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-       Abdul Haseeb [1] Introduction Foreign commercial awards are enforced in India under Part II of the Arbitration and Conciliation Act, 1996  (“ Arbitration Act ”), which incorporates the New York Convention. A foreign award is defined under Section 44  as an arbitral award on commercial differences made in a New York Convention country under a written arbitration agreement. To enforce such an award, the award-holder must file an application in the appropriate High Court, usually where the award-debtor resides or holds assets, producing the original award and arbitration agreement or certified copies. Section 47  requires the award-holder to prove the award’s authenticity and status as a foreign award. If satisfied, the High Court treats the award as a decree under Section 49  and can order its execution. The Act also incorporates a strict time‑bar: enforcement proceedings must be brought within three years of the accrual of the right to apply. In a 2020 judgement, Vedanta Ltd. v. Government of India [ AIR 2020 SC 4550], the Supreme Court held that Section 5  of the Limitation Act applies to foreign awards, allowing three years from accrual to apply for enforcement. The Court emphasized that an enforcement court can only refuse  enforcement under Section 48  and has no power to set aside a foreign award, as only the courts of the place of arbitration (seat) have that power. In practice, therefore, enforcement involves filing a Section 47 petition with the High Court and proving formal requisites. The court then applies Section 48(1)‐(2), which lists narrow conditions under which enforcement may  be refused. Common procedural grounds include incapacity of a party or invalid agreement, lack of notice, award beyond scope, or improper tribunal composition. Additionally, if an award has been set aside at its seat, the enforcement court may adjourn or refuse enforcement. Section 48: Grounds of Refusal – “Public Policy” and Fraud The key substantive grounds for refusing enforcement of a foreign award are in Section 48(2) of the act. First, the subject-matter of the dispute must be arbitrable under Indian law. [2] Second, and most critically, enforcement can be refused if it is “contrary to the public policy of India”. [3]   The Arbitration Act’s 2015 amendment  significantly narrowed this exception. Section 48(2)(b) provides that enforcement may be refused if it is contrary to fundamental policy or justice/morality or if the award was induced by fraud or corruption. [4] The Explanation to Section 48 makes clear that an award is “in conflict with the public policy of India” only if  it was induced by fraud or corruption, or violated key arbitration provisions, or if it contravenes the fundamental policy of Indian law  or shocks the “most basic notions of justice or morality”. [5] Crucially, the Act expressly bars reviewing the merits of the case in determining “fundamental policy”. In short, Indian law today recognizes only  three kinds of public-policy breach: (i) serious impropriety in obtaining the award, such as fraud, (ii) contradiction of a fundamental national policy, or (iii) violation of basic justice or morality. All other objections, such as an alleged legal error by the tribunal, do not  by themselves violate public policy. These provisions largely mirror the New York Convention’s Article V(2)(b) with a restrictive gloss. Judicial Interpretation of Section 48 – Evolving Jurisprudence The Hon’ble Supreme Court in 1993 in the case of Renusagar Power v. GE [AIR 1994 SC 860] (“ Renusagar ”) set the foundational standard. The Supreme Court held that “public policy” under the prior Foreign Awards Act (and now Section 48) means Indian public policy, but only its fundamentals. An award offends public policy only if enforcement would  contravene (i) “a fundamental policy of Indian law,” (ii) India’s interests, or (iii) justice or morality. Mere violation of a statute or contract alone was deemed insufficient to refuse enforcement. This decision established a pro‑enforcement regime, emphasizing that review must be minimal. Subsequent cases in this era reaffirmed Renusagar’s  limited view. For example, Shri Lal Mahal Ltd. v. Progetto Grano Spa  AIRONLINE 2013 SC 191 explicitly overruled the intermediate case Phulchand Exports v. OOO Patriot  [2011] 10 SCC 300, which had allowed courts to consider “patent illegality” in foreign awards. In Shri Lal Mahal , the Court declined to re-open the merits of the award and reaffirmed that an enforcement court cannot re-examine the arbitrators’ findings. Likewise a 2020 judgement, Vijay Karia v. Prysmian  [AIR 2020 SC 1807], applied these principles to foreign LCIA awards: the Court held that contravention of India’s foreign-exchange law (FEMA) was not  a breach of fundamental policy, distinguishing the civil-compliance orientation of FEMA from the draconian FERA regime. Thus, Vijay Karia  reinforced that only truly fundamental legal norms and not routine regulatory violations fall within the public-policy exception. The Court noted that enforcing these foreign awards did not offend India’s basic policy. Notably, Vijay Karia  also imposed heavy costs (₹5,000,000) on the award-debtors for abusing enforcement proceedings, signalling that dilatory or strategic objections like re-litigating settled issues will be penalized. In Government of India v. Vedanta Ltd.  [AIR 2020 SC 4550], the Hon’ble Supreme Court further underscored minimal interference. Dealing with a large UNCITRAL award (USD 278,871,668), the Court reiterated that an enforcement court cannot  set aside a foreign award; only the court at the place of arbitration has that power. Accordingly, Indian courts will enforce awards unless a narrow Section 48 ground is clearly met. The apex Court’s latest pronouncement  came in the year 2024 in the case of Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings (Mauritius) Ltd.  [2024] 7 SCC 197. In Avitel, a Singapore‐seat SIAC award was challenged on the sole ground that the presiding arbitrator had undisclosed affiliations thus asserting bias. The Supreme Court unanimously upheld  enforcement, emphasizing the international standard for public policy. It held that while bias can, in principle, violate public policy, a narrow  and internationally-aligned test applies. Only in exceptional  cases where “the most basic notions of morality or justice are violated” should enforcement be refused on bias grounds [¶23-24]. The Court noted that Avitel never raised the conflict in the Singapore proceeding, and the facts did not even meet the IBA guidelines for disqualification, so no “wholesale violation” of justice occurred [¶39]. Crucially, it restated that foreign awards merit “minimal judicial interference”: merely alleging bias without a clear nexus to public policy will not succeed [¶24]. The Court also underscored that challenges to arbitrator bias belong primarily in the seat jurisdiction, not India [¶35]. In short, Avitel confirms that Indian courts will enforce foreign commercial awards except in truly egregious circumstances. Common Grounds of Resistance and Key Authorities Public Policy – Section 48(2)(b) Consistent with Renusagar  and its progeny, Indian courts treat the public-policy exception in enforcement very restrictively. Aside from fraud and basic morality, courts interpret “fundamental policy” narrowly. For example, Vijay Karia  held that a regulatory breach is remediable  and not a fundamental policy breach. Similarly, challenges based on allegations of “patent illegality”, as once allowed under Phulchand Exports , are now foreclosed after Shri Lal Mahal . In practice, only violations of constitutional or legislative touchstones (e.g. national security, violation of a fundamental legislative objective) are likely to qualify. A useful distillation is that Section 48(2)(b) has been narrowed by statute to the three categories in the Explanation. Indian courts will not entertain broad notions of public policy that would require re-trying the dispute. As the Supreme Court puts it, an enforcement court may refuse a foreign award “only if the most basic notions of morality or justice are violated”. As laid down in Perma Container (UK) Line Ltd. v. Perma Container Line (India) (P) Ltd.  [2014 SCC OnLine Bom 575] and also followed in Mercator Ltd. v. Dredging Corpn. of India Ltd.  [2024 SCC OnLine Del 3075]. This aligns India with the international norm that public-policy review of foreign awards is limited. For instance, biases or conflicts will be disregarded absent extreme facts, as in Avitel . Likewise, India’s interest and justice/morality tests track Article V(2)(b) of the New York Convention. Fraud and Corruption The Act explicitly lists fraud and corruption as public-policy grounds. If an award is tainted by bribery or fraud on the arbitral process itself, enforcement may be refused. However, fraud must be proven as directly affecting the award. Indian courts will be cautious: a mere allegation of contract fraud does not automatically defeat enforcement unless it rises to the level of corrupting the arbitration. In Avitel , for example, HSBC had alleged fraudulent misrepresentation by the debtor and had won a USD 60m award for fraud; the enforcement court enforced the award without re-litigating whether fraud occurred. By contrast, if an award were obtained by bribing an arbitrator or similar misconduct, Section 48 clearly permits refusal. Overall, post-2015 the fraud exception is the main way to challenge enforcement on merits. But the courts generally require clear and pleaded evidence of fraud affecting the award. Claims of mere contractual fraud or misrepresentation, as opposed to fraud on the tribunal, have not been allowed to upset enforcement. [6]  As the SC notes, the fraud exception under Section 48(2)(b) is meant to address “common sense” situations, it does not reopen the case on ordinary misstatements. [7] Complications in Enforcement: Interim Relief and Parallel Proceedings Even with a pro-enforcement stance, practical obstacles can arise. One issue is interim relief  pending enforcement. Unlike domestic arbitrations where Section 17  and 9 empower courts to grant interim measures, foreign arbitrations have no counterpart interim-protection provision in Part II. However, parties have persuaded courts that Section 9  still applies to foreign‑seat arbitrations absent an express opt-out. In Aircon Beibars Fze v. Heligo Charters , the award-creditor obtained urgent injunctive relief over the debtor’s sole Indian asset by invoking Section 9. The court held that Section 2(2)  of the Act, which limits Section 9 if parties agree to exclude Indian interim relief, requires clear language in the contract to oust Section 9. This position was further affirmed by the Supreme Court in a 2021 judgement, PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited  [AIR 2021 SC 2517], which clarified that the court's power to grant interim relief under Section 9 for foreign-seated arbitrations can only be excluded through a clear and express agreement to the contrary. Thus, unless the arbitration agreement explicitly rules out Indian emergency relief, award‑holders may apply under Section 9 to preserve assets pre-enforcement. This underscores the need for careful clause-drafting: a foreign company might expressly reserve Section 9 rights if desired, or exclude it if not. “Overlapping domestic proceedings” can also complicate enforcement. Parties sometimes file parallel suits or petitions in Indian courts, to declare a contract void, obtain ad-hoc injunctions, or frustrate enforcement. Indian courts generally resist such forum-shopping. [8] For example, Section 45  obliges a court seized of a domestic suit to refer the matter to arbitration if a valid agreement exists. If a losing party sues in India on the same dispute, the court should either refer it to arbitration or stay the suit. Similarly, once an arbitration award exists, courts will not entertain collateral attacks beyond Section 48 grounds. [9]  In Avitel , HSBC obtained orders freezing Indian assets pending enforcement, and the Bombay HC refused to entertain repeated challenges. The Supreme Court later chided the debtors for using enforcement proceedings as a surrogate appeal, stressing that bias or other objections should have been raised in the arbitration at the seat [¶56]. This can also lead to contractual disputes, for instance, Indian parties have at times resisted enforcement by arguing that the arbitration agreement itself was invalid or the contract was void. The courts have been firm that such arguments fall squarely within Section 48(1) or (2) grounds. In Avitel , the debtors argued the share‑subscription contract was insufficiently stamped under Indian law, but the Bombay HC, and ultimately the Supreme Court, rejected this as a bar to enforcement. Unless the procedural formalities are so egregiously violated as to invalidate the arbitration agreement itself, technical irregularities will not usually impede enforcement. Practical Impact and Drafting Considerations The evolving Indian law has made enforcement of foreign commercial awards increasingly reliable. For Indian companies, this means that if they obtain foreign awards, Indian courts will generally honour them barring narrow exceptions thus increasing the confidence in business with the foreign company on the ground that foreign awards will be upheld. [10] The emphasis on minimal interference and seat-competence encourages confidence in international arbitration. On the other hand, losing parties in arbitration must recognize that protracted “guerrilla” litigation will be disfavoured. [11] The courts’ imposition of heavy costs (as in Vijay Karia ) and pointed rebukes (as in Avitel ) indicate that dilatory tactics will be penalized. To maximize enforceability, contracting parties should draft arbitration clauses with caution and care. Key considerations include: choosing a neutral seat and applicable law, expressly clarifying which provisions of the Arbitration Act apply, and addressing interim relief. If avoidance of Indian intervention is desired, they might expressly waive Section 9. [12]   [13]   [14] The clause should also name the law governing the agreement and confirm the scope of arbitrable disputes. Ensuring the contract complies with Indian formalities such as proper stamping, etc. and avoids technical defences. In cross-border contracts, it is prudent to have an arbitration agreement in a form that meets Indian requirements, that includes written record and is in no conflict with public policy at formation. Finally, parties should be aware of enforcement logistics. A foreign claimant should promptly apply in the correct High Court and be ready to submit the required documents and translations. [15] An Indian respondent should present any objections under Section 48 early and with clear proof (e.g. evidence of fraud). [16] Given Section 48’s discretionary language (“may refuse”), courts sometimes have restored awards despite technical objections. [17] Thus, strategic considerations include preparing for limited appeals and potential security requirements. Conclusion In sum, Indian law now adopts a strongly pro-enforcement stance toward foreign commercial awards. The Arbitration Act’s Part II (as amended in 2015 and 2019) and recent Supreme Court jurisprudence make clear that enforcement will be refused only on strictly limited grounds – essentially fraud, corruption, or violation of fundamental national policy/morality. Landmark decisions (Renusagar, Shri Lal Mahal , Vijay Karia , Avitel ) uphold this narrow reading of “public policy”. The Avitel  ruling, in particular, reinforces minimal court interference and emphasizes that challenges such as arbitrator bias must meet a high threshold. At the same time, practical hurdles like delay, parallel litigation, or interim disputes, require vigilance. Indian companies and foreign investors alike must plan thoughtfully: drafting clear arbitration clauses, understanding Section 48’s contours, and diligently prosecuting or defending enforcement actions. With recent reforms and jurisprudence, India’s enforcement regime now aligns closely with global norms, enhancing predictability for cross-border commerce. [1]  Abdul Haseeb is a Fourth Year Law Student, at Dr. Ram Manohar Lohiya National Law University, Lucknow [2]  Booz-Allen & Hamilton Inc v. Sbi Home Finance Ltd, AIR 2011 SC 2507. [3]  National Agricultural Cooperative v. Alimenta S.A., AIR 2020 SUPREME COURT 2681. [4]  Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705. [5]  Swiss Timing Ltd v. Organizing Committee Commonwealth, AIR 2014 SUPREME COURT 3723. [6]  A. Ayyasamy v. A. Paramasivam & Ors,, AIR 2016 SC 4675. [7]  Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings (Mauritius) Ltd., 2024 7 SCC 197. [8]  Indian Oil Corporation Ltd. v. SPS Engineering Ltd., (2011) 3 SCC 507. [9]  Vijay Karia v. Prysmian Cavi E Sistemi SRL, (2020) 11 SCC 1. [10]  Agrud Partners, Enforcement of Foreign Arbitral Awards in India: A Guide, Agrud Partners (May 9, 2025), https://agrudpartners.com/enforcement-of-foreign-arbitral-awards/ (last visited Sept. 06, 2025). [11]  Ahuja, N.G. (2022). Mechanisms to Control Guerrilla Tactics in International Arbitration. In: Taming the Guerrilla in International Commercial Arbitration. International Law and the Global South. Springer, Singapore. https://doi.org/10.1007/978-981-19-0075-4_5 . [12]  As in Bhatia International v. Bulk Trading S.A. [AIR 2002 SC 1432] the Supreme Court took a purposive (holistic) approach and held that Part I could, in certain circumstances, be applied to international arbitrations even if the seat/place was outside India, unless the parties had expressly excluded Part I. Bhatia effectively allowed Indian courts significant supervisory jurisdiction over some foreign-seated arbitrations. [13]  Bharat Aluminium Co. v. Kaiser Aluminium Technical Servs.[Civ App 3678 of 2007 (6 September 2012)] overruled Bhatia International (prospectively) on the specific point of territorial application: the Court held that Part I of the Act does not apply to arbitrations whose seat/place is outside India; the seat (place) of arbitration is the key territorial touchstone (the “centric of gravity”), and judicial powers under Part I are territorially limited. Consequently, applications under Part I (including s.9) are not maintainable in India in relation to foreign-seated arbitrations. BALCO thus restored a strict territorial approach in line with the Model Law. [14]  Raffles Design International v. Educomp [2016 SCC OnLine Del 5521] held that after the 2015 Amendment, Section 9 can be invoked in relation to foreign-seated arbitrations unless there is an agreement to the contrary. The Court recognised that emergency/EA awards from a foreign seat may not be directly enforceable in India but that an Indian court could nonetheless grant interim relief under sec 9. (Usefully illustrates how Indian courts interpret the proviso liberally to allow interim relief.) [15]  Bank of Baroda v. Kotak Mahindra Bank Ltd., 2020 SCC OnLine SC 324. [16]  Perfint Healthcare Pvt. Ltd. v. California Institute, 2019 SCC OnLine Mad 1. [17]  The Branch Manager, Magma Leasing and Finance Limited and Anr. v. Potluri Madhavilata and Anr, MANU/SC/1672/2009.

