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Tag: #Arbitration

  • Delhi High Court on Arbitration Award, Contractual Interpretation, and Damages in Charterparty Disputes

    Delhi High Court on Arbitration Award, Contractual Interpretation, and Damages in Charterparty Disputes

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 25.07.2026

    Delhi High Court on Arbitration Award, Contractual Interpretation, and Damages in Charterparty Disputes

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Delhi High Court recently delivered a significant judgment in the case between Steel Authority of India Limited (SAIL) and British Marine PLC, addressing complex issues of arbitration, contractual interpretation, and damages in the context of international shipping agreements. This article provides a comprehensive overview of the dispute, the legal arguments, and the broader implications for commercial contracts and arbitration in India.

    Background: The Contract and the Dispute

    1. Parties Involved:
      • SAIL: India’s largest steel producer, regularly importing coking coal for its operations.
      • British Marine PLC: An international ocean freight company specializing in bulk cargo shipping.
    2. The Contract:
      • In December 2007, SAIL (through Transchart, a government shipping agency) entered into a five-year Contract of Affreightment (COA) with British Marine for the shipment of 3 million metric tons (MT) of coking coal from Australia to India.
      • The contract included detailed clauses on vessel nomination, shipment schedules, force majeure, default, and arbitration.
    3. The Dispute:
      • Following the 2008 global financial crisis, SAIL’s demand for coking coal dropped, leading to reduced shipments.
      • SAIL eventually terminated the contract in 2012, citing force majeure and other operational difficulties.
      • British Marine claimed wrongful termination and sought damages for lost freight opportunities.

    Arbitration Proceedings

    • A three-member arbitral tribunal was constituted as per the contract’s arbitration clause.
    • British Marine claimed over $55 million in damages, while SAIL argued that the contract allowed termination without liability under certain conditions (notably, the Default Clause 62).
    • The tribunal ruled in favor of British Marine, awarding damages and interest.

    Key Legal Issues Examined

    1. Impartiality and Independence of Arbitrators

    • SAIL challenged the appointment of two arbitrators, alleging β€œissue conflict” because they had previously interpreted a similar contract clause in another arbitration involving SAIL.
    • The Court held that prior involvement in similar disputes does not automatically disqualify arbitrators unless there is concrete evidence of bias or lack of impartiality. The mere fact of having ruled on similar issues before, especially in specialized industries, is not sufficient for disqualification.

    2. Interpretation of the Default Clause (Clause 62)

    • SAIL argued that Clause 62 allowed it to terminate the contract without liability for any reason, including its own operational difficulties.
    • The tribunal and the Court disagreed, holding that the clause was intended for situations where the supplier (not SAIL itself) failed to provide material, or where performance was frustrated by events beyond control. Termination for reasons outside these specific grounds was not protected by the clause.

    3. Force Majeure

    • SAIL claimed that force majeure events (such as floods in Australia) justified non-performance and termination.
    • The Court found that SAIL did not properly invoke the force majeure clause as per contractual requirements (such as timely notice and supporting documentation), and in fact continued to perform parts of the contract after the alleged force majeure period.

    4. Damages and Proof of Loss

    • The tribunal awarded damages based on the difference between the contract freight rate and the spot market rate for similar shipments during the period of breach.
    • The Court upheld this approach, noting that British Marine had provided sufficient evidence of loss and that SAIL’s failure to declare shipment stems constituted a breach.
    • The Court also clarified that damages are not meant to provide a windfall, but to place the injured party in the position it would have been in had the contract been performed.

    5. Interest Awarded

    • SAIL objected to the tribunal’s award of interest at different rates for pre- and post-award periods.
    • The Court held that this was within the tribunal’s discretion and consistent with Indian arbitration law.

    Broader Implications

    • Arbitrator Selection: The judgment reinforces that expertise and prior experience in similar disputes do not, by themselves, disqualify arbitrators in specialized fields.
    • Contract Drafting: Parties must draft force majeure and default clauses with precision and follow procedural requirements strictly to rely on them in disputes.
    • Damages Calculation: The decision affirms the principle that damages should reflect actual loss, supported by market evidence, and that the burden of proof lies with the claimant.
    • Judicial Review of Arbitral Awards: The Court reiterated the limited scope for judicial interference in arbitral awards, especially in international commercial arbitration, unless there is patent illegality or violation of fundamental policy.

