Dispute Resolution & Arbitration Monthly Update | January 2026

Indian Institute of Technology, Mandi Vs. C.P.W.D & Anr

2025:HHC:45660

Background facts

• The Respondents, Central Public Works Department (Respondent No. 1) and M/s. Supreme Infrastructure India Limited (Respondent No. 2), are parties in an ongoing arbitration. The Petitioner had filed an application before the Ld. Arbitrator to be impleaded as a respondent in the said arbitration. The said application was rejected by the Ld. Arbitrator vide their order dated 18th April 2025 ('Impugned Order'). In the instant case, the Petitioner is challenging the Impugned Order.
• A Memorandum of Understanding ('MOU') was executed on 25^th August 2011 between Petitioner and Respondent No. 1 whereby the Respondent No. 1 was to carry out construction work of academic and residential complex for the Petitioner. Clause 8 of the MOU states that the disputes between the parties will be referred to arbitration.
• Respondent No. 1 floated tenders for engaging contractors to perform the said construction work and Respondent No. 2's bid was accepted on 25^th October 2013. Pursuant to such acceptance, an agreement was executed between the Respondents ('Agreement') containing the terms and conditions for the work. The said Agreement also provided for disputes to be resolved by arbitration.
• Accordingly, when disputes arose between the Respondents, Respondent No. 2 initiated arbitration proceedings against Respondent No. 2. Thereafter, as the proceedings were enduring, the Petitioner filed the application for being joined as a respondent. In the application, it was contended that the Petitioner was a necessary party and had substantial interest in completion of the project. Any award against Respondent No. 1 would impact the Petitioner, therefore they had a direct interest in the arbitration. Respondent No.2 on the other had opposed the application inter alia on the grounds that the Petitioner was neither a party nor privy to the Agreement between the Respondents and that the Petitioner was a separate entity and had not played any direct or important role in the negotiation, performance or termination of the Agreement so it was not eligible to invoke the Group Company Doctrine.
• Vide the Impugned Order, the Ld. Arbitrator found that the Petitioner did not meet the criteria necessary for a non-signatory to be added as a party and rejected their application.

Issue(s) at hand

• Whether a non-signatory can be impleaded as a party to an arbitration solely on the ground that they have a substantial interest in the outcome of the arbitration?

Findings of the Court

• With respect to the Impugned Order, the Hon'ble Court was pleased to observe, that whilst accepting that non-signatories may be made as parties to an arbitration, the Impugned Order clarified that such addition would depend on the facts of each case. In this case, the Ld. Arbitrator rejected the reliefs sought by the Petitioner inter alia on the grounds that: principles of a civil suit and Order 1 Rule 10 of Code of Civil Procedure, 1908 do not apply to an arbitration, there was nothing to show that Respondent No. 1 wouldn't sufficiently defend their own and Petitioner's interests, and, the Petitioner had no role in execution of the project or agreement between the Respondents. Therefore, mere substantial interest in subject matter of the arbitration was not enough to extend the benefit of arbitration agreement. The consent as well as intention to participate in an arbitration must exist at inception or atleast initial stages of the contract.
• The MOU and Agreement are two distinct and independent contracts. Petitioner is not a signatory to the Agreement and Respondent No. 2 is not a signatory to MOU. Arbitration has been invoked based on the Agreement and therefore the relationship of the Petitioner with such Agreement had to be considered.
• The Hon'ble Court referred extensively to Cox and Kings Limited v. Sap India Private Limited and Anr.¹ and ASF Buildtech (P) Limited v. Shapoorji Palonji & Co. (P.) Ltd.² to discuss the law relating to joining non-signatories to an arbitration. It was then reiterated that the intention of a non-signatory to be obligated under an arbitration agreement may be gathered from the circumstances and events encompassing participation of the non-signatory parties in 'negotiation, performance and termination of the underlying contract containing such Agreement'. Circumstances such as preliminary negotiations between the parties, conduct of parties subsequent to conclusion of contract and nature or purpose of contract, may be considered to ascertain relevant intentions.
• In the present case, the Petitioner was neither conferred with nor otherwise concerned with the performance of the Agreement between Respondents. Even prior to the contract, the Petitioner was not involved in its negotiation.
• The apprehensions of Petitioner that any award against Respondent No. 1 would embolden any liability on them are also unjustified. The Agreement has no such terms and conditions where Petitioner would be made responsible for any award against Respondent No. 1.
• Even if Petitioner has substantial interest in the subject matter of the arbitration, it had failed to meet any of the criteria laid down in the Cox and King or ASF Buildtech judgments, and therefore, could not be impleaded as a party.
• In view of the above, the Hon'ble Court agreed with the reasoning of the Ld. Arbitrator and found there was no reason to interfere with the Impugned Order.