Shivanshi Shukla [1] I. Introduction Arbitration, as a form of Alternative Dispute Resolution ( ADR ) is intended to offer a speedy, cost-effective, and efficient alternative to tedious Court litigation. Yet, recent judicial trends show a rise in the bar on procedural compliance-related issues in Court-related proceedings of arbitration. Recently, a full judge bench of the Hon’ble Delhi High Court comprising Justice Rekha Palli, Justice Navin Chawla, and Justice Saurabh Banerjee,  in Pragati Constructions Consultants V/s Union of India, 2025 : DHC : 717-FB addressed two such compliance related issues being firstly , the absence or defect in the Statement of Truth, and secondly , the effect of non-filing of the Arbitral Award rendering such Petition as non-est.   The critical pitfall of a non-est filing lies in its impact on limitation. Under the Arbitration and Conciliation Act, 1996 (“the Act” ), a petition to set aside an arbitral award must be made within 90 days, extendable by a further 30 days at the Court’s discretion, with no scope for condonation beyond this 120-day outer limit. If a petition is treated as non-est, the initial filing offers no safeguard, as the limitation clock continues to run, and the challenge may be irretrievably barred. This article critically analyses the Delhi High Court’s reasoning, statutory intent, and the implications for India’s efforts to promote arbitration as a preferred mode of dispute resolution. II. Non-est Filings and Requirements under Section 34 In Sunny Abraham v. Union of India, (2021) 20 SCC 12 , the Supreme Court interpreted “non-est” as something treated in law as non-existent due to a fundamental legal lacuna going beyond mere procedural irregularity. Applied to a case of challenging the award, this means that even if a petition is filed within the limitation prescribed under Section 34(3) of the Act, it may still be disregarded as non-est filing, with the limitation clock continuing to run and any subsequent filing barred. Section 34 enables a party to challenge an arbitral award on specific grounds within the time limit and also prescribes a rigid limitation period of 90 days, which can be further extended by 30 days at the Court’s discretion in the presence of a sufficient cause.  The Supreme Court, in Union of India v. Popular Construction Co, (2001) 8 SCC 470, described this limit as “inelastic and inflexible,” a view reinforced in by the Supreme Court in State of West Bengal v. Rajpath Contractors and Engineers Ltd, (2024) 7 SCC 257 , the Apex Court, relying on Popular Construction , dismissed an appeal on the ground that the challenge to set aside the award was filed beyond the statutory period. What remains uncertain, however, is whether defects such as non-filing of the award, Vakalatnama, or Statement of Truth render a petition non-est or whether they may be treated as curable irregularities. Courts have reached divergent conclusions,  where such petitions were held to be non-est , relying on provisions of the Civil Procedure Code 1908 (“CPC”) and the Commercial Courts Act 2015 (“CC Act”). This question was addressed in Pragati Constructions Consultants , where a full bench was constituted to answer the reference made by the learned Single Judge, and the reference was based on two conflicting judgments of the Division Bench in the cases ONGC v. Sai Rama Engineering Enterprises, 2023 SCC OnLine Del 63 , and ONGC V. Planetcast Technologies Ltd, 2023 SCC OnLine Del 8490 In Sai Rama Engineering , the Delhi High Court held that for a petition to be considered as non-est, the Court must conclude that it cannot be regarded as an application for setting aside the arbitral award. For a petition under Section 34, the Court is required to assess the grounds of challenge, and without a copy of the award, it is difficult to appreciate such grounds. The Court further noted the importance of the material procedural formalities, such as the application being signed by the parties and the application being affixed by an affidavit and statement of truth by virtue of Order XI of CPC and Section I of the CC Act authenticates such petitions. However, while these defects, such as the absence of an affidavit or Statement of Truth, are material, the Court held they were curable and did not nullify the petition altogether. In contrast, the division bench in Planetcast Technologies adopted a stricter view and observed that petitions under Section 34 of the Act fell within the jurisdiction of the Commercial Division of the High Court, making the CC Act applicable to such petitions. The pre-requisite of filing a statement of truth has been emphasized in Order XI Rule 1 of the CPC as amended under the CC Act.  Departing from the view that such defects are merely procedural requirements, the Court examined this issue through the lens of an attempt made by the parties to pause the limitation period and noted that the petitioner cannot claim the benefit of a non-est filing and later make a proper filing after the limitation period has lapsed. A similar approach was adopted by the Division bench of Delhi High Court in Delhi Development Authority v. Durga Construction Co,  2013 SCC OnLine Del 4451 , where it was held that petitions which are hopelessly inadequate or lacking in substance may be treated as non-est, and curing defects later cannot retrospectively validate the original filing. This non-application of the time limit on re-filing was also observed by the Supreme Court in Northern Railway v. Pioneer Publicity Corporation Pvt. Ltd. (2017) 11 SCC 234 , further clarified that re-filing does not amount to fresh institution but will be termed as re-filing. The non-applicability of Section 34(3) limitation to re-filing leads us to a fundamental question wherein the defects, such as non-filing of the statement of truth and arbitral award, are considered as a curable defect for the purposes of re-filing, or whether such a petition would be rendered as non-est and the limitation period would be stringent, not giving the Court a chance to condone or allow the re-filing beyond the prescribed period. III. Observations of the Court The Court in Pragati Constructions Consultants observed two key principles applicable to a Section 34 petition, firstly, arbitration being an ADR mechanism and has to be disposed expeditiously which is also embodied in Section 5 and Section 34(3) of the Act. This object cannot be undermined by allowing petitions that fail to meet basic filing requirements to stall the limitation period from running. Secondly, while Section 34 provides a sole remedy for challenging an arbitral award, mere technicalities should not affect the substantive rights of the parties. The Court further noted that even in the absence of expressly stated mandatory requirements, a petition cannot be made in any form or manner, leaving the Court helpless. Terming the non-filing of an arbitral award a fatal defect, the Court held that filing of an arbitral award is not a mere procedural requirement but an essential one, the absence of which renders the application “non-est” in the eyes of law. The Court reasoned that without a copy of the award, it becomes impossible for the Court to appreciate the grounds of the challenge. Regarding the non-filing of the Statement of Truth, the Court held that whether such an omission renders a Section 34 petition defective depends on the facts of each case and lies within the Court’s discretionary power. By virtue of Section 10 of the CC Act, jurisdiction is not only conferred upon the Commercial Division or Commercial Court in arbitration matters, but the procedural rules of such courts are also made applicable to arbitration-related proceedings. Accordingly, Section 16 of the CC Act read with Order VI Rule 15A of CPC applies to petitions filed under Section 34 of the Act. Applying general principles under Order VI Rule 15A of the CPC, which applies to a suit involving a commercial dispute of a specified value, the Court noted that non-filing of the statement of truth is a curable defect. However, determining the question of condonation of delay in re-filing of the application under Section 34 depends on the nature of the defect, and the Court must assess, based on the facts and circumstances of each case, whether such delay can be condoned. IV. Way Forward The judgment in Pragati Constructions Consultants v. Union of India underscores the pressing need for legislative clarity on procedural requirements under the Arbitration and Conciliation Act, 1996. While the Court rightly emphasized the necessity of filing a copy of the award to appreciate the grounds of challenge, its case-by-case approach to elements such as the Statement of Truth leaves significant room for judicial discretion, perpetuating uncertainty. Combined with the rigid limitation regime of Section 34(3), this uncertainty risks depriving parties of their only statutory remedy against arbitral awards on account of curable procedural lapses. The divergence between Sai Rama Engineering and Planetcast Technologies illustrates the consequences of such ambiguity, especially given that the Delhi High Court (Original Side) Rules, 2018 do not prescribe clear procedural standards for Section 34 applications. Inconsistencies in judicial treatment raise the possibility of petitions being declared non-est, undermining predictability and access to justice. As India aspires to be a global arbitration hub, procedural safeguards must be maintained without becoming barriers. A balanced framework is needed—one in which procedure serves the ends of justice rather than obstructs them. The legislation should therefore lay down clear, uniform procedural requirements for Section 34 petitions, closing gaps that currently allow conflicting interpretations, and ensuring the Arbitration Act remains a complete code in itself. [1] Shivanshi Shukla is a fourth-year law student from the Institute of Law Nirma University, Ahmedabad (ILNU).

Vaishnavi Agrawal [1]   Introduction As India attracts greater investment and aspires to establish itself as a leading global economy, a surge in cross-border transactions is inevitable. This mandates the existence of an efficacious cross-border dispute resolution mechanism. A direct result of this was the emergence of International Commercial Arbitration as the most commonly opted machinery. In such a scenario, the need for an economy to be pro-arbitration or arbitration-friendly becomes indispensable.   Against this backdrop, India has certainly evolved into a pro-arbitration jurisdiction with numerous judicial decisions and legislative actions. However, in light of the recent events, such as the ‘copy-paste’ judgement, Public Works Department (‘PWD’) of Delhi’s removal of the arbitration clause from all future contracts, the Gayatri Balasamy judgement wherein interference with arbitral awards was allowed though with caution and care eventually casting uncertainty over the finality of an arbitral award, and others, the perception of India as an arbitration-friendly jurisdiction stands tarnished. These developments necessitate a closer examination of whether the label of a ‘pro-arbitration’ jurisdiction is merely a strategic narrative to attract investors and global influence, or whether it genuinely withstands the test of time and practice. In light of these recent trends, this article aims to examine the trajectory of arbitration in the Indian judicial landscape. It suggests that these events not only deviate from global norms but also occur at a time when India is trying to establish itself as a global arbitration hub. This article provides an overview of the events that transpired, analyses their impacts on India’s ambitions and highlights the persistent concerns.   The events in question and their implications With the onset of 2025, not one but several such incidents that question India’s sanctity as a pro-arbitration jurisdiction have come into light, most of these being in and around April 2025. In this section, the author aims to delve into the implications of these events on the Indian arbitration landscape.   The first in question is the annulment while deciding the case of DJO v DJP by the Singapore Court of Appeal on 8 th April, 2025, of an international arbitral award made by a former CJI, Deepak Misra , on discovering that almost half the decision was copied verbatim from earlier awards he had authored in separate but related disputes. The dispute arose from a contract involving a special-purpose vehicle tasked with managing freight corridors in India and a consortium of three infrastructure companies. The core issue was the interpretation of a 2017 notification issued by the Indian government regarding revised minimum wages, which the consortium argued entitled them to higher payments. After negotiations failed, the matter proceeded to arbitration in Singapore under the International Chamber of Commerce (ICC) Rules . In November 2023, the Arbitral Tribunal, led by Justice Misra and including co-arbitrators Justices Krishn Kumar Lahoti and Gita Mittal, ruled in favour of the consortium. However, this ruling was subsequently contested before the Singapore International Commercial Court, which found that significant sections of the award were closely derived from two earlier arbitration decisions authored by Justice Misra in similar cases. The Court of Appeal has since affirmed this finding. Such incidents cast doubt on the credibility and competence of Indian arbitrators, particularly given that many are retired judges. Their authority and impartiality as arbitrators come under scrutiny, raising broader concerns about the standards of arbitration practice in India. Such an award was seen as a compromise of fairness and integrity and therefore a violation of the ‘principles of natural justice’. This is not only a question of individual reputation, but also raises apprehensions about the procedural fairness and quality of Indian-seated arbitrations, effectively deterring parties from choosing India for the resolution of their conflicts or from opting for Indian arbitrators.   The second event in line is the notification issued on 21 st April, 2025, by the PWD of Delhi, eliminating arbitration as a dispute resolution method for all future contracts. This decision aligned with a 2024 guidance from the Ministry of Finance, which outlines the drawbacks of arbitration, though the latter only restricted arbitration for disputes valued up to INR 10 crores. In contrast, the PWD’s notification imposes a comprehensive ban on arbitration, amending clause 25 of the General Conditions of Contract to require that all disputes be resolved through the courts. This move portrays a lack of trust in arbitral institutions and the arbitration framework in India. Further, such a decision dissuades parties from engaging in contractual relations with the public sector enterprises or state instrumentalities, where the sanctity of the contract is not preserved and creates tensions in the pre-existing contractual relations, while also undermining trust, which is the very foundation of any investment. In light of this notification, it appears that the pro-arbitration narrative is merely a catchy phrase, whilst the reality portrays a completely contrary picture.   Lastly, on 30 th April, 2025 in the landmark decision in the case of Gayatri Balasamy v ISG Novasoft Technologies Limited , t he Hon’ble Supreme Court in a 4:1 majority held that courts have a limited power to modify an arbitral award under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 and listed instances wherein such power of modification could be exercised in certain circumstances the most relevant here being ‘ by exercising great care and caution while utilising the powers under Article 142 of the Constitution, within its constitutional limits .’ The judgment essentially allowed interference with arbitral awards if the same is deemed fit under Art. 142 , thereby undermining the sanctity and finality of the arbitral award. The same stands contrary to legislative reforms in 2015, 2018 and 2021 , which had systematically narrowed the judicial interference with arbitral awards, providing procedural clarity and creating a predictable dispute resolution landscape, restoring investor confidence. The decision highlights the need for immediate legislative intervention to fill the statutory void.   Deviation from global norms India with its aspirations of emerging as a global arbitration hub by virtue of Draft Arbitration And Conciliation (Amendment) Bill, 2024 , several other judicial and legislative reforms seek to harmonise its domestic arbitration practices with international best practices in line with frameworks like the New York Convention and the Geneva Convention , both of which facilitate the enforcement of arbitral awards, thereby creating investor confidence and boosting its commercial relationships. The development of strong institutional arbitration, such as the Delhi International Arbitration Centre (DIAC) and the Mumbai Centre for International Arbitration (MCIA), similar to Singapore and London, has further enhanced India’s credibility as an arbitration-friendly jurisdiction. However, these recent events reveal a more uncertain future in terms of the Indian arbitration landscape. These events not only deviate from the established global norms but also trigger the need for a more synchronised pro-arbitration framework.   Firstly, for instance,   the New York Convention’s harmonization of arbitral enforcement  reinforces investor confidence in cross-border transactions. Weakening the arbitration framework by either introducing a lack of finality of the arbitral award or ‘copy-pasting’ arbitral awards from parallel awards without due regard to the difference in the factual scenarios or by removing arbitration as a means of dispute resolution by the state machinery not only affects the domestic commercial transactions, but also repulses the investors from viewing India as a prospective jurisdiction to invest and trusting it with the resolution of their dispute. Such development, therefore, is at divergence with India’s aspirations of emerging as the global arbitration hub.   Secondly, the legislative reforms of   2015, 2018 ,  2021 and even the latest Draft Arbitration And Conciliation (Amendment) Bill, 2024 , aim to confine judicial interference in arbitral awards and introduce procedural clarity, introducing predictability in India’s arbitration landscape. However, the Gayatri Balasamy judgement allows for cautious yet undefined interference with the arbitral awards, thereby introducing an element of unpredictability, which might act as a repellent for investors and is contrary to international practices in jurisdictions like Singapore and the United Kingdom, wherein stringent provisions exist for timely and effective enforcement of arbitral awards.   In contrast to the above-mentioned events,  India’s recent amendment  to its bilateral investment treaty with the UAE reveals a notable reduction in the time period for exhausting local remedies, indicating an intention to expedite access to international arbitration. However, it is hard to shield investor confidence in a scenario where arbitration as a means to resolve disputes is banned despite a contractual agreement, or where, despite obtaining an award, the same may be subjected to litigation. An incident such as this stands in deep contrast with the progressive Indian practices, exposing inconsistency with its international practices.   Conclusion The author contends that India’s aspiration to emerge as a pro-arbitration jurisdiction is undermined by its recent actions that reveal a disconnect between policy intentions and actual practices, and is ultimately likely to deter foreign investment and foster uncertainty in its dispute resolution mechanisms. To align with international standards, India must establish consistency between its legislative framework and judicial behaviour, which can primarily be achieved by way of legislative intervention in reinforcing the finality of arbitral awards and implementing capacity-building initiatives for arbitrators, particularly ones with judicial backgrounds. Furthermore, ensuring that public sector entities adhere to arbitral commitments is vital for rebuilding confidence. A credible and principled commitment to arbitration is essential for India to reshape its image into a genuinely arbitration-friendly jurisdiction in the global legal landscape. [1] Final year law student at the Institute of Law, Nirma University.

