The dynamic world of arbitration never slows down — and we’re back with key rulings and updates from March 2025!
Rendezvous – Indian Courts and Arbitration
Supreme Court
Only a consumer can choose whether to opt for arbitration or seek remedy before the forums established under consumer welfare legislations – M/s Citicorp Finance (India) Limited v. Snehasis Nanda [2025 SCC OnLine SC 594]
The Supreme Court, while adjudicating on a challenge to judgment by National Consumer Disputes Redressal Commission (“NCDRC”), has reiterated that consumer disputes are primarily non-arbitral. However, the Court added that if the underlying agreement provides for an arbitration agreement, it is the consumer alone which has the exclusive choice of opting / resorting to arbitration. In the case at hand, the Court set-aside NCDRC’s order and held that the complainant was not a consumer as per the definition given under Section 2(1)(d) of the Consumer Protection Act, 2019 and even the existence of the tripartite agreement which contained the arbitration clause was in doubtful.
Court directs parties to approach Secretary General of Permanent Court of Arbitration at Hague, in light of no agreed appointing authority – Tata Communications Ltd. v. Aurora Engineering Company & Anr..[2025 SCC OnLine SC 632]
On 17.03.2025, a three judges’ bench of the Supreme Court, disposed an application for appointment of arbitrator in an international arbitration, asking the parties to make a request before the Secretary General of the Permanent Court of Arbitration at Hague. In the case at hand, there was no agreement on the choice of the appointing authority. Therefore, after taking note of applicable Article 6 Clause 2 of the UNICITRAL Arbitration Rules, 2021, the Hon’ble Court issued the aforesaid directions.
Supreme Court reconciles provisions of contract in order to understand the intent of parties, in order to decide the ‘designated seat’ of arbitration – Disortho S.A.S. v. Meril Life Sciences Private Limited [2025 SCC OnLine SC 570]
The Supreme Court while deciding an application under Section 11(6) of the Arbitration and Conciliation Act (“Act / 1996 Act”), explained in detail the three intertwined concepts of arbitration i.e. lex-contractus, lex arbitri and lex-fori. In the case at hand, two clauses of a distribution agreement were required to be reconciled and interpreted. On one hand Clause 16.5 stated that the distribution agreement would be governed as per laws of India and subject to jurisdiction of courts in Gujarat, India. Whereas Clause 18 i.e. the dispute resolution clause stated that the arbitration would be committed to arbitration and conciliation centre of the Chamber of Bogota DC and according to their rules. Clause 18 also confirmed that arbitration will take place in Bogota DC. The Supreme Court to address the conflict between Clauses 16.5 and 18 applied conflict of law principle by reading the contract as a whole and giving effect to all its provisions. It was finally held that Clause 16.5 is clear and unambiguous so far it stated that the entire agreement shall be governed by laws of India and jurisdiction shall also lie in Gujarat, India. Bogota DC was held to only be the venue of arbitration proceedings and the rules of the aforesaid institution were to govern the arbitration proceedings only.
Delhi High Court
During a force majeure event, other contractual obligations are temporarily suspended –Airports Authority of India v. Delhi International Airport Limited & Anr.[2025 SCC OnLine Del 1431]
The High Court of Delhi reaffirmed an arbitral award which held that Covid-19 was a force majeure event and Airports Authority of India would not be entitled to any annual fee / monthly annual fee from Delhi International Airport Limited till such period that the pandemic continued i.e. 28.02.2022. The court was unable to find any illegality or perversity in the award so passed after taking into consideration the relevant clauses of the contract, the witness testimony and the communications exchanged between the parties during such period.
Reiterated! In absence of a defined ‘seat’, ‘venue’ or ‘place’ of arbitration, recourse be made to the court where cause of action arose –Faith Constructions v. N.W.G.E.L Church [2025 SCC OnLine Del 1746]
The Court dismissed an application seeking appointment of arbitral tribunal on the grounds that the cause of action has arisen outside its territory and therefore, the Delhi High Court would not have the jurisdiction to appoint the arbitrator. In the case at hand, the Court noted that the arbitration agreement lacks clarity regarding the ‘seat’, ‘venue’, or ‘place’ of arbitration. Therefore, following earlier precedents and the settled position of law, the Court decided the application as per Sections 16 to 20 of the Civil Procedure Code (CPC) which deal with territorial jurisdiction. The Court took into consideration that the contract was signed and notarized in Odisha, the contract was performed in Odisha and even the Respondent’s place of business is in Odisha. As no part of cause of action had arisen in Delhi, the Court declined to entertain the application.