    Conclusion

    The Delhi High Court’s judgment in SAIL vs. British Marine PLC is a landmark in clarifying the interpretation of contractual clauses, the standards for arbitrator impartiality, and the calculation of damages in commercial disputes. It underscores the importance of clear contract drafting, adherence to procedural requirements, and the autonomy of arbitral tribunals in resolving complex commercial matters.

    Connected Matter

    Supreme Court Interprets Section 12(5) of Arbitration Act

    Source: Delhi High Court

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  • Delhi High Court on Anti-Arbitration Injunction in Maritime Dispute

    Delhi High Court on Anti-Arbitration Injunction in Maritime Dispute

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 24.07.2026

    Delhi High Court on Anti-Arbitration Injunction in Maritime Dispute

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    A significant judgment was delivered by the High Court of Delhi on March 13, 2026, in the case of SARR Freights Corporation & SARR Freights Limited v. Argo Coral Maritime Ltd. (CS(OS) 868/2025 & I.A. 30141/2025).

    The dispute revolved around the continuation of two parallel arbitration proceedings in London under the London Maritime Arbitrators Association (LMAA), arising from a charterparty agreement for the shipment of military cargo to Sudan. The plaintiffs sought to restrain the defendant from pursuing these arbitrations, raising complex questions of contract law, arbitration, and jurisdiction.

    Case Background

    • Parties:
      • Plaintiffs: SARR Freights Corporation & SARR Freights Limited (Indian logistics companies)
      • Defendant: Argo Coral Maritime Ltd. (Owner of vessel MV Panthera J)
    • Contract: Charterparty Agreement (Booking Note dated April 4, 2023) for transporting military equipment for the UN Peacekeeping Force in Sudan.
    • Dispute: Due to war in Sudan and a force majeure event, the UN terminated the purchase order, and the plaintiffs cancelled the Booking Note. The defendant claimed damages for ‘dead freight’ and initiated two arbitrations in London.
    • Relief Sought: Plaintiffs requested an injunction to restrain the defendant from continuing the London arbitrations, arguing lack of a valid arbitration agreement and privity of contract.

    Key Legal Issues and Principles

    1. Jurisdiction of Indian Civil Courts

    • Section 9, CPC: Civil courts have jurisdiction over all civil matters unless expressly or impliedly barred.
    • The court held that the choice of a foreign seat for arbitration does not automatically oust Indian courts’ jurisdiction, especially for anti-arbitration injunctions in exceptional cases (e.g., vexatious or oppressive proceedings).
    • Section 20(c), CPC: The court found that part of the cause of action arose in New Delhi, giving it territorial jurisdiction.

    2. Existence of a Binding Contract and Arbitration Clause

    • The court examined the Booking Note, Fixture Recap, and correspondence, concluding:
      • There was a valid contract between the parties, with the defendant as the owner of the performing vessel.
      • The arbitration clause, though not expressly included in the Special Terms of the Booking Note, was present in the Fixture Recap and incorporated by conduct and mutual intention.
      • The omission of the arbitration clause in the Booking Note was deemed an inadvertent error, not a deliberate exclusion.
      • Commercial contracts should be interpreted to give effect to the parties’ intentions and business efficacy.

    3. Principle of Kompetenz-Kompetenz

    • The court reaffirmed that questions regarding the validity or scope of the arbitration agreement are primarily for the arbitral tribunal to decide (Section 16, Arbitration Act).

    4. Anti-Arbitration Injunctions

    • Such injunctions are exceptional remedies, granted only if the arbitration agreement is null, void, inoperative, or incapable of being performed (Section 45, Arbitration Act).
    • The court found no evidence that the London arbitrations were vexatious, oppressive, or unconscionable.
    • The plaintiffs failed to establish exceptional circumstances warranting judicial intervention.

    5. Comity of Courts and Minimal Judicial Interference

    • The court emphasized respect for the agreed arbitral process and the principle of minimal judicial interference, especially in international commercial arbitration.