Piyush Singla [1] Introduction The Indian real estate market, which contributes the third-largest portion of the country's GDP, encompasses the residential, commercial, retail, and hospitality sectors . While urbanisation, communication, better transportation, technological advancements, and participation in global markets have all contributed to progress, they have simultaneously revealed structural deficiencies. Disputes in real estate, which often involve delays or battles over ownership across national borders, are becoming more common in India. However, regular courts do not always handle matters swiftly or with the right expertise, which frustrates buyers, developers, and investors. Alternative Dispute Resolution (ADR) methods, such as arbitration, are discussed in this blog, along with their advantages in dealing with disputes. Unlike going to court, arbitration allows flexibility, confidentiality, and access to experienced advisors, which aids complex real estate transactions. The blog explains how arbitration functions in real estate, why its importance is increasing, and what challenges exist with using it. The main contribution is actionable changes at the legal, technological, and organizational levels, helping arbitration become the main choice for settling disputes in real estate. As such, the main question that this paper attempts to answer is: In what ways is arbitration a viable model of resolving real estate disputes in India, and what are the reforms that need to be introduced to neutralise its present shortcomings? THE ARBITRABILITY OF REAL ESTATE DISPUTES Arbitration is indeed gaining popularity in the real estate industry, but not all disputes have the opportunity to be solved legally by this method. In Vidya Drolia v., the Supreme Court held that a state is required to order the seizure of a property that is subject to a specific concern of the national interest of the Republic of India. In Durga Trading Corporation (2020), it was explained that rights in rem (rights that have an effect against the outside world, such as ownership or tenancy governed by special enactments) are usually non-arbitrable, whereas rights in personam (reasonable disputes that fall within the domain of general contract law) are arbitrable. The examples of real estate arbitrable disputes are: ·      Controversies between the developers and the contractors over the construction delays or flaws. ·      Cases between land avenues and developers associated with the contract in joint development. ·      Conflicts that come up based on financing, investment, or revenue-sharing arrangements. Areas of non-arbitrable disputes are: Cases that represent the exclusive jurisdiction of special forums (e.g., homebuyer complaints regarding delay in possession), which fall under the jurisdiction of RERA authorities or consumer courts. ·     Rent control eviction or tenancy-related issues. ·     Disputes concerning title to real estate, which imply the implication of third-party rights and thus can not be subject to the arbitration. The availability of numerous adjudicatory platforms, including RERA and consumer commissions, civil courts, and arbitral tribunals, contributes to the redundancy and confusion. So, definite rules in the legislation on the arbitrability of real estate disputes are needed that do not allow any contradictory decision and the development of delays. Arbitration In Real Estate: Resolving Disputes Arbitration is a form of alternative dispute resolution (ADR) in which independent arbitrators hear the evidence and make a typically binding decision. It is arguably faster and more effective than traditional litigation systems. Theincreasing complexities in the real estate sector, including joint ownership conflicts, cross-border conflicts, technology-driven disputes, and construction-related disputes, have necessitated arbitration. The practicality, affordability, and time efficiency of arbitration make it an efficient technique for overcoming the complexities of real estate legal issues, as highlighted in the case of Chopra Fabricators & Manufacturers (P) Ltd. v. Bharat Pumps & Compressors Ltd . The story of Chopra Fabricators & Manufacturers (P) Ltd. v. Bharat Pumps & Compressors Ltd. brings out how the delays in enforcing the award can end up defeating the effect of arbitration, and this is more so when the arbitration is involved in the real estate or construction industry, where immediate resolution is of the essence. In the view of the Supreme Court, it was a bright case of undermining the arbitration process despite an award being given in 1992, but the execution petition came in 2003. The Court also noted that despite the lapse of 30 years, the party that has the benefit of the Award being granted is not in a position to reap the fruit of the litigation/Award. This reasserts the fact that although arbitration is itself a progressive, efficient system to resolve complex cases like cross-border and construction cases, delays in their enforcement can be a major deterrent to them unless judicial interventions are introduced to have prompt action in derivation. · Cross-Border Disputes In a globalized world, real estate companies from various countries clash over multiple disputes, such as contract violations. Unlike litigation, which involves jurisdictional and delay issues, disputes in arbitration can be resolved without these challenges and promptly. In Eitzen Bulk A/S vs Ashapura Minechem Limited & Anr , the court, in its opinion, divided the panel into two groups and held that the panel is liable to one group and not the other.  The Supreme Court upheld the New York Convention and its application towards enforcing a foreign arbitral award even in cases where the Indian party is opposed to the award. The Court made it clear that on the fulfillment of conditions under Section 47 of the Arbitration and Conciliation Act, 1996, the award should be enforced unless it comes under rare exceptions under Section 48. In focusing on the notion that there exists a pro-enforcement bias, it was noticed that the public policy objections have to be interpreted narrowly. The Court added that the enforcing court is not entitled to practise on the merits of the award being enforced overseas or internationally, but to merely examine whether the award fits into the narrow grounds prescribed in section 48. This further ascertains the effectiveness of arbitration as a tool to settle even intricate international disputes, such as real estate and construction disputes. ·  Construction Related Disputes Disputes during construction are usually more complicated and complex. Technical problems, for example, fixing the wrong materials, facing construction delays due to design obstacles, delays caused by labor problems, and extenuating circumstances such as force majeure events, are very common in such cases. The traditional court system is not flexible and lacks specialists in technological advancements field and thus, it struggles to deal with such multifaceted cases promptly. On the other hand, arbitration can adjust the process and bring in experts in the involved field. A party might determine in the arbitration clause that certain hearings will be fast-tracked or that interim relief can be quickly granted for ongoing projects. An arbitrator who has experience in construction, design, or engineering can check blueprints, inspection records, or charts. Additionally, arbitration offers options like examining the site, using digital models, and questioning experts simultaneously. The Supreme Court, in McDermott International Inc. v. Burn Standard Co. Ltd. & Ors . , observed that the technical and construction disputes are well-suited to arbitration since parties are permitted to select arbitrators on the basis of relevant legal as well as subject-matter expertise. The Court made it clear that arbitrators possess the role of final judges of fact and law and that courts must not use the facts or even make a reappreciation of the evidence or replace their opinions with the technical findings. It held: The jurisdiction of the court is not an appeal jurisdiction; the award is not liable to be challenged because the arbitrator has uncritically come to his own conclusions or because he has ignored facts. This demonstrates how arbitration offers the flexibility, specialisation, and swiftness of a specialised method of handling construction disputes that demand technicality as well as legal adjudication. In conclusion, Arbitration simplifies construction disputes, takes into account the technical and legal issues, and issues decisions that are both right and valuable for business. While arbitration has proven effective in addressing a range of real estate conflicts, from cross-border investment disputes to construction-related complexities, its growing use has also revealed several persistent challenges. These barriers, unless addressed, may undermine the efficiency and reliability of arbitration as a dispute resolution mechanism in the real estate sector. Barriers to Effective Arbitration Arbitration is unquestionably a more practical and favored approach than the conventional litigation system. However, it has  some challenges and problems, some of which are listed below: ·  Multiple Party Disputes Most real estate projects have developers, landowners, investors, buyers, and contractors working together, and some of their agreements include arbitration clauses, but not all do. So, there are jurisdictional issues, cases are tried in more than one venue (civil courts, consumer tribunals, RERA, arbitrators), and the decisions vary. Examples are: Disputes between landowners and developers in township projects being decided by arbitrators, and buyers of flats turning to consumer courts when their buildings are delayed, leading to slow and divided dispute handling. ·  Outdated Laws of Arbitration   The Arbitration and Conciliation Act, 1966 was last modified in 2019. Since then, no further changes have been made, leaving the law outdated for the new challenges created by technological advancements. With the introduction of Artificial Intelligence (AI) and blockchain technologies, the inadequacy of laws has become more pronounced. For Instance, The Rise of Proptech and Smart Contracts in the Indian Real Estate sector has transformed how real estate transactions are completed, verified and followed. Many land registration services and digital contract negotiation platforms are now built with the assistance of blockchain and AI. At the same time, these new technologies have worsened cybersecurity problems, including unauthorized data theft, changes to blockchain records, digital land title fraud, and AI errors in contract execution. Despite the increasing prevalence of such issues, the existing statutes lack a comprehensive framework to address technology-driven difficulties, which is one of the pressing concerns in the real estate industry. Strengthening Arbitration for Real Estate Disputes There are indeed problems or challenges with the arbitration process, but we cannot reject its benefits in resolving disputes. With some suggestive and practical approaches, we can resolve these disputes. For instance, amending the Arbitration and Conciliation Act,1963, and adding descriptive arbitration clauses in contracts under RERA, additionally improving the system with modern technologies and algorithms. Some of the suggestions that make arbitration more effective are listed below: ·  Creating Consolidated Arbitration Systems Especially for Real Estate Projects Construction contracts are structurally different, although at the core they are similar to ordinary ones as they are governed by the principles of contract law, such as the liquidated damages, termination clauses, or the performance aspects. Unlike bilateral construction disputes, the real estate projects involve various contracts and various parties: developers, landowners, contractors, investors, and numerous buyers. Such a multiplicity leads in most cases to concurrent proceedings before arbitral tribunals, consumer forums, civil courts, and RERA authorities, leading to conflicting results. That’s why India should have a special arbitration framework for this sector. One can implement this in these two main ways: a) As an alternative to simply mandating all agreements to be subject to standard arbitration provisions, India could also set up project-specific arbitrating bodies in real estate mega-projects. These panels would have a consistent panel of arbitrators specialising in real estate, construction, and finance disputes, and serve as a single tribunal to all disputes that occur in a project, regardless of the specific contract in question. They may hold parallel hearings on the related controversies, say, buyer-developer or contractor-developer disputes, to uphold consistency in the awards. b) Real estate arbitration institutions ought to set clear guidelines to handle consolidation and allow parties to join, even when not all have an existing arbitration agreement. SIAC and ICC have these tools, and India should also have them for its domestic real estate arbitration. ·  Modification of Law Regarding Digital and Electronic Contracts in Arbitration, by amending the Arbitration and Conciliation Act to explicitly accept arbitration agreements formed via emails or chats or paper documents stamped electronically, when there is a clear agreement and both sides consent. As a result, many property transactions that presently cannot use arbitration would become legal through arbitration clauses. Because new PropTech applications use things such as smart contracts, AI, and blockchain technology, the law should be changed to accept them as valid in arbitration cases. Provisions need to state that blockchain data can be used as evidence, and permission is given to arbitrators to take interim measures for cases involving digital fraud, data breaches, or automated contract mistakes. It would also be helpful if arbitration institutions set up panels made up of experts in technology and let digital forensics experts aid in the process. Because of these reforms, arbitration will continue to be useful and important even as real estate goes digital. Conclusion Alternative dispute resolution through arbitration is now considered highly reliable for settling real estate issues. Since it provides flexibility, takes privacy into account, and involves experts knowledgeable in special sectors, it is widely used for construction issues, foreign investments, and involves many parties. Arbitration allows for a different method in the legal system, since it is often faster and more convenient than litigation. Due to its ability to use current technology, arbitration remains an attractive method for managing real estate deals. However, to untapped its full potential, it needs updated laws, improved contractual processes, and changes like setting up peer review and confidential databases of support. With necessary amendments, arbitration becomes more effective to support the real estate industry’s progress and stability and provide useful and prompt solutions. [1] He is a second-year law student of B.A.LL.B (Hons.) Course at Rajiv Gandhi National University of Law, Punjab. E-Mail: piyushsingla24011@rgnul.ac.in .

