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The Supreme Court of India has pronounced numerous judgments in the matters related to the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) during the period from January to June, 2026. In this write-up, the important pronouncements are briefly discussed.
Whether failure to issue a notice under Section 21 of the Arbitration Act is fatal to a party’s right to pursue its claims before the arbitral tribunal?
M/s Bhagheeratha Engineering Ltd. v. State of Kerala, 2026 INSC 4 (Judgment dated 05.01.2026)
The Supreme Court held that the object of Section 21 of the Arbitration Act is only for the purpose of commencement of arbitral proceedings. There is no mandatory prerequisite for issuance of a Section 21 notice prior to the commencement of arbitration, and issuance of a Section 21 notice may come to the aid of parties and the arbitrator in determining the limitation for the claim. Failure to issue a Section 21 notice would not be fatal to a party in arbitration if the claim is otherwise valid and the disputes arbitrable.
Whether the Court under Section 37 of the Arbitration Act is justified in interfering with the judgment under Section 34 upholding the arbitral award?
The Supreme Court held that the jurisdiction of the Court under Section 37 of the Arbitration Act is akin to the jurisdiction of the Court under Section 34 of the Arbitration Act. Therefore, the scope of interference by the Court in appeal under Section 37 cannot go beyond the grounds on which challenge can be made to the award under Section 34, and the Courts exercising powers under Sections 34 and 37 do not act as a normal court and ought not to interfere with the arbitral award on a mere possibility of an alternative view. The appellate power under Section 37 is exercisable only to find out if the Court exercising power under Section 34 has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to hold whether the award is right or wrong, and the award cannot be touched, unless it is contrary to the substantive provision of law or any provision of the Arbitration Act or the terms of the agreement.
Before which Court does an application under Section 29A (4) of the Arbitration Act for extension of the mandate of an arbitral tribunal lie?
Jagdeep Chowgule v. Sheela Chowgule & Ors., 2026 INSC 92 (Judgment dated 29.01.2026)
The Supreme Court held that the “Court” under Section 29A of the Arbitration Act shall be the Civil Court of ordinary original jurisdiction in a district, and includes the High Court in exercise of its original civil jurisdiction under Section 2(1)(e) and shall not be the High Court or the Supreme Court under Section 11(6) of the Arbitration Act. The exercise of jurisdiction under Section 11 stands exhausted upon the constitution of the arbitral tribunal, and there is no residual supervisory or controlling power left with the High Court or the Supreme Court over the arbitral proceedings after appointment is made. The conclusion that there will be hierarchical difficulties, conflict of power or jurisdictional anomaly if a Civil Court entertains an application under Section 29A was held to be untenable as interpretation based on a perception of status or hierarchy of Courts is opposed to the fundamental conception of the rule of law. The extension of mandate or substitution of an arbitrator under Section 29A does not partake the character of “appointment” under Section 11 and the expression “Court” in Section 29A must be accorded the meaning assigned to it under Section 2(1)(e).
Whether the Court in exercise of jurisdiction under Section 37 of the Arbitration Act can modify the amount of compensation awarded by the Court under Section 34?
The Supreme Court held that the modification of the arbitral award so as to enhance the amount of reasonable compensation by the Section 34 Court was a permissible exercise, as the modification was only with a view to apply the contractual clause to the facts of the case without undertaking any examination of the merits of the dispute. It was further held that the Court exceeded its jurisdiction under Section 37 when it proceeded to re-work and re-calculate the amount of reasonable compensation. In the absence of a finding that the determination of reasonable compensation by the Section 34 Court suffered from arbitrariness or travelled beyond the contractual terms, no interference was called for.
Whether a Court acting under Section 15(2) of the Arbitration Act can declare arbitral proceedings conducted during the moratorium period as a nullity?