    Court’s Analysis and Findings

    • Jurisdiction: The court had territorial jurisdiction as substantial parts of the cause of action arose in New Delhi.
    • Contractual Relationship: There was privity of contract between the plaintiffs and the defendant, with the defendant being the owner of the performing vessel.
    • Arbitration Agreement: The arbitration clause was valid and binding, incorporated through the Fixture Recap and the parties’ conduct.
    • No Exceptional Circumstances: The plaintiffs could not prove that the arbitration proceedings were vexatious or oppressive. The court noted that the defendant’s initiation of two arbitrations was due to confusion over the correct contracting party, not procedural abuse.
    • Respect for Arbitral Process: The court reiterated that the arbitral tribunal is the proper forum to decide on its own jurisdiction and the validity of the arbitration agreement.

    Conclusion and Order

    • The Delhi High Court dismissed the plaintiffs’ application for an anti-arbitration injunction.
    • The court held that:
      • There is a valid arbitration agreement between the parties.
      • The court has jurisdiction but finds no exceptional grounds to restrain the London arbitration.
      • The merits of the underlying commercial dispute remain to be adjudicated in the appropriate forum.

    Legal Significance

    This judgment reinforces several key principles in Indian arbitration law:

    1. Autonomy of Arbitration Agreements: Courts will uphold the parties’ choice to arbitrate, especially in international commercial contracts.
    2. Limited Grounds for Judicial Intervention: Anti-arbitration injunctions are rare and require clear evidence of nullity, inoperability, or incapacity of the arbitration agreement.
    3. Business Efficacy and Intent: Commercial contracts are interpreted to give effect to the parties’ intentions, even if there are drafting errors.
    4. Respect for Arbitral Tribunals: The principle of Kompetenz-Kompetenz ensures that arbitral tribunals have the first say on their own jurisdiction.

    Case Details at a Glance

    • Court: High Court of Delhi at New Delhi
    • Case Number: CS(OS) 868/2025 & I.A. 30141/2025
    • Order Date: March 13, 2026
    • Parties: SARR Freights Corporation & SARR Freights Limited (Plaintiffs) vs. Argo Coral Maritime Ltd. (Defendant)
    • Presiding Judge: Hon’ble Ms. Justice Mini Pushkarna

    This decision is a notable precedent for parties involved in international commercial arbitration, especially in the shipping and logistics sector, and clarifies the Indian judiciary’s approach to anti-arbitration injunctions.

    Source: Delhi High Court

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  • Enforcement of Foreign Arbitral Awards under the Arbitration & Conciliation Act, 1996

    Enforcement of Foreign Arbitral Awards under the Arbitration & Conciliation Act, 1996

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.07.2026

    Enforcement of Foreign Arbitral Awards under the Arbitration & Conciliation Act, 1996

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    This case is a significant milestone in the Indian legal landscape regarding the enforcement of foreign arbitral awards under the Arbitration & Conciliation Act, 1996. The judgment clarifies the obligations of Indian courts when faced with objections to the enforcement of such awards and reinforces India’s pro-enforcement stance in line with international conventions.

    Factual Background

    Naval Gent Maritime Limited, the Decree Holder, sought enforcement of a foreign arbitral award dated 22 January 2001 against Shivnath Rai Harnarain (I) Ltd. The award was made in England under a Charter Party Agreement containing an arbitration clause. The Decree Holder submitted all required documents, including a certified copy of the award, the arbitration agreement, and proof that no appeal was filed in England.

    The Judgment Debtor appeared in court but failed to file a formal response or objections under Section 48 of the Arbitration & Conciliation Act, 1996, despite multiple opportunities. The matter proceeded to arguments on enforceability.

    Key Legal Issues Raised

    1. Binding Nature of the Award: The Judgment Debtor argued that the award was not binding under English law (Section 66 of the English Arbitration Act, 1996) and thus not enforceable in India.
    2. Public Policy Objection: It was contended that the award was contrary to Indian public policy, as the contract was allegedly executed under duress.
    3. Stamping and Registration: The Judgment Debtor claimed the award was not stamped as per Indian law and thus unenforceable.

    Court’s Analysis and Findings

    1. Binding Nature of the Award

    The court held that the enforceability of a foreign award in India is governed by Indian law, not the procedural requirements of the country where the award was made. Since the award was not challenged in England and the limitation period for appeal had expired, the award was deemed binding. Section 66 of the English Arbitration Act was found irrelevant for enforcement proceedings in India.

    2. Public Policy Exception

    The court examined the arbitrator’s findings on the alleged duress. The arbitrator had considered the evidence and concluded that while there was commercial pressure, it did not amount to legal duress sufficient to void the contract. The court emphasized that it cannot re-examine the arbitrator’s factual findings and that the public policy exception under Section 48(2) is to be narrowly construed.