Prabhas Kumar [1] & Surya Prakash Swain [2] Introduction The Supreme Court’s (“ SC ”) majority ruling in Gayatri Balaswamy v. ISG Novasoft Technologies Ltd. (2025) ( “ Gayatri Balaswamy ” ) holds that Indian courts may, in narrow circumstances, modify arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996 ( “ the Act ” or “ the 1996 Act ” ). The erstwhile Chief Justice Sanjeev Khanna, while writing for the 4:1 majority bench, reasoned that the existing recourses available to the court when an award is challenged essentially leave the parties at three difficult positions — (i) to have the award annulled in its entirety, (ii) severed and enforced in part, or (iii) be sent back for re-arbitration upon their consensus. This, as per the Majority, negates the raison d’être of the arbitral process, i.e. , cost-effective and expeditious dispute resolution, and hence necessitates the Courts to “ hammer out the creases ” through a limited power of modification. The dissenting opinion by Justice Viswanathan, now the cornerstone of most criticism against this landmark judgment, contends that the absence of an explicit statutory power to modify awards under the 1996 Act constitutes a clear bar on such judicial intervention and flags multiple concerns regarding this new power. The present article engages with and responds to the principal criticisms of the judgment, addressing each in turn, effectively demonstrating how the Apex Court has chosen pragmatism over pedantry while strengthening India's Arbitration Regime. A Jurisprudence of Contradiction: The Road to Gayatri Balaswamy To understand the monumental significance of the ruling in Gayatri Balaswamy, one must first journey through the jurisprudential wilderness that plagued the Indian arbitration regime for the last three decades. The Arbitration Act of 1940 dominated the landscape preceding the present statute. It treated arbitral tribunals as junior partners in the judicial process. Its provisions, particularly Sections 15 and 16, armed courts with sweeping powers to " modify or correct " awards , effectively turning arbitration into a mere dress rehearsal for protracted court battles, and fostered a culture of excessive judicial meddling. The 1996 Act, inspired by the principles of the UNCITRAL Model Law of 1985 , was intended to be a revolutionary departure from this inconsistency. Its stated objective , " to minimise the supervisory role of courts in the arbitral process ," was a clear legislative mandate to break from the interventionist past. The conscious excision of the word "modify" from its text was the boldest symbol of this new, pro-arbitration philosophy. However, the ghost of modification, fuelled by judicial discomfort with absolute powerlessness in the face of injustice, refused to be banished. This led to a deeply schizophrenic jurisprudence, where the judiciary's actions often stood in stark contradiction to its stated principles. In McDermott International Inc v Burn Standard Co Ltd , the Court declared that it " cannot correct errors of the arbitrators ," only to paradoxically modify the award on the question of interest by invoking its plenary powers under Article 142 . Conversely, in Project Director, NHAI v M Hakeem, a different bench drew a stark " Lakshman Rekha ,"   declaring with rigid finality that the power to modify was utterly non-existent under Section 34. This created a jurisprudential black hole, forcing courts into an untenable choice between complete abdication—rubber-stamping an award with patent errors—and total annihilation—setting aside the entire award for a single, rectifiable flaw. Beyond the Black Letter: Purposive Interpretation and Legislative Intent Arguably, the most outspoken critique of Balaswamy is rooted in textualist fundamentalism. Sceptics posit that the Parliament's silence on modifying arbitral awards in the Act is an exclusive prohibition. This issue thus crystallises into a difficult doctrinal question: Can judicial inference fill a deliberate legislative omission? This rhetoric, eloquently championed by Justice Viswanathan in his dissent, elevates the form over the substance and ignores the very purpose for which the 1996 Act was conceived . The Act's raison d'être is to promote an efficient, speedy, and fair dispute resolution mechanism. It is an affront to this core objective to suggest that a multi-million-rupee award, the product of years of tedious proceedings, must be entirely invalidated due to a patent mathematical error that could be rectified in a single court hearing. We thus assert that the majority’s purposive interpretation does not usurp Parliament's role but rather breathes life into it. The legislative intent was to preclude a merits-based, appellate-style review, not to forbid the corrective intervention essential to cure a self-evident and outcome-altering blunder. Forcing parties back to square one imposes unnecessary hardship and financial burden upon the parties that chose this process for its cost-effective and expeditious nature, thereby defeating the statute's very purpose. The dissent argues that courts cannot touch an arbitral award unless the statute gives them clear authority. On paper, this may sound faithful to legislative limits. But in practice, it traps the judiciary in procedural paralysis. Imagine an award with a simple interest miscalculation. The party must either accept the incorrect figure or spend months getting consent from all signed parties to reopen the arbitration just to correct a clerical error. The majority takes a more practical approach. It lets courts fix such obvious mistakes, not to change the law, but to make arbitration function as Parliament intended. The Inevitable Corollary: How Severability Paved the Way for Modification Furthermore, the ability to modify is not a new idea created out of nothing. It is a logical and unavoidable result of the established principle of severability, a principle that has deep roots in the Court's decisions under the 1996 Act. This principle draws its vitality from the judicial landscape shaped by the landmark decision in ONGC Ltd v Saw Pipes Ltd , which empowered courts to review awards for 'patent illegality.' The logical consequence of finding such illegality in only one part of a multi-claim award was demonstrated in cases like J.G. Engineers (P) Ltd v Union of India , where the Court held that if a matter is severable, the court must segregate the award and set aside only the problematic part . The majority took this established practice to its logical conclusion, stating unequivocally that "the limited and restricted power of severing an award implies a power of the court to vary or modify the award." The dissent’s attempt to distinguish between "severing" (permissible) and "modifying" (impermissible) is an exercise in semantic gymnastics that collapses under the weight of practical reality, a point extensively debated in legal commentary . A Surgical Scalpel, not a Sledgehammer: Defining "Manifest Error" The fear that permitting courts to correct “manifest errors” would surreptitiously introduce a merits review rests on two faulty premises – that judges cannot exercise restraint and that the threshold of intervention is low. We argue that both are misplaced apprehensions. As a starting point, we need to remember the limitation that the court sets for modification :  a. Courts can correct clear clerical or typographical errors, but only if this correction does not reopen the main issue and lead to a trial focused on the merits.  b. If a problematic part of an award can be separated, only that part may be changed.  c. Courts can change post-award interest only in exceptional cases, while pendente lite interest stays within the tribunal’s authority.  d. In rare situations, the Supreme Court may use Article 142 to adjust an award to achieve complete justice. This conjecture is not entirely new. Arbitral tribunals have already held similar power under Section 33 of the Act . The court’s role here does not involve interference; it focuses on efficiency. The goal is to prevent the delay and duplication that a formal remission under the statute would cause. History shows that courts have used their authority to correct arbitral awards responsibly. The ruling in J.C. Budharaja is one example where the Supreme Court reduced an award that exceeded the relief sought, effectively lowering it to the appropriate amount. Following the formal process for a remission in this case and gathering the consent of the parties to re-establish the tribunal would have been unnecessary. Similarly, the benchmark for "patent illegality" is authoritatively laid by the Supreme Court in Associate Builders v Delhi Development Authority . It is not just any error of law, but something that " goes to the root of the matter. " A manifest error is a species diluted within this genus of patent illegality. It is an error that is self-evident and requires no comprehensive submissions or re-appreciation of evidence. On realisation of this defect, the courts are already allowed to set aside in entirety or sever and enforce an award in part under s.34. We support the court on the conclusion that the presence of manifest error shall also be a legitimate ground for the limited modification of an award within the contours of s.34. This is obviously not the same as rewriting the award due to unpalatable reasoning. Such intervention is liable to scrutiny as it crosses the lines s.34 and s.37 draw. Balaswamy, however, creates a functional tool that can be used only where sending the award back would be unnecessary or harmful. The line between a rectifiable error and a merit-based finding is clear, and the courts have identified and undisputably respected that line for decades. To illustrate, if a contract specifies liquidated damages at ₹1 lakh per day and the arbitrator correctly finds a 20-day delay but calculates the damages as ₹2 lakh instead of ₹20 lakh, that is a manifest computational error ripe for modification. However, if the arbitrator, after weighing evidence, determines the delay was only 10 days, not 20, that finding on the merits is sacrosanct and beyond the court's modifying power. This distinction is the bedrock of the majority’s ruling, a surgical scalpel designed to excise a cancerous error, not a sledgehammer to demolish the entire edifice. A Pragmatic Distinction: The Power to Modify Post-Award Interest Nowhere is the majority’s pragmatic approach more evident than in its nuanced handling of interest modification, a point often seized upon by critics as the prime example of judicial overreach. This criticism, however, ignores the crucial firewall the Court has erected between different periods of interest, thereby safeguarding the arbitrator's core domain. The judgment draws a bright line between pendente lite interest (from cause of action to the award) and post-award interest (from award to payment). The Court holds that pendente lite interest, being a matter of the arbitrator’s discretion based on the merits and evidence presented, cannot be modified by a court under Section 34. If found to be patently illegal (e.g., contravening an express contractual bar), the court’s only power is to set it aside, not to substitute with its own rate. This finds resonance in the judicial self-restraint shown in cases like Krishna Bhagya Jala Nigam Ltd v G Harischandra Reddy , where the Supreme Court, to modify an interest rate, had to invoke its extraordinary powers under Article 142, implicitly acknowledging that no such general power vests in courts hearing a Section 34 petition. The true innovation lies in the court's handling of post-award interest, which is not an adjudication on past events but a provision for future compliance. The majority rightly recognized that an arbitral tribunal is not clairvoyant; it cannot foresee extensive delays during prolonged challenge proceedings under Sections 34 and 37. An interest rate that is compensatory at the time of the award can become grossly punitive over time due to supervening circumstances like a drastic fall in commercial lending rates. This is not a hypothetical fear; in Vedanta Ltd v Shenzden Shandong Nuclear Power Construction Co Ltd , the Supreme Court itself modified post-award interest to reflect commercial realities and prevent an unjust windfall. The power to modify post-award interest, therefore, is not about second-guessing the arbitrator’s finding but about ensuring the remedy remains equitable in light of post-award events. A court cannot modify this interest simply because it disagrees with the rate; the modification must be justified by circumstances arising after the award that render the original rate so unconscionable as to shock the conscience of the court and thus become patently illegal in its effect . This carefully calibrated power is a necessary tool for justice, not a license for interference, ensuring that the fruits of arbitration are not poisoned by the passage of time. Debunking the Myth of International Unenforceability Finally, the concern regarding the enforceability of a modified award under the New York Convention is the ultimate red herring; the primary objection raised was that a modified award would "merge" with the court's order, becoming a "court decree" and thus unenforceable under the Convention, which applies only to "arbitral awards." [1] Firstly, the idea of courts stepping in to make limited corrections to arbitral awards is well-established internationally. Other Model Law jurisdictions allow similar, limited court variation. Section 49(8)(b) of Singapore’s Arbitration Act 2001 lets courts vary awards where a question of law substantially affects the parties’ rights and the tribunal’s decision is “obviously wrong”, “raises serious doubt”, or where court intervention is “just and proper”. The Singapore Academy of Law’s 2020 report even urged extending that approach to international cases by amending the International Arbitration Act 1994. Australia follows a similar path: the Commercial Arbitration Act 1986 contains parallel modification provisions in sections 38(3)(a) and 38(7). Secondly, the claim that an internationally enforceable award becomes vulnerable once a court makes limited modifications also does not hold. The Court dismantled this by noting that the doctrine of merger does not apply to s.34 proceedings, which are not appellate in nature but are for setting aside an award. More crucially, the Court focused on the precise language of Article V(1)(e) of the Convention , which allows refusal of enforcement if an award "has not yet become binding on the parties" under the law of the seat. The Court reasoned that an award, once modified by the supervisory court at the seat, is the only version that is legally "binding" in India. Therefore, for international enforcement, the award "as modified by the judgment/order under Section 34" is the final, binding arbitral award. The Court correctly concluded that to hold otherwise would create an absurd situation where an award found to be partially illegal by the seat court would still have to be enforced abroad in its original, flawed form. Much Ado About Nothing The majority opinion in Gayatri Balaswamy is a deliberate shift away from a rigid, binary interpretation of the scope of powers under Section 34. Though concerns about statutory limitations hold are persuasive, these reasons are compelling enough to believe that narrowly circumscribed powers of modification can align with the broader structure of the 1996 Act, while also advancing its raison d'être of expeditious dispute resolution. Post-1991 liberalisation, arbitration was rebranded to appeal to international commercial players. These users prize predictability: in both process and outcome. That’s why they prefer arbitration over traditional courts. The present ruling helps in clarifying on how the courts may tweak awards. Courts aren’t outsiders to arbitration; they’re integral to its architecture. Their job is to ensure the system works smoothly, not to bounce parties back to square one. By limiting the scope for correction, the court has improved predictability. Now, parties know exactly what errors can be addressed during an appeal. How these new judicial powers play out indeed remains to be settled through future rulings; however, an examination of existing jurisprudence suggests that these developments do not necessarily risk branding India as hostile to arbitration. India needs carefully calibrated judicial oversight that remedies chronic challenges plaguing its arbitration landscape. Although it is really unlikely that the tension between judicial oversight and the principle of arbitral finality will be resolved once and for all, the efforts to recalibrate this tussle into a workable equilibrium are nevertheless praiseworthy. [1] First Year BA LLB (Hons) Student at Gandhinagar National Law University [E-mail: prabhaskumar2607@gmail.com ] [2] Second Year BA LLB (Hons) Student at National Law University Odisha [E-mail: 24ba097@nluo.ac.in ] [1]  Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958, entered into force 7 June 1959) 330 UNTS 38 (New York Convention).

Shirin Sarkar * Introduction: Setting Sail The maritime industry, much like the vast oceans it sails upon, is no stranger to turbulent waters, especially when financial disputes surface. Such disputes can leave ships stranded in a storm of legal complexities, with no clear direction in sight. However, in India, the convergence of two powerful legal forces – the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, and the Arbitration and Conciliation Act, 1996 – offers a navigational chart to guide the way through these rough seas. This blog embarks on a voyage through the intersection of these two vital laws, uncovering how they work in tandem to resolve maritime claims and facilitate arbitration. The Admiralty Act serves as a beacon, providing a specialized legal framework for addressing disputes related to ships, freight, ownership, and damages. Meanwhile, the Arbitration Act acts as a lifeboat, offering parties an alternative, quicker, and often more cost-effective route to resolution, away from the heavy anchor of traditional court proceedings. The Admiralty Act - Enforcing Maritime Claims The  Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017  serves as a crucial legal framework for addressing maritime disputes in India. This Act consolidates various existing laws and empowers admiralty courts to protect the rights and interests of claimants, akin to a crew navigating through turbulent waters in search of justice. Notably, these courts possess the authority to arrest vessels, a significant legal mechanism that enables claimants to secure their claims by immobilizing a ship's operations. This tool is particularly vital in cases involving unpaid wages or damages, where prompt intervention is essential to prevent further losses. Under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 , admiralty jurisdiction is vested in several High Courts across India, extending to their respective territorial waters. This expansion allows for comprehensive oversight and enforcement of maritime claims. For instance, if a shipping company defaults on cargo payments or fails to address damages during transit, the aggrieved party can petition an admiralty court for an arrest order. Such action not only provides a strategic negotiating advantage but also ensures that the vessel remains under the court’s jurisdiction until the dispute is resolved. The Act clarifies the conditions under which courts can exercise this authority, encompassing claims related to vessel ownership, mortgages, and other maritime liabilities, thereby streamlining the legal process for addressing maritime disputes effectively. The Arbitration Act - Alternative Resolution at Sea In contrast, the Arbitration and Conciliation Act, 1996 offers an efficient and confidential alternative dispute resolution mechanism favoured by businesses, particularly in shipping contracts. These contracts often include arbitration clauses, allowing parties to resolve disputes outside of traditional litigation. The Act promotes finality and expedience, essential for the fast-paced nature of international trade. It governs both domestic and international arbitration, enabling Indian businesses to engage confidently in global markets. However, the interaction between arbitration and admiralty law raises important questions, especially when disputes occur simultaneously with arbitration proceedings. The Maritime Arbitration Rules further clarify the framework for resolving maritime disputes under the Arbitration Act. While Indian courts increasingly support arbitration agreements and foreign arbitral awards, challenges remain in enforcing these agreements amid ongoing admiralty proceedings. Striking a balance between judicial independence and a pro-arbitration environment is crucial for fostering confidence among international stakeholders. The Collision Course: When Admiralty Meets Arbitration The intersection of ship arrests and arbitration clauses creates a complex legal landscape. A key scenario arises when parties seek to freeze a vessel while engaging in arbitration negotiations. Although it is permissible to arrest a ship even during ongoing arbitration, this can lead to jurisdictional conflicts and procedural challenges. Claimants often view ship arrests as a form of legal insurance, ensuring that assets remain available should they prevail in arbitration or litigation. The International Convention on Arrest of Ships allows for such arrests specifically for maritime claims, reinforcing the notion that a ship may be arrested to obtain security even if the merits of the claim are to be adjudicated elsewhere due to an arbitration clause. This mechanism becomes particularly critical in international contexts where vessels are often registered under different flags, complicating enforcement. However, the arrest can complicate arbitration proceedings , as courts must balance the interests of both parties while navigating overlapping jurisdictions. Judicial decisions play a pivotal role in this dynamic; courts act as mediators, striving to ensure that neither party is left adrift amid conflicting legal obligations. Recent rulings have clarified that while courts can uphold arbitration agreements, they also retain the authority to grant arrest orders when justified by maritime claims. This duality emphasizes the necessity for careful consideration of both admiralty principles and arbitration agreements, ensuring that the rights of claimants are protected without undermining the arbitration process. Case Studies: Tales from the Courtroom Seas Two notable cases illustrate the complexities at the intersection of admiralty law and arbitration: 1. In Raj Shipping Agencies v. Barge Madhwa [ Raj Shipping Agencies v. Barge Madhwa, 2020 SCC OnLine Bom 651 ], the Bombay High Court addressed the interplay between the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 and arbitration principles within the context of insolvency proceedings. The court ruled that an Action-in-rem could be initiated even during a winding-up order or moratorium under the Insolvency and Bankruptcy Code, 2016 (IBC) , clarifying that no leave under Section 446(1) of the Companies Act, 1956 , is required to commence or continue admiralty actions. The court emphasized that actions in rem target the vessel itself, allowing claimants to secure their rights independently of a corporate debtor's insolvency status. This ruling affirms that the Admiralty Act operates as a special law governing maritime claims, coexisting with the IBC. Ultimately, the judgment safeguards maritime claimants' interests while ensuring that admiralty courts retain exclusive jurisdiction over maritime matters, even amid insolvency proceedings. 2.     The Bombay High Court's judgment in Altus Uber v. Siem Offshore Rederi AS [Altus Uber v. Siem Offshore Rederi AS, 2019 SCC OnLine Bom 1327] sheds light on the compatibility of admiralty jurisdiction with arbitration proceedings under Indian law. The court clarified that the presence of an arbitration agreement does not preclude the institution of an admiralty suit for securing claims through mechanisms like ship arrests. It emphasized that any security obtained in an admiralty action could be retained, even if the suit is stayed in favor of arbitration. Furthermore, the court highlighted the broader scope of Section 5(2) of the Admiralty Act, 2017, which permits the arrest of a ship owned or demise-chartered by the liable party, diverging from the 1999 Arrest Convention's limitations. This decision underscores a pragmatic approach that balances the needs of maritime commerce with the principles of arbitration, ensuring claimants can effectively safeguard their interests while resolving disputes through arbitration. These two cases emphasize the nuanced relationship between admiralty law and arbitration, demonstrating that both legal frameworks can coexist while serving distinct yet complementary purposes. Raj Shipping Agencies v. Barge Madhwa underscores the autonomy of admiralty courts to address maritime claims as actions in rem, even amidst insolvency proceedings, safeguarding claimants’ rights to secure their interests irrespective of the debtor's financial status. Meanwhile, Altus Uber v. Siem Offshore Rederi AS highlights the flexibility of admiralty jurisdiction to coexist with arbitration, enabling the arrest of ships to secure claims without undermining the arbitration process. Together, these cases showcase the adaptability of Indian maritime law in balancing the interests of claimants, creditors, and international commerce, while fostering confidence in India’s legal system as a reliable forum for resolving maritime disputes. Challenges: Stormy Waters Ahead Despite advancements in maritime law, several challenges persist, particularly regarding jurisdictional ambiguity, which often leads to confusion in maritime arbitration. This ambiguity complicates efforts to resolve disputes efficiently, as different jurisdictions may interpret laws and arbitration agreements differently. Additionally, legal bottlenecks can arise when ship arrests delay arbitration proceedings, further complicating the resolution process for all parties involved. As global trade continues to evolve, it is imperative for India’s maritime laws to adapt to international standards. Aligning Indian practices with UNCLOS will effectively clarify most jurisdictional ambiguities in maritime disputes. UNCLOS can potentially clarify maritime boundaries in a significant way, as in the case of the arbitral award over the maritime boundary in the Bay of Bengal between Bangladesh and India . Under Annex VII of UNCLOS, the award for and against the two war parties established simple legal frameworks that assign specific entitlements for each country for about 406,833 square kms of maritime territory. Based on the tribunal's decision, Bangladesh received about 106,613 square kms and India around 300,220 square kms, which is a good case in proving how effective UNCLOS can be in delimiting boundaries and reducing conflicts. By allowing for the structured disposition of any maritime claims, UNCLOS also enables India to exercise its sovereign right over the control of its resources and work with cooperating neighbouring states. Such an alignment would reaffirm India's sovereignty regarding its territorial waters and EEZ and regain its credibility among the other nations, thereby promoting regional goodwill and default stability in maritime governance. The interaction between admiralty courts and arbitration forums must be streamlined to ensure that legal proceedings do not become protracted due to jurisdictional disputes. Legislative reforms are urgently needed to harmonize domestic regulations with global benchmarks. This alignment will not only enhance the efficiency of dispute resolution but also ensure that India maintains its position as a competitive and attractive hub for maritime commerce. By addressing these challenges, India can better facilitate international trade and protect the interests of stakeholders in the maritime industry. Charting a New Course: Recommendations To address the challenges and improve the interplay between admiralty law and arbitration in India, several recommendations emerge: ·  Clearer Maps: Legislative amendments should be made to align the Admiralty Act and Arbitration Act more closely. Amendments could clarify admiralty court jurisdiction with arbitration clauses, streamline ship arrest procedures to align with arbitral outcomes, enhance foreign award enforcement, and adopt international best practices for maritime arbitration, ensuring efficiency and consistency. This alignment would provide clearer guidelines on how these laws interact in practice, reducing jurisdictional ambiguity that currently complicates dispute resolution. · Smoother Sailing: Implementing comprehensive training programs for maritime lawyers and arbitrators would enhance their understanding of both areas of law. Such education could lead to improved dispute resolution outcomes and foster a more cohesive legal environment for maritime arbitration. · Learning from Lighthouses: Insights from jurisdictions like Singapore and the UK can inform best practices in navigating maritime disputes effectively. Singapore’s SCMA offers a specialized, flexible framework for maritime disputes, supported by courts that enforce arbitration awards with minimal interference. Similarly, the UK’s LMAA emphasizes procedural efficiency, confidentiality, and enforcement under the New York Convention, showcasing arbitration-friendly environments that integrate seamlessly with maritime laws. By studying these models, India can adopt strategies that streamline arbitration processes, enhance enforcement of awards, and ensure that maritime claims are handled efficiently. This proactive approach will not only strengthen India's legal framework but also bolster its position as a competitive hub for international maritime commerce.  By implementing these recommendations, India can better navigate the complexities of maritime law and arbitration, ensuring a more robust framework for resolving disputes in the shipping industry. Conclusion: Anchoring Clarity In conclusion, the successful harmonization of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, with the Arbitration and Conciliation Act, 1996 is crucial for bolstering India's legal framework in resolving maritime disputes. The interplay between these two laws plays a pivotal role in facilitating timely, efficient, and equitable dispute resolution in the maritime sector. However, jurisdictional ambiguity and procedural challenges continue to pose significant obstacles. To address these issues and improve the current system, legislative amendments are essential. By aligning the Admiralty Act more clearly with the Arbitration Act and establishing uniform guidelines for handling ship arrests during arbitration proceedings, India can eliminate jurisdictional conflicts and streamline the legal process. Furthermore, enhancing the training of maritime lawyers and arbitrators will ensure a deeper understanding of both legal systems, promoting more effective dispute resolution. Drawing lessons from global jurisdictions such as Singapore and the UK will enable India to adopt best practices, enhancing both the enforcement of arbitration awards and the overall efficiency of maritime dispute resolution. These steps will not only safeguard the interests of maritime claimants but will also strengthen India's position as a reliable and competitive hub for global trade. Ultimately, implementing these reforms will ensure that India’s maritime legal system remains dynamic, responsive, and in harmony with international standards, paving the way for smoother sailing in resolving maritime disputes. *Shirin Sarkar is a 2nd Year student at Maharashtra National Law University, Aurangabad.

