1. Tarun Dhameja v. Sunil Dhameja & Anr., Civil Appeal No.
14005 of 2024
The Supreme Court reaffirmed the mandatory nature of arbitration clauses, ruling that such
clauses cannot be considered optional once incorporated into a contract. The judgment clarifies
that invoking the arbitration clause does not require mutual consent at a later stage; rather, it is
sufficient that the parties have mutually agreed upon arbitration at the time of contract formation.
The Court specifically addressed the interpretation of a clause stating that arbitration shall be
optional and that the arbitrator will be appointed by mutual consent. It held that this portion
cannot be read in isolation but must be interpreted in conjunction with the entire arbitration
clause. An aggrieved party retains the right to invoke arbitration, and while the arbitrator's
appointment requires mutual consent, failure to reach consensus does not negate the arbitration
clause. In such cases, courts can step in to appoint the arbitral tribunal under the Arbitration and
Conciliation Act, 1996. The Court emphasized that arbitration clauses must be interpreted
pragmatically, ensuring their enforcement rather than rendering them redundant.
2. M/s Arif Azim Co. Ltd. v. M/s Micromax Informatics FZE, Arbitration Petition No. 31 of
2023
In this case, the Supreme Court departed from the traditional "closest connection test" for
determining the juridical seat of arbitration. Instead, the Court held that an express designation of
the seat in an arbitration agreement is crucial, as the seat determines the procedural law
applicable to the arbitration.
The Court found that the arbitration clause in question explicitly designated Dubai, UAE, as the
arbitration seat, and the governing law was the UAE Arbitration and Conciliation Rules. Since
there were no significant contrary indications suggesting that Dubai was merely a venue rather
than the juridical seat, the Court concluded that Dubai had been unambiguously designated as the
arbitration seat. It reiterated that the seat of arbitration determines exclusive jurisdiction, not the
other way around.
3. Kirpal Singh v. Government of India, Civil Appeal Nos. 12849-12856 of 2024
The Supreme Court provided clarity on the applicability of Section 14 of the Limitation Act to
arbitration proceedings. The provision allows for the exclusion of time spent in bona fide pursuit
of a case in the wrong forum, thereby preventing undue penalization of procedural errors.
The Court held that given the limited nature of remedies under Sections 34 and 37 of the
Arbitration and Conciliation Act, a liberal interpretation of limitation provisions is necessary to
prevent the loss of an opportunity to challenge an arbitral award. The ruling ensures that courts
consider the intention behind Section 14—to safeguard substantive remedies—while computing
limitation periods.
4. Punjab State Civil Supplies Corporation v. M/s Sanman Rice Mills, SLP (C) No. 27699 of
2018
This case reaffirmed the principle that appellate courts cannot interfere with arbitral awards
merely because they hold a different or preferable view. The Supreme Court emphasized that
awards can only be set aside for statutory reasons outlined in Section 34 of the Arbitration and
Conciliation Act.
The arbitral award in question was found to be based on evidence, reasonable, and not in
contravention of Indian public policy or fundamental legal principles. Since no statutory grounds
for interference under Section 34 were established, the Court held that the appellate court was
incorrect in setting aside the award simply on the basis of its own preferred interpretation. The
judgment reinforces the principle of minimal judicial intervention in arbitration.
5. State of West Bengal v. Rajpath Contractors, Civil Appeal No. 7426 of 2023
The Supreme Court ruled that arbitration appeals filed beyond three months from the issuance of
an award cannot invoke Section 4 of the Limitation Act to seek an extension.
In this case, the three-month limitation period expired on September 30, 2022, just before the
commencement of the Pooja vacation on October 1, 2022. The Court clarified that the statutory
period had already lapsed, and the appellants could not claim the benefit of Section 4 to extend
the deadline. This judgment underscores the strict application of limitation laws in arbitration
appeals, promoting finality and certainty in arbitral proceedings.
6. Kalanithi Maran v. Ajay Singh, 2024 SCC OnLine SC 1876
The Supreme Court, in a special leave petition arising from a Delhi High Court judgment,
addressed the reconsideration of a petition under Section 34 of the Arbitration and Conciliation
Act, 1996. The Division Bench of the Delhi High Court had remanded the proceedings to the
Single Judge to re-examine the validity of an arbitral award concerning refund and interest. The
Supreme Court upheld this decision, reiterating that interference with an arbitral award under
Section 34 must strictly adhere to statutory grounds. However, it also emphasized that the judge
hearing a Section 34 petition must thoroughly assess the grounds of challenge and determine
whether interference is warranted within the framework of the statute.
This ruling reinforces the principle that courts must exercise judicial scrutiny while remaining
within the boundaries of permissible statutory interference.
7. Disortho SAS VS. Meril Life Sciences
The Supreme Court’s judgment in 317 Disortho SAS v. Meril Life Sciences reaffirmed the
principle of minimal judicial intervention in international commercial arbitration. The Court
upheld the jurisdiction of the arbitral tribunal, emphasizing that an arbitration agreement's
governing law plays a crucial role in determining its enforceability. It ruled that the scope of
judicial review under Section 34 of the Arbitration and Conciliation Act, 1996, is limited to
statutory grounds such as procedural unfairness or a violation of public policy. By reinforcing the
sanctity of arbitration clauses, the judgment ensures that disputes are resolved as per the agreed
mechanisms, preventing unnecessary court interference.
This ruling significantly impacts international commercial arbitration by strengthening India’s
pro-arbitration stance and reinforcing party autonomy. It clarifies that once an arbitration clause
is validly agreed upon, courts should not entertain challenges unless strong legal grounds exist.
The decision also underscores the importance of designating a clear arbitration seat, as it
determines procedural law and jurisdiction.