    3. Stamping and Registration

    Relying on Supreme Court precedents, the court clarified that foreign awards do not require stamping or registration under Indian law for enforcement. The objections based on non-stamping were rejected.

    Legal Principles Established

    • Enforcement of Foreign Awards: Indian courts must enforce foreign arbitral awards if the requirements of Sections 47 and 48 of the Arbitration & Conciliation Act, 1996 are met.
    • Limited Grounds for Refusal: Refusal to enforce can only be based on specific grounds enumerated in Section 48, such as incapacity, invalid agreement, lack of proper notice, or violation of public policy.
    • No Re-examination of Merits: Courts cannot sit in appeal over the arbitrator’s findings on facts or law, especially on mixed questions like duress.
    • No Requirement for Stamping/Registration: Foreign awards are not subject to Indian stamp or registration laws for enforcement purposes.

    Outcome

    The High Court of Delhi held the foreign award executable in India. The Decree Holder was permitted to encash the bank guarantee and pursue further execution if necessary.

    Significance

    This judgment strengthens India’s reputation as an arbitration-friendly jurisdiction and provides clarity on the enforcement of foreign arbitral awards. It limits the scope for challenging such awards, ensuring that India remains compliant with its international obligations under the New York Convention.

    This case serves as a reference point for parties seeking to enforce foreign arbitral awards in India, highlighting the limited and well-defined grounds on which enforcement can be resisted.

    Source: Delhi High Court

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  • Supreme Court Clarifies Scope of ‘Change in Law’ Clauses in Arbitration

    Supreme Court Clarifies Scope of ‘Change in Law’ Clauses in Arbitration

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 22.07.2026

    Supreme Court Clarifies Scope of ‘Change in Law’ Clauses in Arbitration

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    This article provides a comprehensive analysis of the Supreme Court of India’s judgment in the contractual dispute between South East Asia Marine Engineering and Constructions Ltd. (SEAMEC Ltd.) and Oil India Limited. The case is significant for its interpretation of arbitration awards, contract clauses, and the scope of judicial review under Indian arbitration law.

    Background of the Dispute

    1. Contract Overview
      • SEAMEC Ltd. was awarded a contract by Oil India Limited in 1995 for well drilling and auxiliary operations in Assam.
      • The contract, initially for two years, was extended twice and expired in October 2000.
    2. Trigger for Dispute
      • During the contract, the price of High-Speed Diesel (HSD), essential for drilling, increased.
      • SEAMEC Ltd. claimed that this price hike triggered the “change in law” clause (Clause 23) of the contract, seeking reimbursement from Oil India Limited.
      • Oil India Limited rejected the claim, leading SEAMEC Ltd. to invoke arbitration.

    Arbitration and Legal Proceedings

    1. Arbitral Tribunal Award
      • The Tribunal, by majority, awarded SEAMEC Ltd. compensation for the increased HSD cost, interpreting government price circulars as having the “force of law” under Clause 23.
      • The minority disagreed, stating executive orders do not qualify as a change in law under the contract.
    2. Judicial Challenges
      • Oil India Limited challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996.
      • The District Judge upheld the award, but the Gauhati High Court set it aside, holding the Tribunal’s interpretation was against public policy and the contract’s terms.
      • SEAMEC Ltd. appealed to the Supreme Court.

    Key Legal Issues Examined

    1. Scope of Judicial Review under Section 34

    • The Supreme Court reiterated that courts can set aside arbitral awards only on specific grounds under Section 34, such as violation of public policy or patent illegality.
    • Courts should not interfere with an arbitrator’s plausible interpretation unless it is perverse or unreasonable.

    2. Interpretation of Clause 23 – Change in Law

    • Clause 23: Provided for reimbursement if a change in law after bid opening resulted in additional costs.
    • The Tribunal adopted a liberal interpretation, including government circulars as “law.”
    • The High Court viewed Clause 23 as akin to a force majeure clause, meant for unforeseen legal changes, not price revisions.
    • The Supreme Court found neither interpretation fully satisfactory but emphasized that contract clauses must be read as a whole and in context.

    3. Fixed-Rate Contract and Risk Allocation

    • The contract was based on fixed rates, with the contractor responsible for fuel costs.
    • The Court held that normal price fluctuations, unless specifically covered, are not grounds for reimbursement under Clause 23.
    • The Tribunal’s broad interpretation was found unsustainable as it would defeat the contract’s risk allocation.