Avesta Vashishtha [1] INTRODUCTION The integrity and effectiveness of arbitration as an alternative dispute resolution mechanism rely on the fair and informed decisions rendered by arbitral tribunals. However, there are instances where arbitral awards fail to address crucial and contentious issues, leading to a miscarriage of justice and violation of public policy. In such cases, the appellate court sets aside the arbitral award delivered by the tribunal without considering a crucial claim, while exercising its powers of setting aside an award under Section 34 (hereinafter ‘Sec. 34’). The continuous affirmation of the same by various High Courts, after the principle was established by the Supreme Court in the case of I-Pay Clearing Services , necessitates the recognition of violation of the basic intent of ‘The Arbitration and Conciliation Act, 1996’ if such awards are not set aside. This article entails a discussion on the infringement of rights in such situations and the aid of Sec. 34, analysing the perspective of various High Courts in dealing with set-aside applications. Further, it has been suggested how remitting such perverse awards back to the tribunal can be an efficient recourse. PERVERSITY DUE TO DISREGARD OF CONTENTIOUS ISSUE The general concept in view of various precedents in arbitration law has been that a flaw that can be corrected or removed from the award, shall be referred back to the tribunal for such correction under Sec 34(4), instead of simply setting it aside. But in numerous cases, the flaw is not curable, and the same is caused due to the sheer lackadaisical approach of the tribunal in recognising, acknowledging, and then discussing the major issues related to a dispute. The rights of the parties are so gravely affected that the award cannot be corrected by referring it to the same tribunal. The scope of Sec. 34 is set by the Supreme Court to allow the setting aside of such awards which are ‘perverse’ and patently illegal in nature due to disregard of a contentious issue. The term perverse has been interpreted widely to include a finding based on “no evidence at all or an award which ignores vital evidence” in arriving at its decision would be perverse and liable to be set aside on the grounds of patent illegality. CREATION OF CONUNDRUM W.R.T CONTENTIOUS ISSUES AND EVIDENCE The challenges posed by tribunals' ignorance of pertinent issues and evidence manifest in two ways: neglecting crucial evidence despite acknowledging the issue and completely overlooking a pertinent issue in the award. Either the tribunal acknowledges the issue, but fails to base its award on the evidence presented during the proceedings, or it altogether does not recognise a pertinent issue in the award. The former illegality is discussed frequently by courts when crucial evidence is ignored by the tribunal while passing an award. When the parties have put on record certain important aspects of the dispute, which are essential for concluding their rights, but the tribunal neglects such evidence, such award has been termed perverse in several judgements. In the latter situation, the tribunal is unable to conclusively determine the enforceable rights of the parties, let alone grant a legitimate award. For eg., an issue of limitation in a time-barred dispute would be a contentious aspect of the dispute, and passing an award without considering this issue would render the award patently illegal. If the award is given without any discussion on this issue, it would be unjust for the party against whom the award is passed, since the award holder would have taken advantage of the tribunal’s mistake by enforcing a right that has been statutorily prohibited. Another example is, if a party has surrendered a right and has been estopped from enforcing the same, or the Court has restricted it from raising certain claims during arbitral proceedings, but the unreasonable findings of the tribunal, wholly disregarding the existence of such facts, presents an award that goes against judicial orders of the court. JUDICIAL APPROACH TOWARDS SUCH AWARDS The Supreme Court, in the I-Pay Clearing Services case, conclusively decided the question of patent illegality when the tribunal failed to examine certain contentious issues, and held “in absence of any finding on contentious issues, no amount of reasons can cure the defect in the award”. Therefore, in such cases, the award cannot be remitted back to the tribunal for curing the same. This ruling has been followed in numerous High Court judgements. The Delhi High Court has recognised that such awards would be liable to be set aside under Sec. 34, and stated “While the Arbitral Tribunal had also duly taken notice of the contentious issue, unfortunately, the award is entirely silent on this issue. In the considered opinion of this Court, the Ld. Arbitral Tribunal has committed a manifest error in not coming to any finding on this issue.” It has been held in Inox Air Products (P) Ltd. v. Air Liquide North India (P) Ltd , “The learned arbitrator cannot reconsider his conclusion, or that Sec. 34(4) of the Act cannot be resorted to in a situation where the award itself may change as a result.” It has also been commented that such awards suffer from ‘incurable defects’ by not dealing with a party’s contentions [2] . Further, “a finding is based on no evidence, or an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.” The same perspective was also held in the landmark judgement of Ssangyong Engg. & Construction Co. Ltd. v. NHAI . UNNECESSARY MEDDLING BY COURTS The author opines that the argument where the arbitrator would not be able to appreciate the evidence a second time if it was ignored the first time, seems vividly exaggerated. If the award is remitted back to the tribunal, the arbitrators would be aware of the missing gaps in the award, and the same can be rectified specifically. Additionally, in numerous cases, arbitrators from non-legal backgrounds are appointed to deal with the technicalities of the subject matter that might be involved in the dispute. They are sometimes not aware of the procedural aspects of the legal system. An opportunity shall be given to them to rectify their errors and learn from the procedure so that they may render better awards in the future, without setting aside the whole award. Further, it has been abundantly established that the intent of Sec. 34 is to eliminate any curable defects from the award, which can only be done by the arbitral tribunal , and not by the court due to the principle of minimal judicial interference. Therefore, it is essential to remit the award back to the tribunal for deciding a pertinent issue. However, a problem exists where the court has to determine whether the lack of consideration given to certain evidence or contentious issue by the arbitrator renders the award totally incurable, or it can be remitted back to the tribunal for removing flaws. The test of perversity lies in the reasonableness of the decision of the arbitrator. The appellate courts have to determine perversity as follows -: “If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with”. The ambiguous and wide scope in Sec 34(4) exercised in such cases can create discrepancies in different cases, where the court is burdened with the discretion to decide the contentious issues of the dispute, and whether the same should be referred back to the tribunal owing to their curable/incurable nature. The court’s powers are restricted to determining the same, and not entering the merits of the case that has already been heard at length. Hence, the court is left with the sole alternative of setting aside the award. The approach of determining reasonableness in the award is followed while evaluating perversity, but the same does not have any set standard of rules that govern ‘reasonableness’ in an award. Therefore, the appellate courts have to conclude whether an award is reasonable, and there is sufficient scope correcting the award by remitting it back to the tribunal even where a contentious issue has been omitted. One of the standards for remitting back an award is whether the arbitrator failed to determine an issue because of ‘ pure oversight ’, and if the same can be corrected, it should be remitted back to the tribunal. This would be a subjective test based on factual circumstances of different cases. CONCLUSION The award should be sent back to the tribunal for the arbitrators to consider the relevant issue or evidence, and alter the award if needed. The same would be based on the legal intent of arbitration, wherein enforcement of awards is given a superior pedestal with due relevance than simply abrogating the award. There might be certain aspects of a dispute which, if ignored, would lead to grave injustice and biases in the award rendered by the arbitrator. The recent developments in the judicial sphere concerning awards omitting ‘contentious issues’ has been inclined towards setting aside such awards. But at the same, the courts must restrain itself from setting aside each award instantly. Striking the right balance between setting aside awards and allowing tribunals to rectify curable defects can uphold the integrity of arbitration and ensure justice prevails. [1] Avesta Vashishtha is a 3rd year student at Dr. Ram Manohar Lohiya National Law University, Lucknow. [2] Indian Oil Corpn Ltd v FEPL Engineering Ltd 2023 SCC OnLine Del 1617.

Dalima Pushkarna [1] Introduction The Singapore International Commercial Court (hereinafter “SICC”) in CZT v CZU , dated 28 June 2023, clarified that an Arbitral Tribunal’s discussions/deliberations were confidential in nature, and the principle of confidentiality allows for the disclosure of these documents solely under highly exceptional circumstances. The exception to this rule of confidentiality is that only in extremely exceptional circumstances can these documents be produced. This landmark decision highlights Singapore’s pro-arbitration approach by marking the inaugural instance in which a Singaporean Court has addressed ordering the disclosure of deliberation records. The judgement strongly upholds the principle of confidentiality concerning tribunal deliberations and establishes that any departure from this confidentiality should only occur if the “interests of justice” substantially outweigh the policy considerations supporting confidentiality. Such an exception would necessitate (a) the presence of very serious allegations that attack the integrity of arbitration at its core and (b) a reasonable prospect of these allegations achieving success. This decision of SICC also aligns with the view adopted by the National Courts of other jurisdictions like the USA, UK, and Australia, where an exception to confidentiality is allowed depending on the circumstances of the case and the nature of the allegations made. With the help of this article, the author tries to analyse the confidentiality regime present in India and how India can follow the approach taken by the arbitration hubs of the world and derive certain exceptions to the confidentiality clauses in India. International Legal Framework on the Issue While it can be said that statutes on arbitration are silent on the issue of limitations to the rule of confidentiality, the courts across various jurisdictions have highlighted and developed exceptions to the confidentiality rule through case law jurisprudence. These exceptions are of limited nature, depend on a case-to-case basis and are made when there are serious or grave allegations and not upholding the principle of confidentiality is in the interest of justice. In the case of Vantage Deepwater Co. v Petrobras Am., Inc. , the client, represented by Tai-Heng Cheng, was awarded US$622 million along with 15.2% compound interest. However, a dissenting arbitrator raised allegations of unfairness during the proceedings. Subsequently, the party that lost the arbitration attempted to challenge the majority award and requested access to discovery from the dissenting arbitrator and the American Arbitration Association (the entity that conducted the arbitration). The Fifth Circuit, after reviewing the case, upheld the Lower Court’s decision to dismiss the motions for discovery. The Court emphasised that before granting such discovery, it is crucial to assess the asserted need for previously undisclosed information and its potential impact on the arbitral process . Hence, USA Court focused that depending upon the need and the interest of justice, an exception to the confidentiality regime can be made. Similarly, in the English case of P v Q & Ors ., a party made an application to remove two arbitrators on the grounds of misconduct. In support of this application, the party sought access to communications exchanged between the arbitrators and the tribunal secretary. Similar to the approach taken by the SICC, the English Commercial Court determined that disclosure would only be ordered if the allegation of misconduct had a reasonable likelihood of success. Moreover, the court considered whether the requested documents were strictly necessary for the fair adjudication of the application and whether it was appropriate, considering all circumstances, to exercise its discretion and grant the disclosure order. Further, in the case of Ali Shipping Corp v Shipyard Trogir , the UK Court laid down exceptions to confidentiality and cases where disclosure can be made: 1. Where the party who originally produced the material expressly or impliedly consents; 2. Disclosure pursuant to an order of the court or with leave of court; 3. Disclosure to the extent reasonably necessary for the protection of a party’s legitimate interests, in particular in establishing or defending a claim against or from a third party; and 4. Disclosure where the interests of justice require it. Furthermore, Part III of the International Arbitration Act (IAA) also outlines the limitations and exceptions to the confidentiality regime in Australia . Section 23C of the IAA provides that parties to arbitral proceedings commenced in reliance on an arbitration agreement must not disclose confidential information unless: the disclosure falls within one of the circumstances outlined in Sec. 23D of the IAA, including that all parties to the proceedings consent to the disclosure; the disclosure is to a professional or other adviser to any of the parties; or if the disclosure is necessary for the purpose of enforcing an arbitral award, and the disclosure is no more than reasonable for that purpose (Sec. 23D); the arbitral tribunal makes an order allowing the disclosure in certain circumstances (Sec. 23E), and no court has made an order prohibiting a party from disclosing confidential information (Sec. 23F); or a court makes an order allowing disclosure in certain circumstances (sect. 23G). Hence, National Courts all over the world have provided some exceptions to the general rule of confidentiality. When the case involves serious allegations, “is in the interest of justice”, and when the case has real prospects of succeeding, then limitations on confidentiality may be imposed. Indian Legal Framework In 2017, a distinguished High-Level Committee chaired by Justice B. N. Srikrishna was established with the purpose of conducting a comprehensive review of the institutionalisation of arbitration mechanisms in India. The Committee’s significant mandate involved proposing various reforms and amendments to enhance the Arbitration and Conciliation Act, 1996. One crucial recommendation by the Committee pertained to the incorporation of the principle of ‘confidentiality’ in arbitration proceedings. Subsequently, in alignment with these recommendations, the Arbitration and Conciliation (Amendment) Act of 2019 was enacted. This amendment introduced Section 42A , which effectively extended the application of the principle of ‘confidentiality’ to encompass arbitration proceedings. Section 42A of the Act herein follows: “ Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution, and the parties to the arbitration agreement shall maintain the confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award .” It is important to note that this provision does not incorporate all the suggestions made by the B.N Srikrishna Committee. The Committee had suggested three exceptions to the issue of confidentiality, namely: Disclosure required by a legal duty; Disclosure to protect or enforce a legal right; To enforce or challenge an award before a court or judicial authority. The legislature, while making the amendments and incorporating the recommendations of the Committee, only included one exception to Section 42A that pertains to the disclosure of arbitral awards to facilitate their implementation. Therefore, it can be inferred without trouble that India’s stance on the exceptions and limitations to confidentiality does not align well with the practice of National Courts of other jurisdictions, according to which if the allegations are serious and there is a reasonable prospect of achieving success, then in those cases the exceptions to the confidentiality of the arbitration proceedings are applicable. Apart from deviating from the approach of other jurisdictions, the Indian provision also fails to consider certain instances where the disclosure of arbitration proceedings may be in the interest of the general public, especially in cases where the state is a party to the arbitration. Hence, in these cases, an exception must be made from the generally followed practice, and imposing restrictions on this via Section 42A might amount to violating the Right to Information of the general public. The High Court of Australia, in the case of Esso Australia Resource Ltd. v Plowman , dealt with an issue of violation of the Right to Information in an arbitration dispute where a state-owned entity was one of the parties. The Court recognized that the resolution of such a dispute has broader implications that affect the interests of the general public. Consequently, the Hon’ble High Court concluded that the public’s right to be informed about the affairs of public authorities was paramount in this context, and therefore, the public had a legitimate interest in knowing the intricacies and details of the arbitration proceedings. Conclusion Taking inspiration from its foreign counterparts, India should involve a comprehensive review and amendment of the current legal provisions to align with international practices and strike a balance between confidentiality and transparency. By incorporating exceptions to confidentiality like those recognized in other jurisdictions, India can ensure that in cases of serious allegations or when the public interest is involved, disclosure of arbitration proceedings can be permitted. This will enhance the transparency and accountability of the arbitral process, which is crucial for maintaining public trust in the legal system. However, providing exceptions to confidentiality in arbitration also comes with potential drawbacks. Care must be taken to define these exceptions precisely to prevent misuse or unwarranted disclosure of sensitive information. The interests of justice should be the guiding principle, and disclosure orders should be granted sparingly and only when necessary to protect legal rights or public interests. Additionally, ensuring that any disclosure is limited to the specific information needed and does not compromise the overall confidentiality of the arbitral process is essential. [1] B.A. LL.B. (Hons.) | Candidate of 2026 Dr. RML National Law University, Lucknow.

