising out of SLP (Civil) No. 33087 of 2026)
The Supreme Court held that an appeal arising out of Section 37 of the Arbitration and Conciliation Act, 1996 cannot be remitted to an Arbitral Tribunal for adjudication under Section 17 of the same Act. The Court reasoned that the appellate jurisdiction under Section 37 vests only in the “Court” as defined in Section 2(1)(e), and an Arbitral Tribunal acting under Section 17 cannot sit in appeal over a court’s order under Section 9. At most, once the tribunal is constituted, the court may give the party liberty to approach the tribunal separately under Section 17, and the tribunal may then consider interim relief in view of later events.
Disclaimer
The content provided in this newsletter is intended for general awareness and should not be considered as legal advice. Readers are advised to consult with a qualified legal professional regarding any specific issues mentioned herein. If you have any questions about any of these developments or would like to see something different next month, reach out to us at knowledge@sarthaklaw.com.