NOTABLE JUDGEMENTS JUNE 2025
ARBITRATION LAW
I. Case Title: BGM and M-RPL-JMCT (JV) Versus Eastern Coalfields Limited
Citation: 2025 LiveLaw (SC) 731
Court: Supreme Court of India
Decided on: 18.07.2025
Brief Facts:
- The Appellant–a joint venture entity–entered into a contract with the Respondent (Eastern Coalfields Ltd.) for the transportation/handling of goods. Disputes arose during the currency of the contract. The Appellant invoked Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator, relying upon Clause 13 of the General Terms and Conditions of the contract.
- Clause 13 stated that, in the case of parties other than government agencies, "the redressal of the dispute may be sought through Arbitration and Conciliation Act, 1996." The Respondent objected on the ground that the clause did not constitute a binding arbitration agreement under Section 7 of the Act. The Calcutta High Court upheld the objection and dismissed the application. The said order was impugned before the Supreme Court.
Issues:
- Whether the question of existence of an arbitration agreement should be left for the arbitral tribunal to decide?
- Whether clause 13 (supra) would constitute an arbitration agreement between the parties as contemplated under Section 7 of the 1996 Act?
- Whether clause 32 of Instructions to Bidders negates the existence of an arbitration agreement?
Judgment:
On Issue (1): The Court held that the role of the referral court under Section 11(6A) is confined to a prima facie determination of the existence of an arbitration agreement. It is not to conduct a mini-trial or laborious inquiry. The burden lies on the party invoking arbitration to demonstrate, prima facie, that an arbitration agreement exists.
On Issue (2): The Court held that Clause 13 does not constitute a binding arbitration agreement. The use of the phrase "may be sought through Arbitration..." does not indicate a mandatory or unequivocal intention to arbitrate. It is merely enabling in nature, indicating that the parties may in the future agree to arbitrate, but were not ad idem at the time of entering into the contract. Such clause lacks the requisite consensus and intent, as required under Section 7 of the Act and as clarified in Jagdish Chander v. Ramesh Chander (2007) and Mahanadi Coalfields v. IVRCL AMR JV (2022).
Accordingly, the appellant's reliance on Clause 13 was held to be misconceived.
On Issue (3): The Court held that Clause 32, which specifies the jurisdiction of civil courts, does not by itself negate the existence of an arbitration agreement. However, since Clause 13 was found not to be an arbitration agreement, the effect of Clause 32 was rendered academic.
II. Case Title: Engineering Projects (India) Limited Versus MSA Global LLC (Oman)
Citation: 2025:DHC:6093
Court: Delhi High Court
Decided on: 30 July 2025
Brief Facts:
- The Plaintiff, Engineering Projects (India) Ltd., entered into a contract with the Defendant, MSA Global LLC (Oman), containing an arbitration clause with a foreign seat (Singapore) under ICC Rules.
- The Defendant initiated arbitration proceedings under the clause.
- The Plaintiff approached the Delhi High Court seeking an anti-arbitration injunction, contending that the proceedings were vexatious, oppressive, and contrary to Indian public policy.
Issues:
- Does the Delhi High Court possess jurisdiction to entertain a civil suit seeking an anti-arbitration injunction in respect of foreign-seated arbitration proceedings?
- Whether the arbitration proceedings are prima facie vexatious or oppressive, thereby justifying court intervention?
- Interim Injunction: Whether the Plaintiff has established the necessary threshold criteria, a prima facie case, a balance of convenience, and irreparable harm, for the grant of interim relief?
Judgment:
- Maintainability: The Court held that civil courts in India have jurisdiction under equity and settled jurisprudence to entertain civil suits restraining foreign-seated arbitration, particularly when the proceedings are shown to be vexatious and oppressive
- Vexation and Oppression: After applying a litmus test, the Court concluded that the arbitration process revealed serious nondisclosures by an ICC co-arbitrator, undermining impartiality and fairness, thus rendering the proceedings prima facie oppressive and vexatious.
- Interim Injunction: The Plaintiff had satisfied all three conditions: (i) a prima facie case of abuse of the arbitration mechanism, (ii) balance of convenience favoring restraint, and (iii) the likelihood of irreparable injury. The Court accordingly granted an interim anti-arbitration injunction, restraining the continuation of the ICC arbitration in its current constitution.
III. Case Title: Umri Pooph Pratappur (UP) Tollways Pvt. Ltd. Versus M.P. Road Development Corporation and Another
Citation: 2025 INSC 907
Court: Supreme Court of India
Decided on: 30 July 2025
Brief Facts:
- The Appellant (a private tollway concessionaire) entered into a concession agreement with Madhya Pradesh Road Development Corporation Ltd. (MPRDC), a State-controlled entity, to develop and operate a road project in Madhya Pradesh.
- The contract was a works contract under Section 2(1)(i) of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 ("1983 Act").
- Initially, the Appellant filed a reference before the Madhya Pradesh Arbitration Tribunal, but later withdrew the same without liberty to refile.
- Thereafter, the Appellant instituted arbitration proceedings under ICADR rules invoking a clause in the same contract.
- MPRDC challenged these proceedings by filing a writ before the Madhya Pradesh High Court, which quashed the private arbitration, holding that the dispute fell within the exclusive jurisdiction of the statutory tribunal under the 1983 Act.
- The Appellant appealed to the Supreme Court against the High Court's order.
Issues:
- Whether disputes arising out of a works contract involving a State Government instrumentality fall exclusively within the jurisdiction of the Madhya Pradesh Arbitration Tribunal under the 1983 Act.
- Whether a private arbitration clause under the Arbitration and Conciliation Act, 1996, can override or bypass the statutory mandate established by the 1983 Act.
- Whether the Appellant could validly initiate private arbitration after withdrawing its reference before the statutory tribunal without liberty to refile.
Judgement:
- The Supreme Court, by a bench comprising Justices J. B. Pardiwala and R. Mahadevan, affirmed the High Court's decision.
- It held that disputes arising from a "works contract" with a Madhya Pradesh Government instrumentality must be referred exclusively to the MP Arbitration Tribunal, under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, regardless of the presence of an arbitration clause under the Act, 1996.
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