Aparna Tiwari [1] Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act, 1996") empowers courts to grant interim relief in arbitration matters, providing a crucial mechanism for parties to secure their interests during the arbitration process. The 2015 amendments to the Act, 1996 significantly curtailed judicial intervention, particularly after the constitution of an arbitral tribunal, while still allowing courts to intervene if the tribunal's remedy would be ineffective. This evolving nature of judicial scrutiny under Section 9 raises critical questions about the boundaries of court intervention and its implications for the efficiency and effectiveness of arbitration as a dispute resolution mechanism. Before the amendments, courts exercised extensive powers under Section 9, allowing for significant judicial intervention in arbitration matters. This included a more thorough examination of the merits of claims and the validity of arbitration agreements. The 2015 amendments introduced Section 9(3), limiting court intervention once an arbitral tribunal is constituted unless the tribunal's remedy is found to be ineffective. However, how the term ineffective has to be interpreted has not been defined. The recent judgments by the Supreme Court and High Courts in India mark a significant evolution in arbitration jurisprudence. By clarifying the scope of judicial intervention under Sections 9 and 11 of the Act, 1996, these decisions reinforce the importance of arbitration as a preferred mechanism for resolving commercial disputes. Its scope is progressively expanding, reinforcing the notion that courts possess wide discretionary powers to grant interim measures in aid of arbitration. Prior to the recent judgment, Indian courts adopted a relatively cautious approach to granting interim measures under Section 9. The prevailing view was that the court's powers were akin to those under Order 38 Rule 5 of the Code of Civil Procedure ("CPC"), which governs attachment before judgment. This restrictive interpretation often led to the denial of interim relief on technical grounds, hindering the effective conduct of arbitration proceedings. A NEW DAWN: THE SUPREME COURT’S EXPANSIVE INTERPRETATION The Supreme Court, in the case of Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited, articulated the essential criteria for granting interim relief under Section 9. The Court established that: Prima Facie Case : The applicant must demonstrate a good prima facie case for the relief sought. This standard requires the applicant to present sufficient evidence to support their claims, although it does not necessitate a conclusive determination of the merits. Balance of Convenience : The Court must assess whether the balance of convenience favours granting the interim relief. This involves evaluating the potential harm to the parties if the relief is granted or denied. Reasonable Expedition : The applicant should approach the Court with reasonable expedition, indicating that the request for interim measures is urgent and requires prompt attention. These criteria collectively underscore a shift towards a more pragmatic approach in granting interim relief, allowing for a broader interpretation of what constitutes sufficient grounds for intervention. Departure from Technicalities The Supreme Court has significantly expanded the contours of Section 9 of the Act, 1996, granting courts wider latitude in granting interim measures. The Court has decisively rejected the rigid application of procedural technicalities akin to those under Order 38 Rule 5 of the CPC. This liberal interpretation is rooted in the principle that procedural safeguards should not impede justice. By aligning with decisions from various High Courts, the Supreme Court has affirmed that the powers under Section 9 transcend those available under the CPC. Cases such as Saiyad Mohd. Bakar El-Edroos v. Abdulhabib Hasan Arab and Sardar Amarjit Singh Kalra v. Pramod Gupta underscore this judicial inclination to prioritise substantive justice over procedural formalities. Moreover, the Court has relaxed the evidentiary threshold for granting interim relief. A mere possibility of asset diminution, rather than an actual attempt to dissipate assets, is sufficient to warrant judicial intervention. This approach is in harmony with the overarching objective of the Act, 1996, to ensure the efficient and effective conduct of arbitral proceedings. The Supreme Court's decision marks a pivotal shift in the judicial approach to interim reliefs under Section 9. By dispensing with technical impediments and adopting a more flexible stance, the Court has empowered courts to play a proactive role in preserving the integrity of the arbitral process. Intervention by The Court Recent landmark judgments have explored the limitations imposed on courts at the pre-referral stage and their continued authority to grant interim relief during arbitration proceedings. Section 11(6) and the Limits of Pre-Referral Jurisdiction The Supreme Court's decision in NTPC Ltd. v. SPML Infra Ltd . circumscribed the scope of judicial intervention at the pre-referral stage. The Court has unequivocally stated that the role of a court is limited to determining the existence of a valid arbitration agreement and the arbitrability of the dispute. Any in-depth inquiry into the case's merits is premature at this stage and should be avoided. This ruling underscores the principle of party autonomy and the intent to expedite dispute resolution through arbitration. Section 9 and the Continuing Power of Courts In contrast, the Calcutta High Court's decision in   Jaya Industries v Mother Diary Calcutta and another has affirmed the ongoing power of courts to grant interim measures even after the commencement of arbitral proceedings. The Court has recognised the need for judicial oversight to safeguard the interests of parties involved in arbitration. This decision strikes a balance between the arbitral process's autonomy and the judiciary's protective role. Courts are now more active in safeguarding parties' rights through the liberal grant of interim relief. This shift and a streamlined pre-arbitration process have accelerated dispute resolution. These developments have positioned India as a more attractive destination for arbitration, fostering a business-friendly environment. However, this newfound efficiency must be balanced with caution. While the expanded powers of the courts are beneficial, there is a need for clear guidelines to prevent potential misuse. Striking the right balance between judicial intervention and arbitral autonomy is crucial to maintaining the integrity of the arbitration process. BALANCING JUDICIAL INTERVENTION AND ARBITRAL AUTONOMY IN INDIA The principle of  kompetenz-kompetenz , which allows arbitral tribunals to determine their own jurisdiction, is a cornerstone of arbitration law. In India, this principle is enshrined in Section 16 of the Act, 1996, empowering tribunals to rule on their jurisdiction, including objections regarding the validity of the arbitration agreement. However, the judiciary also plays a critical role in ensuring that arbitration proceedings are effective and not rendered futile. The Indian courts have navigated the delicate balance between respecting arbitral authority and exercising judicial oversight, particularly in the context of inefficacious arbitration proceedings. Understanding Inefficacious Arbitration Proceedings The term "inefficacious" in the context of arbitration refers to proceedings that are ineffective, unproductive, or incapable of achieving a resolution due to jurisdictional disputes or other procedural impediments. Courts have a responsibility to prevent such inefficacious proceedings, which can arise when parties challenge the validity of an arbitration agreement on grounds such as fraud, coercion, or lack of consent. In these scenarios, the courts must intervene to ensure that resources are not wasted on arbitration that may ultimately be deemed void. Judicial Intervention in Landmark Cases In  N.N. Global Mercantile Pvt. Ltd. v. M/S Indo Unique Flame Ltd. , the Supreme Court reaffirmed the  kompetenz-kompetenz  principle, emphasising that arbitral tribunals should be the first to address jurisdictional issues. This ruling reduces unnecessary court intervention and promotes efficiency in arbitration. However, the court also recognised its duty to prevent inefficacious proceedings. In  SBP & Co. v. Patel Engineering Ltd. , the Supreme Court held that courts could intervene when the arbitration agreement itself is in dispute. This ruling illustrates the judiciary's role in safeguarding the arbitration process from being initiated under flawed premises, thereby preventing inefficacious proceedings. The court's intervention in such cases ensures that parties do not expend time and resources on arbitration, which may not yield a valid resolution. The Role of Interim Relief under Section 9 The Supreme Court's ruling in  Jaya Industries v. Dalmia Cement (Bharat) Ltd.   further illustrates the balance between arbitral authority and judicial oversight. The court clarified that it could grant interim measures even when the arbitral tribunal has not yet been constituted, provided the applicant demonstrates a prima facie case, balance of convenience, and urgency. This ruling underscores that while the tribunal has the authority to rule on its jurisdiction, courts retain the power to intervene when necessary to prevent injustice or inefficacy in the arbitration process. The court's role is not to undermine the tribunal's authority but to complement it by ensuring that interim relief is available when parties face imminent harm. This approach fosters a cooperative relationship between the judiciary and arbitral tribunals, enhancing the overall effectiveness of the arbitration process. Defining Inefficacious Proceedings To further clarify what constitutes inefficacious proceedings, courts may consider several factors: Existence of a Valid Arbitration Agreement : Courts must assess whether the arbitration agreement is valid and enforceable. If the agreement is challenged on grounds such as fraud or coercion, the court's intervention is warranted to prevent initiating arbitration proceedings that may ultimately be deemed void. Potential for Resource Wastage : Courts should evaluate whether proceeding with arbitration would lead to the unnecessary expenditure of time and resources. Judicial intervention is justified if there is a significant likelihood that the arbitration will be rendered ineffective due to jurisdictional challenges. Urgency and Imminent Harm : In cases where parties face imminent harm, courts must act swiftly to provide interim relief, ensuring that the arbitration process does not exacerbate the situation. The reconciliation of  kompetenz-kompetenz  and judicial intervention in arbitration is a complex but essential aspect of the arbitration framework in India. The courts have demonstrated a commitment to respecting the authority of arbitral tribunals while also fulfilling their duty to prevent inefficacious proceedings. As the arbitration landscape in India continues to evolve, it is crucial to strike the right balance between judicial intervention and arbitral autonomy to maintain the integrity of the arbitration process. While the expanded powers of the courts are beneficial, clear guidelines are needed to prevent potential misuse. To prevent the misuse of judicial intervention, it is essential to establish clear guidelines that define the scope and limits of court involvement in the arbitration process. These guidelines should ensure that courts intervene only when necessary to protect the parties' rights or ensure the proceedings' fairness and efficiency. One key guideline should be that courts should not interfere with the arbitral tribunal's jurisdiction or decision-making powers unless there is a clear violation of the parties' rights or a serious procedural irregularity. Courts should also refrain from re-examining the merits of the dispute, as this undermines the finality and binding nature of arbitral awards. Some key recommendations could be as follows:- 1.  Limiting Judicial Intervention : - To expedite arbitration proceedings and respect the principle of party autonomy, judicial intervention should be restricted to a prima facie assessment of jurisdiction. This approach aligns with the competence-competence doctrine enshrined in Article 16 of the UNCITRAL Model Law , which grants arbitral tribunals the power to determine their jurisdiction. The English Arbitration Act of 1996 provides a similar framework by limiting court involvement to jurisdictional matters. 2. Clear Standards for Interim Relief : - Clear and objective standards must be established to prevent the misuse of interim relief and ensure its effective application. While arbitration rules like the International Chamber of Commerce (ICC)  and the London Court of International Arbitration (LCIA) offer general guidelines, more specific criteria are necessary. Courts can prevent delays by granting interim relief only in cases of demonstrable and irreparable harm and ensure that such measures are used judiciously. Courts should only grant interim measures when the arbitral tribunal cannot mitigate a demonstrable risk of harm. This principle is also reflected in the  Singapore International Arbitration Centre (SIAC) Rules , which require that any interim measures are proportionate and necessary. 3. Encouraging Comprehensive Disclosure and Case Presentation The Henderson doctrine , which prevents parties from raising claims that could have been previously asserted, is applicable in many common law jurisdictions. By mandating comprehensive disclosure, arbitrators can ensure that all relevant issues are addressed upfront, minimising the risk of subsequent claims that could disrupt the arbitration process. This approach aligns with the American Arbitration Association (AAA) rules , which emphasise the importance of presenting a complete case early in the proceedings. 4. Establishing Mechanisms to Prevent Abuse of Process The English Arbitration Act 1996 empowers courts to dismiss claims that are deemed to be an abuse of process. Similarly, the ICC Rules provide that the tribunal may dismiss claims that are manifestly inadmissible or abusive. Implementing mechanisms to prevent abuse of process can protect the integrity of arbitration. Courts should be vigilant in identifying and dismissing applications that lack merit or are intended to harass the opposing party. This proactive approach is crucial for maintaining the efficiency of arbitration as a dispute resolution mechanism. 5. Promoting Institutional Arbitration Institutional arbitration rules, such as those from the Hong Kong International Arbitration Centre (HKIAC) and Singapore International Arbitration Centre (SIAC), offer structured frameworks that guide the arbitration process. These rules often include provisions for the appointment of arbitrators, conduct of proceedings, and enforcement of awards. Promoting institutional arbitration can significantly reduce the need for judicial intervention. Institutional frameworks provide clear guidelines that help parties navigate the arbitration process effectively. For example, the Dubai International Arbitration Centre (DIAC) Rules explicitly outline the procedures for interim measures and the conduct of arbitrators, thereby minimising ambiguities that could lead to court involvement. 6. Training and Awareness for Judges and Arbitrators Many jurisdictions require ongoing training for judges and arbitrators to enhance their understanding of arbitration law and practice. For instance, the International Bar Association (IBA) provides resources and training programs on arbitration. Ensuring that judges and arbitrators are well-trained in arbitration principles reduces the likelihood of unnecessary court intervention. This training fosters a deeper understanding of arbitration and the importance of respecting arbitral autonomy. A delicate balance between judicial oversight and arbitral autonomy is crucial to optimise India's arbitration landscape. Clear guidelines, limiting judicial interference, establishing clear standards for interim relief, and promoting institutional arbitration are essential. This will enhance efficiency, predictability, and international appeal for India's arbitration regime. CONCLUSION The evolution of Section 9 of the Act, 1996 reflects India's journey towards establishing a robust and efficient arbitration regime. The judiciary's expansive interpretation of the section, coupled with the emphasis on judicial oversight, has significantly enhanced the efficacy of arbitration as a dispute resolution mechanism. By striking a balance between arbitral autonomy and judicial intervention, Indian courts have created a framework that promotes efficiency and fairness. However, the challenge lies in maintaining this delicate equilibrium. Clear guidelines and standardised procedures are essential to prevent the misuse of judicial intervention. By establishing clear standards for interim relief, encouraging comprehensive disclosure, and promoting institutional arbitration, India can solidify its position as a preferred arbitration hub. Ultimately, the success of arbitration depends on a collaborative approach involving the judiciary, arbitral institutions, and the legal community. By working together to refine the arbitration process, India can create a legal landscape that fosters trust, efficiency, and international recognition. The road ahead requires continuous refinement and adaptation. As the legal landscape evolves, the judiciary, legislature, and arbitration practitioners must remain vigilant in their pursuit of an arbitration regime that is both efficient and just. By embracing these principles, India can position itself as a global leader in arbitration, attracting domestic and international businesses to resolve their disputes through this effective and expeditious mechanism. [1] Aparna Tiwari is a 4th year student at Dr. Ram Manohar Lohiya National Law University, Lucknow.