The Supreme Court held that the High Court exceeded its jurisdiction in taking the view that the proceedings held by the arbitral tribunal were a nullity because of the operation of a moratorium. It was held that it would be impermissible for a court acting under Section 15(2) of the Arbitration Act to adopt a procedure whereby it exercises jurisdiction barred to it by the Arbitration Act. The High Court had set aside an order rejecting an application under Section 16, as well as Section 17 orders, but not in a proceeding under Section 37, and had set aside further procedural orders. The proper and legal course for the High Court acting under Section 15(2) should have been to appoint a substitute arbitrator to continue from the existing stage of the proceedings, and the object of speedy resolution of disputes by arbitration would best be subserved by a substitute arbitrator continuing at the point at which the earlier arbitrator has left off.
Whether Section 29A (6) of the Arbitration Act mandates substitution of an arbitrator as an inevitable consequence upon termination of the arbitrator’s mandate under Section 29A (4)?
The Supreme Court held that Section 29A (6) of the Arbitration Act empowers and obligates the Court to substitute an arbitrator only where the situation so warrants, and that substitution of an arbitrator is not an inevitable consequence which would necessarily follow the mandate of the arbitrator standing terminated under Section 29A (4) of the Arbitration Act. It was further clarified that the decision in Mohan Lal Fatehpuria v. M/s. Bharat Textiles & Ors. does not mandate the substitution of an arbitrator as an inevitable consequence. It was further held, relying on Jagdeep Chowgule v. Sheela Chowgule & Ors. that Section 11 of the Arbitration Act will have no bearing on the working of the provisions of Chapters 5 and 6 of the Arbitration Act, wherein Section 29A is located, and accordingly, the application for extension of time under Section 29A (4) did not lie before the High Court.
Whether the provisions of the Arbitration Act restrict the power of the arbitral tribunal to award pre-award/pendente lite interest when the parties have agreed to the contrary?
Union of India & Ors. v. Larsen & Toubro Limited, 2026 INSC 203 (Judgment dated 27.02.2026)
The Supreme Court held that the statutory scheme under Section 28(3) and Section 31(7)(a) of the Arbitration Act subordinates the discretion of the arbitrator to the contractual provisions governing interest. The provisions of the Arbitration Act including provisions contained in Section 31(7)(a), give paramount importance to the contract entered into between the parties and categorically restrict the power of an arbitrator to award pre-award/pendente lite interest when the parties have themselves agreed to the contrary, and thus the arbitral tribunal cannot award pre-award/pendente lite interest, even in the form of compensation. The expression “amounts payable to the contractor under the contract” is independent, distinct and of wide amplitude, and cannot be read down to defeat its plain meaning. With respect to post-award interest, pre-award and post-award interest operate in distinct fields, and a contractual bar applicable to the former cannot, by implication, be extended to the latter. It was further held that courts retain the power to modify the rate of post-award interest under Section 31(7)(b) where facts justify such modification.
Whether the doctrine of transnational issue estoppel bars a party that has failed before the seat court from relitigating settled factual issues before the enforcement court?
Nagaraj V. Mylandla v. PI Opportunities Fund-I and others, 2026 INSC 298 (Judgment dated 25.03.2026)
The Supreme Court held that a party which has failed in its challenge to the arbitral award before the seat court cannot seek to reopen factual issues that were argued on merits and settled by such court once again before the enforcement court, and that in the guise of doing so, a merits-based evaluation cannot be resorted to by the enforcement court and it cannot reopen factual issues which were conclusively settled on merits by the decision of the seat court. Opposition to enforcement of a foreign arbitral award on public policy violation grounds would necessarily stand on a different footing. Notwithstanding the decision of the seat court upholding an arbitral award, the same can still be subjected to examination by the enforcement court against the parameters of the public policy of the State in which enforcement of such award is sought, and such a merits-based evaluation is beyond the scope of the enforcement court’s jurisdiction under Section 48 of the Arbitration Act and would be barred by application of the doctrine of transnational issue estoppel.
Whether, despite an express designation of the seat of arbitration, the conduct of proceedings and rendering of the award at the venue would confer jurisdiction upon courts at the venue?