Footnotes

1 (2024) 4 SCC 1

2 2025) 9 SCC 176

SAP India Private Limited & Anr. Vs. Cox and Kings Ltd.

2025: BHC-OS:26014-DB

Background facts

• Petitioner No. 1 and Respondent executed three interconnected agreements in 2015 namely the SAP Software and License Support Agreement – Order Form 3 ("License Agreement"), the Services General Terms and Conditions Agreement ("GTC"), and the SAP Global Service and Support Agreement - Order Form 1 ("Services Agreement").
• Disputes arose under the Services Agreement, leading the Petitioner No. 1 to invoke arbitration under GTC. Pursuant to an application under section 11 of the Arbitration and Conciliation Act, 1996 ("the Act"), an Arbitral Tribunal was constituted. In the said arbitration, the Petitioner No. 1 (as Claimant therein) sought approximately ₹17 crores, while Respondent (also Respondent therein) filed a counter-claim of ₹45.99 crores.
• The Petitioners challenged the jurisdiction of the Arbitral Tribunal under Section 16 of the Act, to hear the counter-claim, contending that the same arose from the License Agreement and the Tribunal could only adjudicate claims under Services Agreement. The License Agreement had its own separate and independent arbitration clause and mechanism which had not been invoked by the Respondent.
• Before the said section 16 application could be decided, the Respondent was admitted into Corporate Insolvency Resolution Process by an order dated 22^nd October 2019, triggering a moratorium under Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016. In view of the moratorium, the arbitration proceedings were adjourned sine die on 5^th November 2019.
• On 7^th November 2019, the Respondent, through its Interim Resolution Professional, invoked arbitration afresh under the GTC and made claims aggregating to ₹942.45 crores. The Petitioners challenged the invocation of arbitration. By an order dated 9^th September 2024, the Hon'ble Supreme Court, appointed an Arbitral Tribunal while expressly preserving the Petitioners' right to raise jurisdictional objections before the said Tribunal.
• On 11^th October 2019, the Respondent (as Claimant therein), filed a claim for ₹45.99 crores, which the Petitioners (as Respondents therein). The Respondent thereafter filed two applications under Section 16 of the Act, alleging lack of jurisdiction and challenging the Respondent's claims as being identical to their original counter claim (as filed in the first arbitration). Both applications were rejected by the Ld. Arbitrator by their orders dated 31^st March 2025 and 10^th November 2025 ("Impugned Orders").
• The Petitioners have filed the present writ petition under Articles 226 and 227 of the Constitution, seeking to set aside the Impugned Orders on the ground of patent lack of inherent jurisdiction.

Issue(s) at hand?

• Whether the Hon'ble High Court can interfere under Articles 226/227 with interlocutory orders passed by an arbitral tribunal under Section 16 of the Act?
• Whether the arbitral tribunal had ex-facie exceeded its jurisdiction by entertaining claims allegedly arising from a different agreement with a separate arbitration framework?
• Whether the doctrine of composite commercial transactions justified the tribunal's assumption of jurisdiction over disputes arising from all three agreements?

Findings of the Court

• The Bombay High Court reiterated that writ jurisdiction to interfere with arbitral orders is extremely limited, and permissible only in rare and exceptional cases of patent illegality, perversity, or inherent lack of jurisdiction apparent on the face of the record. The precedents relied upon by the Petitioners including Punjab State Power Corpn. Ltd. v. Emta Coal Limited¹ and Deep Industries Ltd. v. ONGC² also confirm the said principles.
• The Court noted that the Arbitral Tribunal had examined the contractual framework and recorded a finding that the Services Agreement, License Agreement, and GTC formed a composite and integrated transaction governing the parties' relationship. The Arbitral Tribunal had also based this finding by citing and relying on Ameet Lalchand Shah v. Rishabh Enterprises³ . Having found no infirmity with the Arbitral Tribunal's reasoning or inquiry, at this interlocutory stage, and in the absence of a final award, the Court held that it could not be concluded that the Arbitral Tribunal had acted wholly without jurisdiction or committed patent illegality. Accordingly, the writ petition was dismissed. 

