- Gaurav Rai [1] & Gautam Mohanty [2] I. ABSTRACT This article examines the evolving boundaries of arbitral discretion in the interpretation of contracts under Indian arbitration law, with particular reference to Section 28(3) of the Arbitration and Conciliation Act, 1996. The article commences by tracing the jurisprudential shift from ONGC v. SAW Pipes Ltd., which entrenched judicial interference through a rigid textualist approach, to the 2015 amendment and the Supreme Court’s clarification in Ssangyong Engineering v. NHAI, which confined violations of Section 28(3) to the narrower ground of patent illegality. The analysis demonstrates that while arbitral tribunals lack authority to disregard or rewrite express contractual terms, they retain interpretive autonomy where ambiguity exists, provided their construction is commercially plausible. The article further interrogates the limited role of implied terms emphasising that such doctrines cannot be used to undermine express language of the contract. The article also discusses entire agreement clauses, which further limit the scope of interpretation to the written word of the contract and ignoring any pre-contractual discussion and negotiation. Through a descriptive process, the article attempts to delineate a nuanced framework for arbitral interpretation: tribunals must respect contractual text while exercising sufficient discretion to uphold the parties’ commercial bargain. The entire analysis is done on the basis of the recent judgments of the Hon'ble Supreme Court India and various High Courts to allow the readers to explore the relevant judgments necessary to resolve the specific issue concerned. The paper concludes that evolution of the arbitral jurisprudence towards contractual interpretation is a step towards stabilising the powers of Arbitral Tribunals relating to interpretation of contracts and in turn leading to greater trust in the Indian Arbitration ecosystem. II. Introduction 1. Interpretation of contracts in arbitration proceedings presents a curious paradox. While arbitral tribunals derive their authority from the contract itself, they are often called upon to “interpret” the very words that constitute their own source of power. 2. The tension becomes especially acute in India, while attempting to understand the powers of the Arbitral Tribunal to interpret the contract when seen from the lens of Section 28(3) of the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”). Prior to its amendment in 2015, the clause instructed tribunals to decide disputes “in accordance with the terms of the contract,”. 3. The power to interpret however also cannot be absolute and the Tribunal is not a strictly judicial body. Therefore, the article attempts to dissect and decode judgments of the Courts which discusses the limits of the power and the manner in which the power can be exercised, to provide a roadmap for making arbitrations effective and not a process similar to litigations whose efficiency is marred by delays and multiple appellate procedures. 4. The purpose of this article, therefore, is to create a framework for arbitrators and practitioners on the contours of the powers of arbitral tribunals to interpret the contract and what tools can be used to do the same. III. Section 28(3) of the Arbitration Act: Evolution of a Constraint 5. Section 28(3) of the Arbitration Act (as it stood prior to its amendment in 2015) mandated that “[i]n all cases, the Arbitral Tribunal shall decide in accordance with the terms of the contract...” At first glance, the provision appears uncontroversial especially considering that the Arbitral Tribunals are creatures of the contract. However, a rigid application of the above provision would create a situation where pathological clauses in the contract which fall foul of the Indian Contract Act, 1872 (Contract Act) or any other statute which governs the private relationship between parties are interpreted in a manner which is unreasonable. 6. In ONGC v. SAW Pipes,[3] the Hon’ble Supreme Court set aside an arbitration award because the award disregarded certain aspects of the contract and went slightly astray from the exact terms. The Court emphasized that an arbitrator cannot “ignore the terms of the contract and award an amount despite the contract to the contrary”. In effect, SAW Pipes introduced a curial “second-look” doctrine, under which adherence to contractual text became a threshold requirement not just for correctness but for enforceability. 7. The implications of the above were significant as not only was arbitral discretion curtailed, but even a commercially reasonable interpretation could be struck down if it deviated from textual fidelity. Consequently, an era of literal interpretation emerged, where post-award scrutiny limited the use of other modes of interpretation of contracts where business and commercial factors and purposive interpretation based on an assessment of the intention of parties by the Tribunal became impermissible. 8. This judicial trend drew sustained critique, culminating in the 246th Report of the Law Commission of India, (“246th Report”) which identified SAW Pipes as a source of excessive judicial interference and erosion of arbitral finality. The Commission observed that the expression “in accordance with the terms of the contract” must be simmered down to “taking into account the terms of the contract” and must be further balanced with “consideration of trade usages applicable to the transaction”. Notably, the 246th Report proposed a more calibrated approach which would preserve party autonomy and commercial sensibility without reducing arbitral decision making to mechanical activity of strict textual application. The relevant extract of the 246th Report which specifically outlined the reason for the amendment is extracted hereunder: Amendment of Section 28 16.In section 28, ………… (ii) In sub-section (3), after the words “tribunal shall decide” delete the words “in accordance with” and add the words “having regard to” [Note: This amendment is intended to overrule the effect of ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705, where the Hon’ble Supreme Court held that any contravention of the terms of the contract would result in the award falling foul of Section 28 and consequently being against public policy.] 