The Supreme Court held that the seat of arbitration constitutes the juridical home or legal place of arbitration, determines the curial law governing the arbitral process, and identifies the court having supervisory control. Once the seat is designated by agreement of the parties, the courts of that place alone have exclusive jurisdiction to entertain all proceedings arising out of the arbitration, including challenges to the award, excluding all other courts even those where the cause of action may have arisen. The venue is merely a geographical location chosen for convenience and does not confer jurisdiction, alter, or determine the seat, the arbitral tribunal is free to conduct proceedings at locations different from the seat without affecting the juridical seat. Where the seat is not expressly designated, courts determine it by applying the closest and most intimate connection test and in appropriate cases by construing the venue as the seat where the agreement and surrounding circumstances indicate such intention.
Does the word “can” in an arbitration clause mandate reference of disputes to arbitration?
The Supreme Court held that the word “can”, as ordinarily understood, means capacity, capability or factual possibility and that if it is the requirement that is to be denoted, “shall” is the most appropriate word which signals a mandate or obligation. Reaffirming that consent is the source of the arbitral tribunal’s jurisdiction and that arbitration can only be the chosen method if both parties mutually intend to refer their differences to it, it was held that the words used in an agreement must disclose a determination and obligation to go to arbitration and not merely provide for the possibility of doing so, and that a clause which requires a further consent or consensus before reference to arbitration is not an arbitration agreement but an agreement to enter into an arbitration agreement in the future. It was further held that the principle that doubt be resolved in favour of referring the matter to arbitration applies only where the parties are ad idem as to arbitration being the chosen medium.
Whether a petition under Section 9 of the Arbitration Act at the post-award stage, by a party that has lost in the arbitral proceedings and has no enforceable award in its favour, is maintainable in law?
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 (Judgment dated 24.04.2026)
The Supreme Court held that the meaning of the expression “a party” in Section 9 cannot be contextually modulated or varied depending upon the outcome of the arbitral proceedings. It was further held that the statutory framework does not prescribe any qualification that would confine the availability of post-award relief under Section 9 solely to award-holders. It was held that Sections 34 and 36 provide remedies against an award or a stay thereof, whereas Section 9 ensures protection of the subject matter or the amount in dispute. An unsuccessful party cannot secure protection of its claim under Section 34 or Section 36. It was further held that the fundamental premise on which it had been held that an unsuccessful party post-award is disentitled to seek interim relief is untenable in law, for it now stands conclusively settled by the Constitution Bench judgment in Gayatri Balasamy v. ISG Novasoft Technologies Limited, that Courts exercising jurisdiction under Sections 34 and 37 of the Arbitration Act possess the power to modify an arbitral award where the award is severable. It was held that the threshold for grant of interim relief will be higher in the case of an unsuccessful party in arbitration seeking such relief, and that in rare and compelling cases, permitting the unsuccessful party to invoke Section 9 would prevent irreparable prejudice. Consequently, it was held that any party to an arbitration agreement, including an unsuccessful party in arbitration, may invoke Section 9 of the Arbitration Act at the post-award stage, however, Courts would be well advised to exercise care and circumspection while dealing with a Section 9 application filed by an unsuccessful party.
Whether a party that has participated in arbitral proceedings without objection can challenge the arbitral award on the ground of expiry of the arbitrator’s mandate?
The Supreme Court held that where the arbitrator had unilaterally extended the mandate on three occasions and had even after expiry of the mandate fixed a date of hearing, and the appellant did not raise any objection in its email that the mandate of the arbitrator had expired, the appellant had tacitly agreed to the extension of the mandate of the arbitrator. Having participated in the proceedings before the arbitrator and acquiesced with the alleged invalidity, the appellant is estopped from challenging the award on the ground that the mandate of the arbitrator had expired. With respect to the jurisdiction of the commercial court under Section 33(1)(a), it was held that the provision confers upon the arbitral tribunal the limited power to correct any computational, clerical, or typographical errors in an award and is neither designed nor intended to serve as a vehicle for the substantive modification of an award or the review of the merits of the findings recorded therein. The substitution of “simple interest” with “compound interest” for the pendente lite period is not a correction of a computational, clerical, or typographical error. The characterisation of the mode of interest goes to the very substance of the arbitrator’s assessment of the equities of the case and reflects a substantive determination on the merits.
Whether a challenge to an order passed under Section 16 of the Arbitration Act is entertainable in exercise of writ jurisdiction under Articles 226 and 227 of the Constitution?