    Supreme Court’s Decision and Reasoning

    • The Supreme Court upheld the High Court’s decision to set aside the arbitral award.
    • It clarified that:
      1. The Tribunal failed to interpret Clause 23 in harmony with the contract’s overall structure and intent.
      2. The contract’s fixed-rate nature and explicit clauses on fuel costs indicated that price increases were not meant to be reimbursed under “change in law.”
      3. Liberal interpretation cannot override clear contractual terms and risk allocation.

    Implications of the Judgment

    1. Contract Interpretation
      • Courts and tribunals must interpret contract clauses in context, respecting the parties’ risk allocation and commercial intent.
    2. Arbitration Awards
      • Judicial interference is limited, but awards that ignore clear contract terms or public policy can be set aside.
    3. Risk Management in Contracts
      • Parties should clearly define risk-sharing mechanisms and the scope of “change in law” clauses to avoid disputes.

    Conclusion

    The SEAMEC Ltd. vs. Oil India Limited judgment reinforces the importance of precise contract drafting and the limited scope of judicial review in arbitration. It serves as a guide for businesses and legal professionals on interpreting change in law clauses and managing contractual risks in India.

    Source: Supreme Court

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  • Supreme Court on the Arbitration & Conciliation Act, 1996 (A&C)

    Supreme Court on the Arbitration & Conciliation Act, 1996 (A&C)

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 08.11.2025

    Supreme Court on the Arbitration & Conciliation Act, 1996 (A&C)

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Recent Landmarks, Contract Act interplay, and what they mean for commercial arbitration ​

    1) The statutory frame (A&C Act Γ— Contract Act)

    • Consent & separability. Arbitration rests on contract formation under the Indian Contract Act, 1872 (offer/acceptance, free consent, lawful object/consideration). The arbitration clause is separable from the underlying contract (A&C s.16); even when the main contract is challenged, the clause can survive.
    • Party autonomy, neutrality, minimal court intervention. A&C ss.5, 7, 8, 11, 12, 18, 34, 37; the 2015/2019/2021 amendments tightened neutrality (s.12(5)), nudged institutional appointments (s.11), narrowed β€œpublic policy” and β€œpatent illegality” review (s.34), and introduced a fraud/corruption stay to enforcement (s.36(3) proviso, 2021).
    • Contract Act β€œfilters”. Clauses that are unconscionable or in restraint of legal proceedings (s.23/s.28) are policed through A&C provisions on equal treatment (s.18) and independence (s.12). The Court now reads constitutional equality into appointment schemes in standard-form public contracts.

    2) Landmark Supreme Court judgments (late-2023 to 2025)

    A. 7-Judge Bench β€” In Re: Interplay between Arbitration Agreements under the A&C Act, 1996 and the Indian Stamp Act, 1899 (13 Dec 2023)

    Issue. Is an arbitration clause in an unstamped/insufficiently stamped agreement void/inoperative at the pre-referral stage?
    Held. Not void ab initio. Non-stamping affects admissibility, not existence/validity of the arbitration agreement. Courts at s.8/s.11 stage should ordinarily refer to arbitration; any stamp duty objection can be cured in the arbitral process. This overruled N.N. Global (2023).
    Arguments noted. Parties relying on Contract Act theory of consensual bargain + separability urged that stamping is a fiscal curable defect; the opposing side pressed β€œno contract without stamp”.
    Principles. (i) separability; (ii) kompetenz-kompetenz; (iii) pro-arbitration minimal judicial review at referral stage.
    Commercial impact. No more pre-arbitration derailments on technical stamp objections; faster references and lower front-end risk.

    B. Constitution Bench β€” Cox & Kings Ltd v SAP India Pvt Ltd (6 Dec 2023): Group of Companies doctrine (GoC)

    Issue. Can non-signatory affiliates be bound to arbitration by conduct/participation in a single economic transaction?
    Held. Yes, in limited circumstances. The Court clarified and affirmed the GoC doctrine: look at common intention, participation in negotiation/performance, composite transaction, and mutuality of claims. Not a back-door to rope in every affiliate; it’s a fact-intensive inquiry.
    Arguments. Pro-GoC: modern commerce uses multi-entity structures; consent can be inferred from conduct. Anti-GoC: Contract Act requires privity/express assent.
    Principles. Consent remains the lodestar; Contract Act privity yields where objective indicia of consent exist.
    Impact. Better alignment of multi-party disputes with a single forum, fewer parallel litigations.

