'Oral Undertaking Falls Within Scope Of Arbitration Clause' : Supreme Court Upholds Award Against Husband For Operation In Wife's Demat Account

Case Title: AC CHOKSHI SHARE BROKER PRIVATE LIMITED VERSUS JATIN PRATAP DESAI & ANR.

Citation : 2025 LiveLaw (SC) 178

The Supreme Court today (February 10) held that an oral contract undertaking joint and several liability falls within the scope of an arbitration clause.

Holding so , the Court affirmed an arbitral award against a husband, finding him jointly liable for the award due to a debit balance in a joint demat account registered in his wife's name.

The Court rejected the contention that the husband's liability constituted a "private transaction" beyond the scope of arbitration. Instead, it held that the arbitration clause, applicable to non-signatories, in conjunction with the husband's active participation in transactions within his wife's account, gave rise to an implied oral agreement establishing joint and several liabilities for both parties.

High Court

Allahabad High Court

Section 36 Of Arbitration Act As Amended Applies To Pre-Amendment S.34 Applications: Allahabad High Court Reiterates

Case Title: U.P. Jal Nigam (Urban) And Another vs. Spml Infra Ltd.

Neutral Citation No.: 2025:AHC:20224

The Allahabad High Court bench of Justice Piyush Agrawal, placing reliance upon the judgment of the Supreme Court in Board of Control for Cricket in India vs. Kochi Cricket Private Limited & Others (2018), held that the amended Section 36 of the Arbitration and Conciliation Act, 1996 applies prospectively to court proceedings initiated on or after the date of commencement of the Amendment Act.

Bombay High Court

Mandate Of Facilitation Council Is Not Terminated Even If It Fails To Render Award Within 90 Days U/S 18(5) Of MSME Act: Bombay High Court

Case Title: Maharashtra Public Service Commission Versus Vast India Pvt. Ltd.

Citation: 2025 LiveLaw (Bom) 56

The Bombay High Court bench of Justice Somasekhar Sundaresan has held that the mandate of the MSME Facilitation Council (Council) cannot be terminated merely on the ground that it failed to render an award within 90 days under section 18(5) of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”) from the date of entering reference as this time period is directory in nature.

Additionally, the court observed that although the time period under the MSME Act is directory, once the arbitration is undertaken by the Council, the timeline prescribed under Section 29A of the Arbitration Act becomes applicable. Accordingly, the award must be rendered within 12 months from the completion of pleadings. However, the court noted that in this case, a counterclaim was also filed by the MPSC, which reset the 12-month deadline as provided under Section 29A of the Arbitration Act. Therefore, the award rendered by the Council was within the prescribed timeframe and could not be said to be in violation of Section 29A.

When There Is Ambiguity In Arbitration Agreement, Business Efficacy Test Can Applied To Discern Intent Of Parties To Arbitrate: Bombay High Court

Case Title: Lords Inn Hotels and Resorts Versus Pushpam Resorts LLP and 3 Ors.

Citation: 2025 LiveLaw (Bom) 60

The Bombay High Court bench of Justice Somasekhar Sundaresan has held that when there is an ambiguity in the agreement with respect to arbitration related provisions, the business efficacy test can be applied to discern true intent of the parties to arbitrate.

The court observed that as per section 7(4) of the Arbitration Act, an arbitration agreement would be considered in writing if it is contained in a document signed by the parties or in exchange of letters or other means of communication which includes electronic communication. Furthermore, the court observed that under Section 7(5), a reference in a contract, to a document containing an arbitration clause would constitute an arbitration agreement, if the contract is in writing and the reference is such as to make that arbitration clause a part of the contract.Limitation For Appeal U/S 37 Of Arbitration Act Is Governed By Article 116 Of Limitation Act, Delay Not To Be Condoned In Mechanical Manner: Bombay HC

Case Title: Executive Engineer National Highway Division Versus Sanjay Shankar Surve & Ors

Citation: 2025 LiveLaw (Bom) 61

The Bombay High Court bench of Justice Somasekhar Sundaresan has held that the delay in filing an appeal under section 37 of the Arbitration and Conciliation Act,1996 (“Arbitration Act”) should not be condoned in a mechanical manner as it would defeat the very objective of the Arbitration Act which is to provide a speedy resolution of disputes.

It also held that as per judgment of the Supreme Court in Executive Engineer v. Borse Brothers Engineers and Contractors Private Limited (2021), the limitation period under section 37 of the Arbitration Act is governed by Article 116 of the Limitation Act, 1963 (“Limitation Act”) which provides for a 90 days time period. The delay in filing the appeal beyond 90 days can be condoned under section 5 of the Limitation Act but only when sufficient cause is demonstrated.

Court At Designated Venue In Arbitration Agreement Can Entertain Application U/S 11 Of Arbitration Act: Bombay High Court

Case Number: Keller Ground Engineering India Private Limited Versus Archon Powerinfra India Pvt. Ltd. & Ors.

Citation: 2025 LiveLaw (Bom) 62

The Bombay High Court bench of Justice Somasekhar Sundaresan has held that the court having supervisory over designated venue of the Arbitration proceedings would have jurisdiction to entertain application under section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) in absence of any contrary indicia indicating any other place to be the seat of arbitration.