Remedy under Section 11 for the same cause of action would stand barred, if the earlier Section 11 petition was unconditionally withdrawn – M/s Dewan Chand v. The Chairman cum Managing Director [2025 SCC OnLine Del 1872]
The High court of Delhi refused to appoint an arbitrator in a 3rd attempt made for reference to arbitration. The court noted that earlier 2 Section 11 were filed for the same cause of action. While the first Section 11 was withdrawn with a liberty to reapproach the court for appointment of arbitrator, the 2nd Section 11 petition was unconditionally withdrawn. The court also noted that during the pendency of 2nd Section 11 petition, the cause of action against invocation of bank guarantee had already arisen yet no liberty was sought for reapproaching the court. Citing the earlier precedents and order 23 rule 1 (4) of CPC, the M/s Dewan Chand were barred from approaching the court again for the same cause of action.
High Court of Bombay
Sections 9 & 11 are not parallel proceedings and existence of one does not debar the other – Fab Tech Works & Constructions v. Savvology Games & Ors. [Commercial Arbitration Application No. 419 Of 2024 and Related Matters]
The Bombay High Court has ruled that a Section 11 petition is maintainable despite the pendency of a Section 9 petition and the same do not constitute parallel proceedings. The Hon’ble Court held that each provision serves a distinct legal function. While Section 9 under the 1996 Act is meant to grant temporary interim protection, the Section 11 petition is the basis of referring disputes to an arbitrator. The Court finally disposed both the Section 9 and 11 petitions, appointed an arbitrator and asked the parties to approach the arbitrator in case they wanted variation in the orders passed under Section 9 petition or for any jurisdiction related issues.
Acting on invoices without objection implies acceptance of the embedded arbitration clause – Sanjiv Mohan Gupta v. Sai Estate Consultants Chembur [2025 SCC OnLine Bom 567]
The Bombay High Court while considering an application under Section 11 reaffirmed that an arbitration clause embedded within invoices can be deemed accepted if both parties have acted upon those invoices without objection. The Hon’ble Court stated that since the invoices formed a critical part of the contractual framework the issuance of cheques against these invoices can be deemed prima facie evidence of the Respondent’s acceptance of the terms, including the arbitration clause.
High Court of Patna
Venue implies seat in absence of contrary intention in arbitration clauses – M/s Pramila Motors v. M/s Okinawa Autotech International [REQ. CASE NO. 53 OF 2024]
In a recent judgment, the Patna High Court while disposing off a Section 11 petition, clarified that when an agreement merely mentions a “venue” without specifying a separate “seat” or indicating any contrary intention, no alternative inference can be drawn. Applying this principle to the present case, where clause 36.3 of the agreement states that the venue of arbitration is New Delhi, the Court concluded that the parties intended to confer exclusive jurisdiction on the courts in Delhi.
High Court of Kerala, Ernakulum
Article 227 Petition not maintainable as parties have to wait until award is pronounced – M.I. Mohammed v. M/s HLL Life Care & Ors. [OP(C) No. 316 of 2024]
In the instant case, a Sub Court in Kerala set aside an award under Section 34 objections filed present Respondent. Aggrieved by the same, the Petitioner invoked Article 227 of the Constitution of India before the High Court of Kerala, Ernakulum challenging the said order. The Court reasoned that the object of minimising judicial intervention while the matter is in process of being arbitrated upon, will certainly be defeated, if the High Court could be approached under Article 227 of the Constitution against every order made by the Arbitral Tribunal. The Hon’ble High Court clarified that the remedy available to a party aggrieved is to challenge the award under Section 34 or 37 of the Act, hence intervention by the High Court under Article 227 is not permissible.
Global Highlights
Hong Kong eases visa rules to boost its role as global arbitration hub
In a strategic move to reinforce its position as a global arbitration hub, the Hong Kong government has introduced measures to facilitate easier entry for foreign individuals attending arbitral proceedings. The new policy allows visitors, including legal representatives, arbitrators, and expert witnesses, to participate in arbitration hearings without the need for additional work visas. This reform aligns with Hong Kong’s commitment to fostering an arbitration-friendly environment, ensuring efficiency and accessibility for international dispute resolution.
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.