    C. Five-Judge Bench β€” Unilateral appointments & curated panels (8 Nov 2024; 2024 INSC 857)

    Issue. Are clauses letting one party (often a PSU) unilaterally appoint the sole arbitrator or restrict the other party to a curated panel valid?
    Held. No. The Court reaffirmed TRF/Perkins and disapproved Voestalpine/CORE to the extent they enabled one-sided control. Such clauses offend equality (A&C s.18) and independence (s.12(5)), and may be unconscionable under Contract Act s.23.
    Arguments.

    • Challengers: one-sided curation breeds bias; equality must exist at appointment.
    • Defenders: party autonomy permits agreed procedures; state needs vetted panels.
      Principles. Procedural equality and neutrality are non-derogable; waiver only post-dispute (s.12(5) proviso).
      Impact. Standard PSU/SoE clauses need re-drafting; expect more court-appointed neutrals or truly joint panel mechanisms.

    D. Section 34: set-aside, severance & limited β€œmodification” themes β€” Gayatri Balasamy v ISG Novasoft Technologies Ltd & batch (30 Apr 2025)

    Questions. Scope of s.34 intervention; can courts partially set aside (sever), correct clerical/computational errors, and adjust post-award interest without re-writing merits?
    What the Court did.

    • Re-maps s.34: public policy confined; patent illegality for domestic awards only; no merits re-appreciation.
    • Severance is intrinsic to s.34(2)(a)(iv) proviso β€” courts may excise only the bad part and preserve the rest.
    • Recognizes a narrow window to correct clerical/computational errors and, in limited circumstances, to recalibrate post-award interest while remaining within s.34 guardrailsβ€”without converting s.34 into an appellate re-hearing.
      Arguments.
    • For a wider power: β€œthe greater power to set aside includes the lesser to vary”; comparative seats allow calibrated fixes.
    • Against: Project Director, NHAI v M. Hakeem (2021) disallowed modification; only legislature can expand remedies.
      Takeaway. Courts cannot re-adjudicate, but may sever invalid portions and make limited corrections that keep within s.34’s text (not a merits review). Useful in construction/infra awards with multiple segregable claims.

    3) How these rulings interlock with the Contract Act in commercial disputes

    • Consent & privity (ss.10, 13–19, 23). Cox & Kings aligns modern privity analysis with objective consent across a composite commercial matrix; affiliates who negotiated/performed or benefitted can’t later plead non-signatory status when the facts show assent by conduct.
    • Unconscionability/public policy (s.23). The 2024 Constitution Bench grounds neutral appointments in equality and public policy; boilerplate β€œsole arbitrator by employer/PSU” provisions risk invalidation as procedurally unconscionable.
    • Illegality/fraud (ss.23, 17). The 2021 amendment to s.36(3) A&C permits automatic stay of enforcement if the arbitration agreement/contract/award appears induced by fraud/corruptionβ€”a direct cross-over from Contract Act invalidating factors into the enforcement stage.
    • Stamping is not contract-killing. The 7-Judge ruling treats stamping as a curable admissibility issue, preventing Contract Act β€œexistence” objections from being misused to stall references.

    4) Practical drafting & litigation playbook (post-2023)

    1. Appointment clauses. Avoid one-party curation or unilateral appointment. Provide joint nomination or neutral institution with open panels. Cite s.12(5)/s.18; anything else risks being struck down.
    2. Stamping hygiene. Don’t panic at referral: proceed to arbitration and cure stamping as directed; don’t burn time at s.11 on fiscal technicalities.
    3. Multi-party deals. If affiliates are integral to negotiation/performance, record their role; that evidence supports GoC joinder later.
    4. Section 34 strategy. Frame challenges narrowly: target jurisdictional overreach or non-arbitrable slices, seek severance of the bad portion, and limit prayer to clerical/interest corrections where appropriateβ€”do not invite re-hearing on facts.