The Supreme Court held that besides the well settled parameters to be borne in mind while exercising jurisdiction under Articles 226 and 227 of the Constitution, it is also necessary to be mindful of the statutory scheme of the concerned enactment from which the impugned order arises, and if the enactment besides providing for a statutory remedy also expects minimal judicial interference prior to the culmination of the arbitral proceedings, the threshold to be satisfied before exercising discretion under Articles 226 and 227 of the Constitution would be higher. It would have to be demonstrated that such challenge cannot await the final adjudication and intervention in exercise of writ jurisdiction at an interim stage is imperative. Once it is found that the arbitrator had jurisdiction to decide the objection, the jurisdiction to decide cannot mean to decide in a particular manner, and an error on merits may not be one beyond jurisdiction, it was therefore impermissible for the writ court to entertain a challenge to the said adjudication by proceeding to interpret the agreements. The Single Judge was accordingly not justified in exercising writ jurisdiction under Articles 226 and 227 of the Constitution for examining and setting aside the order passed by the Arbitrator under Section 16 of the Arbitration Act, and the challenge to a dismissed Section 16 order must await the final award and be raised under Section 34 of the Arbitration Act.
Whether the jurisdiction under Sections 34 and 37 of the Arbitration Act is narrowly circumscribed and whether a jurisdictional challenge not raised at the appropriate stage can be raised at a belated stage?
The Supreme Court held that the jurisdiction under Sections 34 and 37 of the Arbitration Act is narrowly circumscribed and cannot be equated with ordinary appellate jurisdiction, and that once the arbitral tribunal has applied its mind, appreciated the evidence on record, and interpreted the terms of the contract to take a certain view, such view would ordinarily be accepted and ought not to be interfered with unless it is palpably erroneous. The jurisdiction of the Courts to upset an award can be imagined as a narrowing pyramid, higher the Court, lesser is the propensity to interfere, and the higher the threshold that a party must meet to convince that Court to interfere. The Court under Section 37 does not sit as a court of appeal on the merits of the arbitral award and interference is permissible only where the Section 34 Court has exceeded its jurisdiction. With respect to the jurisdictional challenge, it was held that once a jurisdictional issue has been specifically raised, adjudicated through the hierarchy of Courts, and permitted to attain conclusiveness, the same issue cannot thereafter be repeatedly raised in collateral proceedings under the guise of “public policy” or subsequent legal developments, and even if a precedent is subsequently overruled, such overruling does not reopen decrees or adjudications which have attained finality between parties.
Whether the limitation under Section 34(3) of the Arbitration Act commences from the date of the original award or from the date on which the application under Section 33 is disposed of?
National Highway Authority of India v. T. Younis & Anr., 2026 INSC 616 (Judgment dated 02.06.2026)
The Supreme Court held that from a careful scrutiny of Section 34(3) of the Arbitration Act, where a request under Section 33 of the Arbitration Act has been made, the limitation for filing an application under Section 34 of the Arbitration Act shall be reckoned from the date on which such request is disposed of by the arbitral tribunal, and the said provision does not distinguish between applications which are ultimately allowed or dismissed, nor does it indicate that only an application which is maintainable under Section 33 would defer the commencement of limitation under Section 34(3) of the Arbitration Act. The Court cannot read into the provision a restriction which the legislature itself has not consciously incorporated. Once proceedings under Section 33 are initiated and entertained by the arbitral tribunal, the parties cannot be compelled to institute proceedings under Section 34 merely as a matter of abundant caution, and consequently, the limitation prescribed under Section 34(3) can start only from the date on which the proceedings under Section 33 are disposed of. What is relevant is whether the jurisdiction of the arbitral tribunal under Section 33 had been formally invoked and such proceedings remained pending consideration before the tribunal. Where applications under Section 33 are found to be sham, frivolous, or mala fide or solely filed for the purpose of defeating limitation under Section 34(3), the courts would be justified in imposing exemplary and punitive costs.
About the authors: Krishna Vijay Singh is a Senior Partner and Muneeb Rashid Malik is a Senior Associate at Kochhar & Co.
Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.
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