Arbitration Updates (April 2026)

NOTABLE JUDGMENTS APRIL 2026

1. Case Title: State of West Bengal & v. M/S B.B.M. Enterprises [Click here]

Citation: 2026 INSC 358

Decided on: 09.04.2026

Brief Facts:

The dispute arose out of a works contract wherein the work was completed on 30.07.2000. The Respondent issued a notice invoking arbitration only on 02.06.2022, i.e., after a lapse of more than two decades. The High Court, in proceedings under Section 11 of the Arbitration and Conciliation Act, 1996, held that due to ambiguity in the contract and the absence of a final determination by the Engineer-in-Charge, the claim could not be treated as time-barred and proceeded to appoint an arbitrator.

Aggrieved, the State preferred the present appeal before the Supreme Court, challenging the maintainability of such a belated invocation of arbitration.

Issue:

Whether a notice seeking commencement of arbitration issued on 02.06.2022 could validly set in motion arbitration proceedings in respect of a dispute arising from a work completed on 30.07.2000, and whether the claim was ex facie barred by limitation.

Judgment:

The Supreme Court allowed the appeal and set aside the High Court’s order appointing an arbitrator. It held that the claim was ex facie time-barred, as the cause of action had arisen upon completion of work in 2000, and the notice invoking arbitration in 2022 was issued after an inordinate delay of 21 years.

The Court reaffirmed that:

• The Limitation Act, 1963, applies to arbitration proceedings, and for recovery claims, the limitation period is three years.
• Courts at the Section 11 stage are duty-bound to prima facie reject dead or stale claims to prevent unnecessary arbitration.
• The failure of the Engineer-in-Charge to determine final dues does not indefinitely extend limitation; it was incumbent upon the contractor to act diligently and invoke arbitration within the prescribed period.

The Court emphasized that the law aids the vigilant and not those who sleep over their rights, and permitting arbitration in such circumstances would defeat the purpose of the

limitation law. Accordingly, the initiation of arbitration proceedings was held unsustainable.

2. Case Title: Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. [Click here]

Citation: 2026 INSC 384

Decided on: 17.04.2026

Brief facts:

The dispute arose from a contractual relationship governed by a Bill of Lading containing Clause 25, which provided that disputes between the parties “can” be settled by arbitration. The Appellant invoked the said clause and sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

The Respondent opposed the application, contending that Clause 25 did not constitute a valid and binding arbitration agreement, as it merely indicated a possibility of arbitration and lacked the essential elements of a definitive agreement to arbitrate.

The High Court declined to treat the clause as a binding arbitration agreement. Aggrieved thereby, the Appellant approached the Supreme Court.

Issue:

When the arbitration clause in the contract uses the word ‘can’, does it necessitate the reference of all disputes to arbitration, or is recourse to other dispute resolution mechanisms, including that of the Civil Court, open for the parties?

Judgment:

The Supreme Court dismissed the appeal and upheld the finding that Clause 25 does not constitute a valid arbitration agreement. The Court held that:

• The use of the word “can” denotes mere possibility or discretion, and not a binding obligation to refer disputes to arbitration.
• For a clause to qualify as an arbitration agreement, there must be a clear and unequivocal intention of the parties to submit disputes to arbitration, without requiring any further consent.
• A clause that merely contemplates that parties “may” or “can” refer disputes to arbitration amounts to an agreement to agree, and not a concluded arbitration
• The essential attributes of an arbitration agreement, as laid down in K. Modi v. K.N. Modi and Jagdish Chander v. Ramesh Chander, were not satisfied in the present case.

The Court further reiterated that while the scope of enquiry under Section 11 is limited to a prima facie examination, the Court must still ascertain the existence of a valid arbitration agreement, which was found lacking in the present case.

Accordingly, it was held that Clause 25 merely indicates a future possibility of arbitration, requiring fresh consent of the parties, and therefore cannot be enforced as a binding arbitration clause.

3. Case Title: M/s. MCM Worldwide Private Limited v. M/s. Construction Industry Development Council [Click here].

Citation: 2026 INSC 425 Court: Supreme Court of India Decided on: 21.04.2026

Brief Facts:

The Appellant had initially instituted a civil suit for recovery, which was subsequently referred to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. Pursuant thereto, an arbitral tribunal was constituted.