    5) One-page case synopses (for ready citation)

    (i) 7-JB Stamping β€” In Re: Interplay… (2023)

    Summary. Unstamped/under-stamped agreements do not kill arbitration clauses; referral courts should not conduct mini-trials on stamp duty. Stamp issues can be addressed after reference.
    Ruling. Referral allowed; earlier contrary view overruled.
    Key law. A&C ss.8, 11, 16; Stamp Act; separability/kompetenz.

    (ii) Group of Companies β€” Cox & Kings v SAP India (2023)

    Summary. Clarifies when non-signatories can be bound: intention, participation, composite transaction, interdependence of agreements.
    Ruling. GoC affirmed; fact-intensive consent test.
    Key law. A&C s.7; Contract Act consent doctrines.

    (iii) Unilateral appointment/panels β€” Constitution Bench (2024 INSC 857)

    Summary. Unilateral appointment or one-sided curated panels violate equality (s.18) and independence (s.12(5)); ties into Contract Act s.23 unconscionability.
    Ruling. Such clauses impermissible; TRF/Perkins reaffirmed; contrary strands disapproved.
    Key law. A&C ss.11, 12(5), 18, Fifth/Seventh Schedules; Art.14.

    (iv) Section 34 mapping β€” Gayatri Balasamy v ISG Novasoft & batch (2025)

    Summary. Re-states narrow s.34 review; permits severance of invalid portions (s.34(2)(a)(iv) proviso), clarifies limited clerical/computation fixes and tailored post-award interest adjustments, without merits re-appreciation.
    Ruling. Severance and limited corrections allowed; no appellate rehearing.
    Key law. A&C ss.31, 33, 34, 37, 43; Ssangyong line preserved.

    6) Legislative touchpoints to keep in view

    • 2015 (Act 3 of 2016): neutrality via s.12(5) (Seventh Schedule), narrowed public policy, patent illegality ground for domestic awards.
    • 2019: institutional appointments (s.11 route), timelines refined.
    • 2021: s.36(3) provisoβ€”automatic stay where prima facie fraud/corruption taints the agreement/contract/award. These provisions colour s.8/s.11 referrals and s.34/s.36 enforcement arguments.

    Bottom line for commercial arbitration

    The Court has de-clogged referrals (stamping), modernised consent analysis (GoC), insisted on neutral appointments (no unilateral/panel strangleholds), and stabilised s.34 practice (sever the bad; correct the obvious; do not retry the case). Draft your clauses to share appointment power, anticipate multi-entity realities, and litigate s.34 with surgical precision.

    References (primary):

    • In Re: Interplay between Arbitration Agreements… (7-JB, 13 Dec 2023).
    • Cox & Kings Ltd v SAP India Pvt Ltd (CB, 6 Dec 2023).
    • Constitution Bench on unilateral appointments & curated panels (8 Nov 2024; 2024 INSC 857).
    • Gayatri Balasamy v ISG Novasoft Technologies Ltd & batch (30 Apr 2025) β€” s.34/severance/limited corrections.

    Source: Supreme Court

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  • Supreme Court Constitution Bench Affirms Limited Court Power to Modify Arbitral Awards Under Section 34 of Arbitration Act based on Severability Doctrine

    Supreme Court Constitution Bench Affirms Limited Court Power to Modify Arbitral Awards Under Section 34 of Arbitration Act based on Severability Doctrine

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 01.05.2025

    Supreme Court Constitution Bench Affirms Limited Court Power to Modify Arbitral Awards Under Section 34 of Arbitration Act based on Severability Doctrine

    In a landmark Constitution Bench judgment dated 30 April 2025 (Gayatri Balasamy vs. ISG Novasoft Technologies Ltd., 2025 INSC 605), the Supreme Court of India has decisively held that Indian courts possess a limited power to modify arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996.

    Key Takeaways from the Judgment:

    1. Recognition of Limited Modification Power

    The court affirmed that while Section 34 does not explicitly provide for modification, courts can:

    • Modify an award if the invalid portion is severable from the valid portion.
    • Correct clerical, typographical, or computational errors.
    • Adjust post-award interest, as prescribed under Section 31(7)(b).
    • Exercise modification under Article 142 of the Constitution in rare cases to do complete justice.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: Supreme Court

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  • CESTAT Kolkata emphasized that minor administrative errors without dishonest intent should not result in penal consequences

    CESTAT Kolkata emphasized that minor administrative errors without dishonest intent should not result in penal consequences

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 28.04.2025

    CESTAT Kolkata emphasized that minor administrative errors without dishonest intent should not result in penal consequences

    The Eastern Zonal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, delivered an important ruling on 17th April 2025, dismissing an appeal filed by the Revenue against M/s. Nalini Bandhu Ray & Sons, a licensed Customs Broker.