- Khyati Maurya [1] & Saransh Sood [2]   Introduction The new Arbitration Rules of the International Centre for Settlement of Investment Disputes (ICSID) that came into force in July 2022, is a comprehensive revision of the 2006 Arbitration Rules brought with a view to bringing efficiency and cost-effectiveness in the investor-state resolution process. Major changes like mandating disclosure of third-party funding, providing different timelines to the tribunal to give its decision at various stages and expressly providing the power to grant security for costs align with broader concern for increasing transparency and efficiency in the system of investor-state dispute resolution. But particularly it is the purported omission of the provision allowing the investment tribunals to draw adverse inferences in the 2022 rules which raises questions. Adverse inference refers to an indirect conclusion drawn by a tribunal as a sanction against a party that refuses to provide direct evidence. Essentially, it assumes that the withheld evidence would have been unfavourable to the party's case. For example, in Feldman v. Mexico , the claimant accused Mexico of discriminatory tax treatment against foreign taxpayers. The tribunal ordered Mexico to produce evidence against discrimination between foreign and domestic taxpayers. However, Mexico failed to provide this evidence citing confidentiality concerns. As a result, the tribunal inferred that the withheld evidence likely demonstrated unfair treatment of domestic taxpayers, which would have supported the claimant’s allegations. Adverse Inferences are essential in international arbitration to ensure fairness and effectiveness by compensating for the tribunal's lack of coercive power, to compel evidence from sovereign states. For instance, unlike courts, tribunals cannot enforce contempt charges or impose penalties for failing to comply with orders for document production. Adverse inferences help address this limitation by drawing conclusions unfavourable to the non-complying party. 2022 Arbitration Rules & the Ensuing Conundrum In the erstwhile 2006 rules, Rule 34(3) allowed the parties to request the tribunal to ‘take a formal note of the parties refusal’ to produce evidence as ordered by the tribunal. However, these words, i.e. ‘take formal note of the parties refusal’ contained in Rule 34(3) of the 2006 Rules have been omitted from the Rule 2022 Rules without any explicit explanation as to its deletion in the working papers. The only reference to adverse inferences is found in the comments given by China and Armenia . While it was proposed by China that the power to take adverse inferences should be formally omitted, Armenia argued in favour of the formal inclusion of this power. However, no discussion was recorded on these proposals. It becomes even more intriguing to see a similar omission from Note 13 on Document Production of UNCITRAL Notes on Arbitral Proceedings wherein an explicit reference to the power to draw adverse inference has been deleted in 2016 notes that was earlier contained in the erstwhile 1996 notes. Although, there has long been a debate surrounding the potential risk of ‘false positives’ associated with reliance on such a mechanism, the recent revision prompts the question of whether the Tribunals still have the power to draw adverse inferences under Arbitration Rules 2022. To begin with, the general principle regarding use of inferences in international dispute resolution has been explained by ICJ in the Corfu Channel Case . In the said case, the ICJ was to decide upon the liability of Albania in laying the underwater mines. However, there was no direct evidence establishing that the mines were laid by Albania. Despite this, while holding Albania liable for the loss caused due to the mines, based on inferences, the court reasoned that when a state exercises exclusive control, the victim of an international law breach often lacks access to direct evidence to establish state responsibility. Therefore, the reliance of the victim on inferences and circumstantial evidence should be construed liberally, and the tribunal should be allowed to draw inferences when the party to the dispute fails to provide the required direct evidence (Page 18). This practice is now accepted across legal systems and is acknowledged by international courts and tribunals. For example, in the case of William J Levitt v. Islamic Republic of Iran , the Iran-US Claims Tribunal noted that it is free to draw inferences from the parties' non-compliance with its order to produce documents (¶ 61). However, since the ICSID Arbitration Rules 2022 omits the reference to the power of an arbitral tribunal to take formal note of the failure to produce documents, which was earlier expressly contained in Rule 34(3) of the ICSID Arbitration Rules 2006, the question as to whether or not the ICSID tribunals continue to possess this power becomes relevant. Although, in most instances, the tribunals have assumed the power to draw adverse inferences without any justification, it has sometimes referred to power in Rule 34(3) as the source of the power to draw adverse inferences. Illustratively, in the case of Rompetrol v. Romania , the tribunal ruled that the power to take formal note under Rule 34(3) is the source of the tribunal’s discretionary power to draw adverse inferences. In RSM v. Saint Lucia , the tribunal ruled that the “ Rule 34(3) reflects the common principle that a fact-finder can draw inferences from a failure to produce evidence” (¶ 56). Similarly, in the case of Feldman v. Mexico , the arbitral tribunal ruled that it is empowered to draw appropriate inferences from any party's failure to comply with the document production order (¶ 8). At this juncture, it is important to look at the source of the words ‘take formal note of the refusal’ as contained in the ICSID Arbitration Rules 2006 . A similar use of these words can be seen in the Statute of the International Court of Justice (ICJ), which, under Article 49 deals with the Evidence taking the power of the ICJ. It also uses the words ‘Formal note shall be taken of any refusal’ (to comply with the evidence production order), and commentators have interpreted this as the source of the power of ICJ to attach such consequences as it deems necessary for the non-compliance with the document production order.  In such a scenario, it can be argued that the omission of the power to take formal note of the refusal to comply with the document production order, is tantamount to the omission of the power to attach negative consequences to non-compliance with the document production order, thereby excluding the power of arbitral tribunal to draw adverse inferences from the non-production of documents.  A similar case against adverse inferences is also reflected in the UNCITRAL Notes on Arbitral Proceedings, wherein the explicit reference to the power to draw an adverse inference in its Note 13 on Document Production contained in the erstwhile 1996 notes has been deleted in the 2016 notes.  To the contrary, it can be argued that a tribunal possesses an inherent authority to draw adverse inferences from the non-production of the documents that is embedded in its power to determine the admissibility, relevance, and weight of the evidence presented. This view is also supported by Nathen D. O’ Malley, in his treatise “ Rules of Evidence in International  Arbitration .” Accordingly, it can be concluded that the power to draw adverse inferences remains intact despite the change in arbitration rules (¶ 7.37). A similar approach was also followed by the tribunal in the case of Sevilla Basheer B.V. v. The Kingdom of Spain , where the tribunal, while relying on the power to admit and weigh evidence, contained in Rule 34(1) of the 2006 Rules, concluded that it did possess the power to draw adverse inferences from the non-compliance with the document production order (¶ 550).  Under the 2022 Arbitration Rules, the tribunal continues to possess the power to admit and assign weight to the evidence under Rule 36 . Here, the tribunal is empowered to admit direct and indirect evidence as the provision does not specifically omit the indirect evidence. It is important to note that this distinction, between the direct and indirect evidence, pertains to the weight of the evidence rather than its admissibility , thus, both the direct and the indirect evidence can be admitted. Since, adverse inferences, are, by their very nature, indirect evidence only, they should be admissible under Rule 36(1) of the ICSID Arbitration Rules 2022, and the only question for the tribunal to decide is regarding the weight to be attached to it. Further, it is well-established that tribunals possess the authority to resolve procedural matters . Article 44 of the ICSID Convention grants tribunals the power to address any procedural issues not expressly covered by the ICSID Convention, Rules, or Regulations. This principle was reaffirmed in the case of Libananco Holdings Co. v. Republic of Turkey , wherein it was reiterated that the tribunal ‘must be regarded as endowed with the inherent powers required to preserve the integrity of its process – even if the remedies open to it are necessarily different from those that might be available to a domestic court of law.’ Additionally, this position is in consonance with the procedural laws of most legal regimes where courts can assess the value of any evidence. Even in international arbitration, arbitration clauses rarely address the issue of weighing evidence directly.  It can hence be argued that the inherent and unquestionable authority to draw adverse inferences unless otherwise agreed by the parties, stems from the arbitrator’s wide discretion in admitting and evaluating the relevance of evidence, as well as their power to establish and manage arbitration procedures. Further it cannot be argued that the power to draw adverse inferences results in a shifting of the burden of proof ( onus probandi ) since the request to draw adverse inference is often made by the opposing party, thereby violating the general principle in international arbitration of actori incumbit probatio . If an opposing party fails to provide evidence that challenges claimant’s case, then it will be a matter of procedural non-compliance and will not affect the burden of proof.   As Jeremy K. Sharpe explains, referencing the arbitral award in Feldman v. Mexico , once the party bearing the ultimate burden of proof establishes a prima facie case, the burden of production ( onus proponendi ) shifts to the responding party to counter that evidence. In other words, if the party with the burden of proof presents evidence sufficient to create a presumption of truth, the burden shifts to the opposing party, which must then produce adequate evidence to rebut the presumption. This approach, adopted in other cases as well, as Sharpe rightly notes, does not shift the burden of proof itself but rather the burden of production or evidentiary burden. Moreover, it is essential to recognise that the authority to draw adverse inferences has historically been a discretionary prerogative rather than a default sanction. Even IBA Rules present adverse inference as a possible sanction and subject this power to certain requirements that must be met under Article 3.3 and Article 4.10. Due to the discretionary nature of this power, it is drenched in subjectivity but applying such clear conditions and criteria can introduce greater objectivity. For example the standard of reasonableness, consistency with the facts in the record, logical nexus of inference and the missing evidence, which has been inspired by the scholarship of Jeremy Sharpe and Bin Cheng [3] and presently contained in IBA rules as well laid down by various tribunals like in Frederica Lincoln Riahi v. Government of the Islamic Republic of Iran . Arbitrators should explicitly show in their award that these criteria were followed and provide reasons for assigning or withholding weight to the adverse inference. They must also ensure that the defence rights are upheld throughout the process. Moreover, adverse inference as a form of indirect evidence in itself carries very limited evidentiary value. The Arbitral jurisprudence has developed several cautions before an adverse inference is taken. Therefore, in the opinion of the author, instead of omitting the said power itself, which has continued to be a tool balancing the subjective role of the tribunal in weighing evidence and the need for objective fairness in the process, the focus must be on better institutionalizing these safeguards. Conclusion   In the light of the foregoing discussion, it can be concluded that the omission of the power to take ‘formal note’ of the parties' refusal to comply with the document production order does not conclusively take away the power of arbitral tribunals to draw adverse inferences in case of non-compliance with the document production order. Since no arbitral award based on the 2022 rules has discussed the power of arbitral tribunals to draw adverse inferences, it remains to be seen how the tribunals interpret this omission. However, in the opinion of the authors, the tribunals must rule in favour of power to draw adverse inferences because it is the most potent arrow in the quiver of the arbitral tribunal to enforce its document production orders, especially when it lacks the other sanctions available with the domestic courts to compel the production of evidence. This power with ICSID tribunals becomes even more important because investor-state disputes always involve a much more powerful sovereign state that possesses various key evidence for the fair adjudication of the disputes, and it is seldom possible to marshall the evidence against the sovereign.  [1] Khyati is a Third-Year BA.LLB. Student at Gujarat National Law University, Gandhinagar and can be reached at khyati22bal037@gnlu.ac.in [2] Saransh is a Third-Year BA.LLB. Student at Gujarat National Law University, Gandhinagar and can be reached at saransh22bal069@gnlu.ac.in [3] Bin Chen, General Principles of Law as applied by International Courts and Tribunals p. 333-335 (Cambridge University Press 2006).