9. Subsequently, the proposed amendment in the 246th Report was accepted, and the Arbitration Act was accordingly amended in 2015. Prior to the amendment, in 2014, the Hon’ble Supreme Court of India in Associate Builders v. Delhi Development Authority (“Associate Builders”)[4] provided a detailed restatement of the law of setting aside of an arbitral award. Pertinently, the above judgment provided a softened view of the restrictions to the powers of the Arbitral Tribunal under Section 28(3) to interpret the terms of the contract. 10. The Hon’ble Supreme Court held that (a)n Arbitral Tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do. Although, the above judgment was passed in 2014 i.e., prior to the amendments brought about in 2015 to the Arbitration Act, however, the said judgment was already in line with the softened view provided under the Amendments of 2015. 11. The effect of the amendments made to Section 28(3) of the Arbitration Act cannot be truly understood, unless the changes made to the ground of public policy and patent illegality provided for in Section 34 of the Arbitration Act under the 2015 amendment is understood. The 2015 Amendment Act, in addition to the amendment to Section 28(3) of the Arbitration Act, inter alia, also removed patent illegality from the ambit of public policy and made it a separate ground under Section 34(2A) of the Arbitration Act. This was done with a view to ensure that public policy of India under Section 34 of the Arbitration Act was equivalent to public policy of India under Section 48 of the Arbitration Act which in essence is the fundamental policy of Indian Law as understood in Renusagar Power Co. Ltd. v. General Electric Co., (“Renusagar”).[5] 12. Notably, patent illegality as a ground under Section 34(2A) of the Arbitration Act was not made applicable to international commercial arbitrations and only to purely domestic arbitrations between Indian parties seated in India. The ground for challenge of award for violation of Section 28(3) of the Arbitration Act continued to remain a part of the ground of patent illegality, but because of the amendment, would now be applicable only to purely domestic arbitrations. IV. Status of the Law relating to Section 28(3) post amendment in 2015 13. The Hon’ble Supreme Court’s decision in Associate Builders[6] had already signalled a shift in judicial approach by tempering the language surrounding public policy and broadening the Tribunal’s interpretive authority with respect to contractual terms. Post the amendment the judicial approach towards interpretation of the contract by the arbitral tribunal became clearer. 14. The Hon’ble Supreme Court in Ssangyong Engineering & Construction Co. Ltd. v. NHAI (“Ssangyong”)[7], clarified the precise legal consequence of the amendment, i.e., a violation of Section 28(3) of the Arbitration Act would henceforth constitute a ground for challenge solely under the doctrine of patent illegality. This ground was now available under Section 34(2A) of the Arbitration Act. Importantly, such a violation could no longer be invoked under the expansive notion of public policy, as had been permissible prior to the legislative amendment. The relevant extract of the Ssangyong[8] judgment highlighting the above is as below: 40. The change made in Section 28(3) by the Amendment Act really follows what is stated in paras 42.3 to 45 in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2-A). 15. The aforesaid position was also explained and affirmed by the Hon’ble Delhi High Court in the case of ONGC Petro Additions Ltd. v. Tecnimont S.P.A,[9] wherein the Court was adjudicating a setting aside application under Section 34 of the Arbitration Act for an award in an India seated International Commercial Arbitration. In the above case, the Petitioner argued that the Arbitral Tribunal had not “taken into account the terms of the contract” and was therefore in violation of Section 28(3) of the Arbitration Act. Since the challenge was in case of an International Commercial Arbitration, the Hon’ble Delhi High Court rejected the above argument of the Petitioners at the threshold as the violation of Section 28(3) under the ambit of patent illegality under Section 34(2A) which was only available to challenge domestic arbitration awards and not in a challenge from an international commercial arbitration. Pertinently, the Delhi High Court relied on the Ssangyong[10] case in support of its decision.[11] 16. As far as the change in the position of law under Section 28(3) relating to powers of the Arbitral Tribunal is concerned, the same was discussed and explained by the Hon’ble Bombay High Court in the case of State of Maharashtra v. Khare & Tarkunde Infrastructure (P) Ltd.[12] Para 15 & 16 of the Judgment is relevant and extracted hereunder: 15. I must hasten to add that Section 28(3) of the Act is not a license to ignore the terms of the contract at all, but it is a statutory recognition that when parties invest their trust in an Arbitral Tribunal to adjudicate their disputes, the Arbitral Tribunal would take into account the terms of the contract as opposed to the earlier position of adjudicating only “in accordance with” the contract. It is in extraordinary situations such as the matter at hand, that it is arguable that the scheme of the fine balance of reciprocal promises that the parties wove together may be required to be given business efficacy where it otherwise presents completely irrational and absurd consequences. Therefore, the evident objective is that the informal, non -Court adjudication must be given greater leeway to do justice without ignoring the terms of the contract but equally taking into account the contract rather than adjudicating only in accordance with the contract while ignoring how the parties conducted themselves. 