    Case Background:

    • M/s. Nalini Bandhu Ray & Sons filed a Bill of Entry for the importer M/s Lalwani Ferro Alloys based on instructions and documentation provided by their client.
    • Later, it emerged that the consignee name had been changed by the overseas supplier to M/s QVC International Pvt. Ltd., but this change was not communicated to the Customs Broker.
    • The Revenue alleged a violation of Regulation 10(e) of the Customs Broker Licensing Regulations, 2018 for failing to exercise due diligence.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.comΒ or on his Mobile +91-9999005379.

    Source: CESTAT Kolkata

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  • CESTAT Hyderabad Upholds IGST Refund Claim Despite Delay

    CESTAT Hyderabad Upholds IGST Refund Claim Despite Delay

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 28.04.2025

    CESTAT Hyderabad Upholds IGST Refund Claim Despite Delay

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad, in Final Order Nos. A/30134-30135/2025 dated 24th April 2025, delivered a significant ruling favoring M/s Shabeer Enterprises concerning refund of Integrated Goods and Services Tax (IGST) paid on re-exported goods.

    Case Background:

    • M/s Shabeer Enterprises imported 18.030 metric tons of Sri Lankan Areca Nuts through Krishnapatnam Port.
    • The goods failed quality standards under the Food Safety and Standards (Food Products Standards & Food Additives) Regulation, 2011, leading to a re-export order dated 30.09.2021.
    • IGST of Rs.2,82,808/- was paid on 31.03.2021.
    • The appellant filed a refund application for the IGST amount on 12.04.2022.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Hyderabad

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  • CESTAT Allahabad Quashes Gold Confiscation Orders of Customs

    CESTAT Allahabad Quashes Gold Confiscation Orders of Customs

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 28.04.2025

    CESTAT Allahabad Quashes Gold Confiscation Orders of Customs

    The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Allahabad, in its Final Order Nos. 70205-70210/2025 dated 24th April 2025, allowed multiple appeals against the confiscation of nearly 4 kilograms of gold and penalties imposed by the Commissioner, Customs (Preventive), Lucknow.

    Key Background:

    • Gold weighing 3998.83 grams valued at approximately Rs. 2.12 crore was seized from two individuals traveling by bus from Gorakhpur to Delhi.
    • The seizure was made on a “reasonable belief” of smuggling under Section 110 of the Customs Act, 1962.
    • Penalties were imposed under Section 112 of the Customs Act, 1962 against six individuals including employees of M/s Bajrang Bullion Traders.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.comΒ or on his Mobile +91-9999005379.

    Source: CESTAT Allahabad

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  • CESTAT New Delhi Reinforces that interest in delayed IGST payments must be computed using CGST framework provisions, not the customs law

    CESTAT New Delhi Reinforces that interest in delayed IGST payments must be computed using CGST framework provisions, not the customs law

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 18.4.2025

    CESTAT New Delhi Reinforces that interest in delayed IGST payments must be computed using CGST framework provisions, not the customs law

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, recently delivered a significant judgment in the case of M/s JLC Electromet Private Limited vs. Commissioner of Customs, Jodhpur. ​ This decision sheds light on the nuanced distinction between Integrated Goods and Services Tax (IGST) and Additional Duty of Customs, as well as the applicability of interest on delayed IGST payments. ​ Let’s dive into the details of this case and its implications.

    Background of the Case

    The appellant, M/s JLC Electromet Pvt. ​ Ltd., imported goods under 13 Advance Authorizations, availing exemptions from Basic Customs Duty (BCD) and IGST. ​ However, the Directorate General of Revenue Intelligence (DRI) found that the exemption from IGST was incorrectly claimed, as the appellant did not fulfill the “actual user” condition required under the scheme. ​ Upon being notified, the appellant paid the IGST along with interest.

    The dispute arose over the interest payment. ​ The appellant argued that IGST, being an Additional Duty of Customs, should not attract interest under the provisions of the Customs Act, citing precedents from the Bombay High Court and the Supreme Court. ​ The Commissioner of Customs, however, appropriated the interest paid by the appellant, leading to this appeal.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT New Delhi

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