Footnotes

1 (2020) 17 SCC 93

2 (2020) 15 SCC 706

3 (2018) 15 SCC 678

M/S Inderjit Mehta Constructions Pvt Ltd. Vs. Union of India 

O.M.P.(T)(COMM.)133/2025 and IA 30641/2025

Background facts

• M/S Inderjit Mehta Constructions Pvt Ltd ("Petitioner") was awarded a contract by the Union of India ("Respondent") for competition of balance for construction of dwelling units and allied services at Kirkee.
• Disputes arose between the Petitioner and Respondent under the contract, following which the petitioner invoked arbitration by sending Notice under section 21 of the Arbitration and conciliation act 1996 ("Act").
• Since the Respondent failed to reply to the Notice sent by the Petitioner for appointment of a Sole Arbitrator, the Petitioner was constrained to the Hon'ble Court for appointment of a Sole Arbitrator.
• Accordingly, this Hon'ble Court vide its order dated January 24^th, 2000, appointed Mr. K.B. Rai as the Sole Arbitrator to adjudicate the dispute between the Petitioner and the Respondent.
• On March 4^th, 2021, Mr. K.B. Rai passed away and subsequently on a Petition being filed by the Petitioner this Hon'ble Court appointed Justice Vikramjit Sen former judge of Supreme Court of India as the Sole Arbitrator to adjudicate the disputes between the Petitioner and Respondent in December 2021.
• The mandate of the Sole Arbitrator i.e. Justice Vikramjit Sen former judge of Supreme Court of India was to expire on July 27^th, 2023, after excluding the period covered by the suo motu orders of the Supreme Court on account of COVID-19.
• The arbitration proceedings progressed at a slow pace due to issues relating to deposit of arbitral fees and etc. and hence the mandate of the Arbitrator was extended multiple times by the Hon'ble Court.
• On July 6^th, 2024, the Sole Arbitrator heard the final arguments and reserved the matter for passing of award.
• However, the Sole Arbitrator didn't pass any awards thereafter and accordingly extension was sought for extending the mandate of the Arbitrator.
• In view of the above, this Hon'ble Court extended the mandate of the Arbitrator till September 30^th 2025.
• However, since the Sole Arbitrator didn't pronounce any award till September 30th, 2025, the Petitioner filed the present Petition under Section 14, 15(2) read with Section 11(6) of the Act seeking substitution of the Sole Arbitrator and other consequential relief.
• The Respondent filed the present Interim Application seeking extension of the mandate of the Sole Arbitrator on the ground that the Sole Arbitrator vide email dated November 15^th 2025 has intimated that the award was ready for pronouncement.

Issue(s) at hand?

• Whether the expiry of the mandate of the Sole Arbitrator by efflux of time necessitates substitution, or whether a further extension can be granted in view of the award being ready for pronouncement?

Findings of the Court

• The Hon'ble Court held that the judgment relied upon by the Petitioner in the case of Mohan Lal Fatehpuria vs. M/s Bharat Textiles & Ors.¹ ("Mohan Lal Fatehpuria") is not applicable to the facts of the present case, as, unlike in Mohan Lal Fatehpuria, the Sole Arbitrator in the present case has already concluded the arbitral proceedings and has expressly communicated that the arbitral award is ready for pronouncement.
• The Hon'ble Court further applied the principle laid down in the case of Rohan Builders (India) Private Limited vs. Berger Paints India Limited² , where the Supreme Court held that the termination of mandate under section 29A(4) is not absolute and can be regularised by the court to preserve party autonomy and avoid wastage of effort.
• The Hon'ble Court held that substantial judicial time and effort had already been invested in the matter, and that the email dated November 15^th , 2025, unequivocally demonstrated that the arbitral proceedings had reached their terminal stage. The Hon'ble Court observed that directing substitution of the Arbitrator at such an advanced stage would result in needless duplication of effort and further delay, thereby defeating the legislative objective of expeditious dispute resolution embodied in the Act.
• In the above circumstances, the Hon'ble Court finally held that the balance of convenience lay in granting a limited extension of the Arbitrator's mandate to facilitate pronouncement of the award, rather than unsettling the proceedings by ordering substitution of the Arbitrator at the final stage.
• Accordingly, the Hon'ble Court extended the mandate of the Arbitral Tribunal till January 31^st 2026 for facilitating pronouncement of award and made it clear that no further extensions will be granted.
• In view of the same, the Interim Application was allowed and the Petition field by the Petitioner was rejected.

Footnotes

1SLP (C) No.13759/2025

22024 SCC OnLine SC 2494

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