The court rejected the submission that the court does not have territorial jurisdiction to entertain the present application under section 11 of the Arbitration Act on the ground that the parties have chosen consciously in their agreement that the venue for the arbitration proceedings shall be Mumbai. It also observed that whether the document executed is a valid document is a matter to be decided by the Arbitrator and not by the court under section 11 of the Arbitration Act. Furthermore, whether the work that has been carried out is with respect to one work or both requires adjudication on merits which can be decided by the Arbitrator.

Calcutta High Court

Plaint Cannot Be Rejected Even If No Satisfaction Is Recorded By Court On Bypassing Pre-Institution Mediation U/S 12A Of Commercial Courts Act: Calcutta HC

Case Title: Haldibari Tea Manufacturers LLP & Anr. Versus Mahindra Tubes Limited & Ors.

Case Number: CO 204 of 2024

The Calcutta High Court bench of Justice Raja Basu Chowdhury has held that admission of the plaint by the Commercial Court without recording satisfaction as to whether the requirement of pre-institution mediation under section 12A of the Commercial Courts Act, 2015 (“Commercial Courts Act”) can be bypassed and a case for urgent relief is established, cannot be said to be fatal and the plaint cannot be rejected on this ground alone.

The court observed that accepting the plaint without recording the satisfaction as to the urgency of relief cannot be said to be fatal. The court at the time of scrutinizing the plaint has to see whether the case for the urgent relief is established. It need not go into the question whether the plaintiff will succeed in obtaining the same. Even if interim relief is denied or the case is weak, the plaint cannot be rejected on this ground alone

Chhattisgarh High Court

Execution Proceedings Can't Be Quashed Solely Due To Non-Supply Of Signed Arbitral Award: Chhattisgarh High Court

Case Title: Amit Kumar Jain vs. Induslnd Bank Limited Through Its Director & Anr.

Case Number: WP227 No. 39 of 2025

The Chhattisgarh High Court bench of Justice Rakesh Mohan Pandey has held that non-supply of the signed arbitral award may be a ground for setting aside an award, but on this ground alone, the execution proceedings cannot be quashed.

The court noted that the petitioner did not take any steps to obtain a certified copy of the award. “Non-supply of the signed arbitral award may be a ground for setting aside an award, but on this count alone, the execution proceedings cannot be quashed”, the court observed. The court observed that an award can only be challenged under section 34(2) and not otherwise. It dismissed the petition.

Delhi High Court

Award Cannot Be Set Aside When No Objections Were Raised Before Arbitrator Or Court U/S 12(5) Of Arbitration Act: Delhi High Court

Case Title: BHADRA INTERNATIONAL INDIA PVT LTD AND ORS. versus AIRPORTS AUTHORITY OF INDIA

Citation: 2025 LiveLaw (Del) 173

The Delhi High Court bench of Justices C. Hari Shankar and Ajay Digpaul held that the award cannot be set aside solely on the ground that the appointment of the Arbitrator was illegal in view of section 12(5) of the Arbitration and Conciliation Act (Arbitration Act) when no such objections were raised before the Arbitrator or the court under section 34 of the Arbitration Act.

The court noted that if the arbitrator was legally incompetent to act as an arbitrator, mere acquiescence of the appellants would not render him competent. However, the court while setting aside the award solely on this ground must also consider the broader objective of the Arbitration Act that is to promote Arbitration as the preferred mode of dispute resolution mechanism. It also observed that despite the introduction of section 12(5), the arbitration continued for two more years and the award came to be passed. But the appellants never raised a whisper before the Arbitrator or the court under section 34 that the arbitrator was incompetent to act as an arbitrator based on section 12(5).

Delhi High Court Upholds Arbitral Award Against IRCTC In Dispute Over Reimbursement For Catering Services, Sets Aside Interest As 'Patently Illegal'

Case Title: Indian Railways Catering and Tourism Corp. Ltd. (IRCTC) vs. M/s. Brandavan Food Products

Citation: 2025 LiveLaw (Del) 179

The Delhi High Court bench comprising Justice Navin Chawla and Justice Shalinder Kaur has reiterated the limited scope of interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (“A&C Act”). The court upheld the arbitral award granted in favour of M/s Brandavan Food Products Ltd. (“Claimant”) in a dispute regarding the reimbursement of differential costs for meals and beverages supplied under a catering contract with the Indian Railways Catering and Tourism Corporation Ltd. (IRCTC) (“Respondent”). The court set aside the interest award as 'patently illegal' as interest could not be granted on amounts not due as of a particular date.

Jammu and Kashmir and Ladakh High Court

Contract Which Is Renewable Based On 'Criteria Of Performance' Is Deemed Renewed Unilaterally After Criteria Is Met, Cannot Be Terminated: J&K HC

Case-Title: Zaffar Abbas Din vs Nasir Hamid Khan, 2025

Citation: 2025 LiveLaw (JKL) 37

The Jammu and Kashmir High Court held that where renewal of contract is based on the criteria of performance, the contract is deemed to have to been extended, if the said criteria is met. It also held that courts cannot interfere with the interpretation given by an Arbitrator if the same is reasonable and not opposed to logic.

In this case, the Arbitrator was to determine legality of breach of agreement by interpreting the agreement-clause which said that “the agreement between the parties was compulsorily renewable after the expiry of first five years, if the sales remained satisfactory.”