Ishant S. Joshi and Vatsala Tyagi* Introduction The inclusion of Appellate Arbitral Tribunals (hereinafter: “ AAT ”) under Section 34A of the Draft Arbitration and Conciliation Amendment Bill, 2024 (hereinafter: “ Draft Bill ”) marks a transformative step in India’s arbitration regime. By allowing arbitral institutions to establish AATs to entertain applications for setting aside arbitral awards under Section 34 of the Arbitration and Conciliation Act , 1996 (hereinafter: “ Act ”), the draft bill introduces a two-tiered arbitration mechanism. While this possible insertion has the potential to enhance arbitration practices and reduce judicial intervention, it also brings significant challenges and ambiguities that require careful examination before the draft bill is brought before the parliament. The AAT, as envisioned in the draft bill, will derive its authority from the parties' consent. If parties opt for this mechanism, they effectively transfer the power of setting aside awards from the courts to the AAT. Furthermore, the provision retains the right to appeal under Section 37 of the Act. Codifying Two-Tier Arbitration Section 34A of the draft bill (hereinafter: “ Section 34A ”) has in essence, codified the judgment in M/S Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd . . The Supreme Court, in this case, upheld the validity of two-tier arbitration clauses, affirming the parties’ right to an appellate mechanism. By codifying this right through Section 34A, the draft bill can eliminate ambiguity regarding two-tier arbitration. By offering an appellate platform, the draft bill enhances India’s attractiveness as an arbitration-friendly jurisdiction, particularly for international commercial disputes. Impartiality and Composition of AAT A question may arise as to what is going to be the composition of the AAT? Some might be sceptical of the AAT because the same institution will decide on the award when it goes to appeal. For example, when an award is decided by DIAC, then if the parties opt for Section 34A, that same institution will decide on the validity of the award. These concerns can be mitigated by introducing a clause outlining the AAT's composition, which shall include both domain experts (e.g., specialists in fields like cement or medicine, depending on the case) and legal professionals like retired judges and lawyers. This dual composition ensures balanced decision-making, addressing both legal and technical conflicts effectively. In lieu of this, there are two approaches for the constitution of the appellate tribunal: (i) either the parties participate in choosing the arbitrators for the AAT, or (ii) the arbitral institutions alone are given this power. The latter ensures impartiality and independence, as the tribunal is constituted purely for review purposes. Although this may raise eyebrows in a party-oriented arbitration process, it aligns with the need for objectivity in appellate adjudication. Further, this approach will also preserve the institutions independence, reducing scope for conflict of interests. Moreover, Section 34(1B) of the draft bill further supports this approach by mandating the AAT to formulate specific grounds for appeals based on the award passed by the original tribunal, enabling skilled and focused adjudication. This seemingly limits party autonomy in so far as their right to challenge awards on other grounds. However, it is essential to sustain the valued traits of finality and time efficiency of arbitration. Addressing Limitation Periods Another challenge is posed by absence of a clear limitation period for invoking the AAT. The absence of a defined timeline for invoking the AAT could lead to procedural abuse and unnecessary delays. This shall undermine the paramount objective of streamlining the appellate process. The draft bill must also clarify the interplay of this limitation period with the enforcement of the original award. Inspiration can be drawn from international models such as the JAMS Optional Arbitration Appeal Procedure (hereinafter: “ JAMS ”)  and the AAA Optional Appellate Rules (hereinafter: “ AAA ”), which suspend enforcement of the initial award until the appellate process is concluded. The limitation period for the initiating enforcement shall only commence after the appellate award. The Bill must delineate such intricacies to prevent procedural inefficiencies. Applicability to Ad-Hoc Arbitrations Section 34A is not applicable to ad hoc arbitrations but only to institutional arbitrations. This exclusion risks fragmenting the arbitration landscape and undermining the uniformity of arbitration jurisprudence. Section 34A should be made applicable to ad hoc arbitrations, provided that parties adopt agreed-upon institutional rules or engage an arbitral institution, ensuring consistency with institutional arbitration practices. It could be mandated that parties engaging in ad hoc arbitration utilize the same arbitral institution or adopt identical arbitral rules if they wish to include an AAT clause under Section 34A. Extending Section 34A to ad hoc arbitrations, with appropriate safeguards, would ensure that all parties, irrespective of the arbitration’s nature, can benefit from the AAT framework. In light of this, it appears unnecessary for the AAT to be inapplicable to ad hoc arbitration proceedings. There appears no practical reason for this exclusion. Cross-Appeals: An Overlooked Necessity A critical oversight in the draft bill is its failure to address the need for a cross-appeal mechanism. A cross-appeal occurs when one party triggers the appellate arbitration clause (AAT), but the opposing party believes that the appeal is unlikely to yield meaningful results or that the issue at hand is too trivial compared to the cost and time involved in constituting an AAT and undergoing the appellate process, which is typically expensive. In such cases, as the draft bill currently stands, the opposing party would have no recourse but to be drawn into a lengthy and costly appellate process, with limited impact. To ensure fairness, the Draft Bill could incorporate a cross-appeal provision, allowing the opposing party a fixed period from the date an appeal is filed under Section 34A to submit a cross-appeal, thereby mitigating the risks of unnecessary escalation and ensuring a more balanced appellate process. Inspiration can be drawn from procedures such as the JAMS and AAA appeal procedures, both of which provide a seven-day window for filing a cross-appeal after an application for appeal is submitted to the appellate tribunal. Interaction with Time Limits for Awards The interaction between Section 34A and Section 29A of the Act, which governs time limits for arbitral awards, also warrants reconsideration. Under the current provision, in cases of domestic arbitration, the tribunal is required to deliver its award within 12 months from the date of completion of pleadings, with the possibility of an extension if both parties consent. Further extensions may be granted by the court. However, the inclusion of a two-tier arbitration process necessitates a revaluation of these timelines. A significant legal gap exists here as there is a lack of clarity on how the timelines for the arbitral award and the appellate process will interact. An appellate arbitration system is an additional procedural layer to the existing regime, which must be provided its exclusive time outlines. Drawing from international practices, the Draft Bill might better outline how the timelines should be adjusted in the context of a two-tier system. Without such provisions, the Draft Bill risks introducing more uncertainty and procedural delays, contrary to its intent of streamlining arbitration. The draft bill must account for the extended procedural framework that a two-tier arbitration system entails, ensuring that the prescribed time limits are both realistic and conducive to an efficient resolution of disputes. Enforcement Challenges Another significant issue pertains to the validity of enforcing the initial award while it is under challenge before the AAT. Leaving the matter of enforcement to the discretion of the AAT would unnecessarily prolong the arbitration process. Therefore, the statute must explicitly clarify the status of the initial award—rendered by the arbitral tribunal in the first instance—when a second-tier arbitration clause under Section 34A is invoked. Guidance can be drawn from international arbitral frameworks, such as JAMS and AAA appeal procedures both of which stipulate that the initial award cannot be enforced while an appeal is pending. This principle could be further expanded to include a provision stating that the initial award cannot be enforced until the expiration of the limitation period for filing an appeal before the AAT, a limitation period that should also be clearly defined in the bill. Financial Implications and Accessibility The financial implications of AAT proceedings also merit attention as the Draft Bill misses a crucial legal gap—how cost regulation mechanisms should be integrated into the Draft Bill. The resource intensive nature of such proceedings limits its accessibility for smaller parties or less complex disputes. Without such regulation, the Draft Bill risks skewing arbitration in favour of well-resourced parties, undermining the principle of equal access to justice. The current version does not offer any substantial protections for smaller or less-resourced parties in terms of capping the fees associated with the AAT process. Legal systems like the ICC have addressed this issue by capping costs for arbitration proceedings, ensuring broader accessibility and the Draft Bill can incorporate a legal framework similar to it to mitigate financial barriers.   Ensuring Exclusivity of the Appellate Arbitral Tribunal AATs can significantly ease the burden on the courts. However, the draft bill must explicitly state that under Section 34A, appeals must be made to the AAT rather than the court. The Draft Bill should include provisions that ensure exclusivity of the AAT as the first point of appeal, with judicial intervention allowed only in exceptional circumstances. Drawing from international arbitration practices where appeals are exclusively handled by specialized appellate bodies (e.g., ICC), the Draft Bill could propose incorporating a similar exclusivity clause to prevent redundant judicial oversight and ensure the AAT's intended role. Providing parties with an option to choose authority of appeal would be redundant and will make Section 34A superfluous. Impact of the Appellate Arbitral Tribunal on Grading of Arbitral Institutions Another concern is how the AAT interacts with the grading of arbitral institutions. The Arbitration Council of India (ACI) is tasked with grading arbitral institutions according to quality and overall performance. Additionally, arbitrators will need to familiarize themselves with this new statutory right available to parties. The impact of AAT on the grading process and overall quality of arbitration is yet to be observed. Moreover, the grading criteria must devise consistent and specific standards for appellate proceedings requiring arbitral institutions to meet specific standards for appellate processes, which would impact their grading. This will ensure India to become an arbitration friendly place for International Commercial Arbitration. . Ensuring Consistency in Interpretations Another critical shortcoming is the scope for varied  interpretations of Section 34(2) of the Act by different arbitral institutions. For instance, ground for public policy under Section 34 of the Act, could be construed differently by AATs of different arbitral institutions. Hence, it is essential to ensure that various AATs do not end up creating their own interpretations of established law.  This divergence affects the predictability of arbitration outcomes as parties may not know what to expect when their dispute reaches an AAT. The said dilemma can be addressed by including clear guidelines on the standardization of grounds for setting aside awards across different arbitral institutions. The said grounds can be developed by following legal precedents, such as M/S Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd. , to suggest how a uniform approach could be implemented. Without such clarity, the Draft Bill risks creating a fragmented arbitration system, where parties face uncertainty about how different AATs may apply the law. Conclusion In conclusion, the AAT as envisioned under Section 34A of the draft bill is an innovative step in India’s arbitration journey. By addressing the challenges of judicial overreach and promoting institutional arbitration, the draft bill paves way to position India as a global arbitration hub. The draft bill can reduce the burden on courts and prevent judicializing of arbitration. However, its success hinges on resolving key ambiguities, such as limitation periods, enforcement mechanisms, and interpretative consistency. By incorporating clear guidelines and stakeholder feedback, the draft bill can create a robust and efficient appellate mechanism. *The authors Ishant S. Joshi and Vatsala Tyagi are 4th year and 3rd year B.B.A L .L.B (Hons.) students at National Law University, Odisha.

Tushar Verma and Ayush Bajpai [1]   INTRODUCTION The core objective of commercial dispute resolution is to resolve business conflicts efficiently and fairly. However, the first line of defense against such disputes is a well-drafted contract i.e. clear, precise, and comprehensive. The fundamental principle in contract drafting is that no provision should be assumed, implied, or left to interpretation without explicit articulation. Disputes often arise when parties interpret the same clause in different ways, leading to conflicts that require formal resolution. This article critically examines the evolving application of the doctrine of implied terms within the framework of Indian commercial arbitration. Further, it analyses recent judicial developments and proposes a balanced approach that upholds the sanctity of contractual interpretation while preserving the autonomy of arbitral proceedings. Henceforth, it becomes essential to consider certain principles that form the basis of the interpretation of a commercial contract. This article seeks to examine the following key issues (a) the extent to which arbitral tribunals may imply terms into commercial contracts, (b) the legal standards governing such implication, and (c) whether judicial oversight is warranted where tribunals apply these standards incorrectly or arbitrarily. The answer to the above inquiry is rooted in a fundamental principle: courts and tribunals may only imply a term in a contract when the express terms are absent, ambiguous, or fail to align with commercial business sense. In such circumstances, tribunals and courts often invoke principles such as the Business Efficacy Test and the Officious Bystander Test to interpret contractual terms and imply provisions necessary to give effect to the intended commercial transaction between the parties. However, any interpretation by the courts or tribunals must remain consistent with the express terms of the contract, ensuring that no distortion or unintended modification occurs. Principle Surrounding Contractual Interpretation: A. Business Efficacy Doctrine: The Contracting Parties often mistakenly assume that the express terms of a contract will always prevail. However, even a well-drafted commercial contract may contain gaps or inconsistencies. Despite Even in the presence of such omissions, the courts and Tribunals proactively strive to achieve a business common sense that gives effect to the intended transaction envisioned at the outset of the contract. In such cases, courts and tribunals often endeavour to ensure that the contract operates effectively and aligns with the parties' commercial intent i.e. the principle for Business Efficacy. This principle allows the interpretation of unstated contractual terms that reasonable businesspersons would have intended to include from the outset, and the objective is to ensure that the contract functions effectively, without placing an undue burden on either party in unforeseen circumstances. Under this doctrine, the question is not what the actual parties subjectively intended but what a reasonable person in their position would have agreed upon at the time of contracting. A key precedent is The Moorcock (1889) 14 PD 64 , where Bowen L.J. held that courts may imply terms necessary for the effective execution of the contract . Further, recently Hon’ble Apex Court, in Nabha Power v. Punjab State Power Corporation & Satya Jain v. Anis Ahmed Rushdie , reaffirmed this principle , emphasizing “that commercial contracts should be interpreted in line with the presumed intent of rational businesspersons” . For e.g., a retailer contracts with a supplier to purchase perishable goods but the contract doesn’t specify refrigerated transport. The supplier delivers in a regular truck, causing spoilage and financial loss. The retailer argues for an implied term that goods must be transported properly. Applying business efficacy, a court may imply this term, as both parties must have intended the goods to arrive in a saleable condition. To uphold the presumed intention of the parties while ensuring that courts and tribunals do not imply terms in a manner that undermines the transaction's intended efficacy which the parties would have intended at all events, the Apex Court in Nabha Power (Supra) established a structured approach for implying contractual terms, known as the Five-Prong (Penta) Test . This test, later followed in Investors Compensation Scheme Ltd. v. West Bromwich Building Society and Attorney General of Belize v. Belize Telecom Ltd. , requires that an implied term: (1) be reasonable and equitable, (2) be necessary for business efficacy, (3) be one both parties would have agreed to (Officious Bystander Test), (4) be capable of clear expression, and (5) not contradict any express contract provision. B. The Officious Bystander Test Drafting a commercial contract is a complex and technical task that demands the expertise of skilled legal professionals from both sides. Given the intricacies involved, it is often impractical to explicitly include every possible term within the contract. However, certain terms are so inherently understood in the context of business transactions that courts and tribunals have the authority to imply them when necessary. These implied terms reflect what any reasonable third party would naturally assume to be part of the agreement, thereby ensuring fairness and practicality in the interpretation of the contract. Hence, another widely applied test in contractual interpretation is the Officious Bystander Test , first articulated in Shirlaw v Southern Foundries wherein LJ Mackinnon quoted “ If, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress him with a common ‘Oh, of course.”. Henceforth, the same was reinforced in Nabha Power (Supra) . The essence of this test is that if an uninvolved but knowledgeable third party were to suggest an omitted contractual term during negotiations, both parties would instinctively respond, "Oh, of course!" However, the principles governing the implication of terms in a contract must be carefully balanced against the principle of party autonomy. In some instances, such implied terms may conflict with the express provisions of the contract—particularly in cross-border arbitration. Cases such as Terre Neuve Sarl v Yewdale and Etihad Airways PJSC v Flother illustrate the complexities involved in determining commercial expectations and assessing business efficacy in international commercial agreements. For instance, consider a scenario where a chef leases a commercial kitchen from a landlord, but the contract does not explicitly mention a functioning ventilation system. After taking possession, the chef discovers that the ventilation is defective, rendering the space unsafe for cooking. The landlord refuses to make repairs, arguing that the contract contains no such obligation. In interpreting the agreement, a court would assess Firstly, whether the need for a ventilation system was foreseeable to both parties at the time of contracting. Secondly, whether the ventilation was so essential and obvious that its inclusion could be presumed i.e. officious bystander test (if, during negotiations, an outsider had asked, “Shouldn’t the kitchen have proper ventilation?”, both parties would likely have replied, “Of course!”), Lastly , the court would evaluate whether the absence of such a system defeats the commercial purpose of the contract—invoking the business efficacy test. If all these questions are answered in the affirmative, the court would likely imply the term and rule in favour of the chef. Furthermore, the Courts have applied this reasoning in cases such as Enercon (India) Ltd. v. Enercon GMBH wherein the tribunal implied terms to clarify the supply agreement’s functional intent, with the court subsequently upholding this interpretation under the narrow scope of judicial review to reinforce business efficacy and address contractual omissions.In the majority of cases, the two above-discussed principles operate in tandem, as the primary objective of implying a term is to reflect the true intent of the parties at the time of contracting and to uphold the efficiency & purpose of business transaction. Contractual Interpretation in Arbitration: Balancing Intent and Judicial Restraint: In arbitration proceedings, party autonomy is paramount. However, the question of whether arbitral tribunals can or should imply terms into a contract raises complex legal and doctrinal challenges. As discussed above, the interplay between the business efficacy principle and the officious bystander test plays a crucial role in interpreting commercial agreements. These principles help tribunals resolve ambiguities by identifying terms that reflect the parties’ shared intentions, thereby preserving commercial purpose without compromising the parties’ autonomy. In this context, the judiciary has consistently emphasized that arbitral tribunals must adhere to the contractual framework when resolving disputes. As in Associate Builders v. Delhi Development Authority it was held, that an arbitral tribunal must resolve disputes strictly within the terms of the contract. Failure to do so renders the award patently illegal. However, a tribunal’s reasonable interpretation of a contract cannot be overturned merely on the possibility of alternative view on facts and interpretation, and the courts can exercise their jurisdiction only to evaluate the tribunals reasoning on the ground of perversity and arbitrariness. Similarly, in Vestas Wind Technology India Pvt. Ltd. v. Inox Renewables Ltd. , the Bombay High Court upheld an arbitral award applying business efficacy principles to contractual interpretation. However, the doctrine of Error Within Jurisdiction limits judicial intervention in the Tribunal’s decisions. While the interpretation of contractual terms falls within the arbitrator’s domain, courts will not interfere unless the arbitrator exceeds their jurisdiction or interprets the contract in an unreasonable and arbitrary manner. This issue was examined by the Delhi High Court in Reliance Industries v. GAIL (India) Ltd. , where the court held that the principle of Business Efficacy Test cannot be applied by an appellate court u/s 37 of the Commercial Courts Act for interpretation of contractual terms. As the Hon’ble court emphasized that such proceedings have a very narrow scope and do not allow for reassessment of evidence or substitution of judicial opinion over the arbitral tribunal’s findings. Conclusion   This article establishes that whenever a dispute arises, courts and arbitral tribunals are empowered to interpret and, where necessary, imply terms to give effect to the true intent of the contract. Foundational principles such as the officious bystander test and the business efficacy doctrine serve as essential tools to ensure that such interpretations are both just and equitable. However, the exercise of this power demands careful judicial restraint and doctrinal precision to avoid encroaching upon party autonomy and the foundational principles of arbitration. Recent judicial trend, as seen in cases like Vestas Wind Technology India Pvt. Ltd. (Supra) , M/S Adani Power (Mundra) Ltd.  Vs.  Gujarat Electricity Regulatory Commission & Ors , & Nabha Power(Supra) highlights the judiciary’s increasing reliance on these doctrines to uphold commercial reasonableness. While the doctrine of “error within jurisdiction” limits judicial interference u/s 34 & 37 of the Act, courts can still set aside awards that are arbitrary or unreasonable. Further, as contracts are increasingly drafted using AI, interpretation becomes more complex. While AI reduces human error, it also obscures the human intent and reasonableness that traditionally guide contract formation. This makes the application of principles for interpretation more challenging. Additionally, varying arbitration frameworks such as those for cross border arbitration, MSMEs and PSUs require context-specific approaches, rather than a uniform standard. Thus, only a principled and restrained application of interpretative doctrines can ensure that arbitration remains an effective, party-centric method for resolving modern commercial disputes. [1] Tushar Verma and Ayush Bajpai are fourth-year B.A. LL.B. (Hons.) students at Dr. Ram Manohar Lohiya National Law University, Lucknow. They have a keen interest in commercial arbitration and contract law, actively engaging in research and writing on related topics. Their academic journey has involved contributing to legal research projects and participating in seminars and workshops focused on dispute resolution and contract interpretation.