During the arbitral proceedings, the Respondent challenged the maintainability of the claims on the ground of limitation, first by filing an application under Order VII Rule 11 CPC and thereafter under Section 16 of the Act, contending that the tribunal lacked jurisdiction as the claims were time-barred. Both applications were rejected by the arbitral tribunal.

Aggrieved, the Respondent invoked Section 34 of the Act, challenging the tribunal’s order rejecting the jurisdictional plea. The District Court entertained the challenge, and the High Court, in appeal under Section 37, proceeded to decide the matter on the merits. This led to the present appeal before the Supreme Court.

Issue:

Whether the Respondent was entitled to file an application under Section 34 of the Arbitration Act against the Ld. Arbitrator’s order dated 19.05.2023 under Section 16(2), rejecting the plea that she lacked jurisdiction to continue with the arbitral proceedings?

Judgment:

The Supreme Court allowed the appeal and set aside the judgment of the High Court. The Court held that:

• Under the statutory scheme of Section 16, where the arbitral tribunal rejects a plea of lack of jurisdiction, it is mandated to continue the proceedings and render a final The aggrieved party can challenge such a rejection only after the final award under Section 34.

• An order rejecting a jurisdictional objection under Section 16 cannot be treated as an interim award, and therefore is not independently challengeable under Section 34.
• The remedy of immediate appeal under Section 37 is available only where the arbitral tribunal accepts the plea of lack of jurisdiction, thereby terminating the proceedings, and not when such plea is rejected.
• The reliance placed on Indian Farmers Fertilizer Cooperative v. Bhadra Products was misplaced, as that decision pertained to a determination of limitation as a preliminary issue, and not a jurisdictional ruling under Section 16.

The Court concluded that the proceedings before the District Court under Section 34 and the subsequent appeal under Section 37 were not maintainable, and the High Court erred in adjudicating the matter on the merits. Accordingly, the impugned judgment was set aside, with liberty to the Respondent to raise the issue of jurisdiction at the stage of challenge to the final award.

4. Case Title: Home Care Retail Marts Pvt. v. Haresh N. Sanghavi [Click here]

Citation: 2026 INSC 415 Court: Supreme Court of India Decided on: 24.04.2026

Brief Facts:

The present batch of appeals arose from divergent judicial views of various High Courts on whether a party unsuccessful in arbitration proceedings is entitled to seek interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, at the post-award stage, particularly during the pendency of proceedings under Section 34. The Bombay, Delhi, Madras, and Karnataka High Courts consistently held that an unsuccessful party cannot invoke Section 9 at the post-award stage. The Telangana, Gujarat, and Punjab & Haryana High Courts took the contrary view. The Supreme Court took up the matter to settle the legal position.

Issue:

Whether a petition under Section 9 of the Arbitration and Conciliation Act, 1996, at the post- award stage, by a party that has lost in arbitral proceedings and has no enforceable award in its favour, is maintainable in law?

Judgment:

The Supreme Court resolved the conflict and held that an unsuccessful party in arbitration is not barred from invoking Section 9 at the post-award stage. The Court held that:

• Section 9 confers wide powers on courts to grant interim measures “before, during, or after” arbitral proceedings but prior to enforcement of the award under Section 36.

• In rare and compelling circumstances, interim relief may be necessary even for an unsuccessful party to prevent irreparable prejudice and preserve the efficacy of pending Section 34 proceedings.
• Denying such remedy altogether would be inconsistent with the statutory scheme and could render eventual success in challenge proceedings illusory.
• Judgments of the Bombay, Delhi, Madras, and Karnataka High Courts denying such relief were held to not lay down good law, whereas the contrary views of Telangana, Gujarat, and Punjab & Haryana High Courts were affirmed.

However, the Court emphasized that:

• The threshold for grant of interim relief is higher for an unsuccessful party;
• Courts must exercise caution and circumspection, guided by established principles of prima facie case, balance of convenience, and irreparable harm.

Ratio

An unsuccessful party to arbitration proceedings is entitled to seek interim relief under Section 9 at the post-award stage, subject to a higher threshold and in exceptional circumstances, to preserve rights pending challenge to the award.

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