16. The term “in accordance with” entails a mandatory stipulation while the term “take into account” would entail factoring in the terms of the contract. Therefore, if the contract in question contains a provision of limiting damages, needless to say, it cannot be wished away or ignored. However, when the statutory stipulation is to “take into account” such provision of the contract, as a conscious departure from the phrase “in accordance with”, the legislature in its wisdom has specifically held that the Arbitral Tribunal must have regard to the contract. Yet, in a peculiar situation such as this, where the ROW has simply not been provided for an inordinately long period of time with the Appointed Date fixed by the PWD being ignored by the PWD itself, the empowerment of the Arbitral Tribunal to decide the validity of the limit in the contract introduced by Section 28(3) cannot be ignored. (Emphasis Supplied) 17. In summation therefore, the law post 2015 amendment, as discussed above, clearly demonstrates that arbitral tribunals retain a measure of discretion to interpret the terms of a contract. However, that discretion is not without limits. Where the tribunal’s interpretation is wholly implausible or manifestly unreasonable, the resulting award may be set aside on the ground of patent illegality. It must be underscored that this ground is available exclusively in the context of domestic arbitration. Consequently, in an international commercial arbitration seated in India, a dispute concerning the interpretation of contractual provisions cannot serve as a basis for setting aside the award under the doctrine of patent illegality. This is because a violation of Section 28(3) of the Arbitration Act, which underlies such a challenge, is not recognized as a permissible ground for annulment in the international context. 18. In the following sections, the authors will examine the precise scope of an arbitral tribunal’s authority to interpret contractual terms, the circumstances in which such interpretive authority may be exercised, and the judicial safeguards that have been articulated through precedent to ensure that such authority is not exercised in excess of its proper bounds. V. Ambiguity as a trigger to interpret a contract 19. In cases of ambiguity, construction of the terms of the Contract is the sole prerogative of the Arbitral Tribunal. Even if there is a possible alternative interpretation of the contract, the same should not be interfered with if the Arbitral Tribunal has taken a particular view[13] and the same is a possible view that was reasonable and was arrived at with a fair-minded approach.[14] 20. In cases of ambiguity, therefore guidance on the general interpretation of contracts is provided by the Hon’ble Supreme Court in the case of Bangalore Electricity Supply Co. Ltd. v. E.S. Solar Power (P) Ltd.(“BESCOM”)[15] wherein the Apex Court stated as below: 16. Before embarking on the exercise of interpretation of the agreement it is necessary to take stock of the well-settled canons of construction of contracts. Lord Hoffmann in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [Investors Compensation Scheme Ltd. v. West Bromwich Building Society, (1998) 1 WLR 896 : (1998) 1 All ER 98 (HL)] summarised the broad principles of interpretation of contract as follows : (WLR pp. 912-13) “(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract… (3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification… (4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words…the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean… (5) The “rule” that words should be given their “natural and ordinary meaning” reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require Judges to attribute to the parties an intention which they plainly could not have had.’” 17. The duty of the court is not to delve deep into the intricacies of human mind to explore the undisclosed intention, but only to take the meaning of words used i.e. to say expressed intentions (Kamla Devi v. Takhatmal Land [Kamla Devi v. Takhatmal Land, (1964) 2 SCR 152 : AIR 1964 SC 859] ). In seeking to construe a clause in a contract, there is no scope for adopting either a liberal or a narrow approach, whatever that may mean. The exercise which has to be undertaken is to determine what the words used mean. It can happen that in doing so one is driven to the conclusion that clause is ambiguous, and that it has two possible meanings. In those circumstances, the court has to prefer one above the other in accordance with the settled principles. If one meaning is more in accord with what the court considers to be the underlined purpose and intent of the contract, or part of it, than the other, then the court will choose the former or rather than the latter… Every contract is to be considered with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavouring to collect the intention of the parties, even though the immediate object of inquiry is the meaning of an isolated clause. Bihar SEB v. Green Rubber Industries [Bihar SEB v. Green Rubber Industries, (1990) 1 SCC 731]. 21. The aforesaid observations of the Hon’ble Supreme Court in BESCOM clearly provide a roadmap to the interpretation of contracts, more importantly, in cases of ambiguity or multiple interpretations. 22. As per the Apex Court, the interpretation which is closest to the underlying intent and purpose of the Contract must be preferred and the intention of the parties and the object of the contract is to be understood on the holistic reading of the entire contract and the surrounding circumstances when they were entered into, even though the immediate exercise is to understand the meaning of an isolated clause. In other words, the meaning of an isolated clause is to not be understood in isolation of the entire contract but rather understood from the lens of the object and purpose of the entire contract and the surrounding circumstances when it was entered into. 23. The above explanatory observations of the Court in BESCOM has been subsequently cited with approval by the Supreme Court in Food Corpn. of India v. Abhijit Paul[16] and Cox & Kings Ltd. v. SAP India (P) Ltd.[17] 24. It is interesting to note that even if there exists an ambiguity, the general rule as propounded in the BESCOM Judgment (while placing reliance on Investors Compensation Scheme Ltd. v. West Bromwich Building Society, (1998) 1 WLR 896) is that previous negotiations of the parties and their declarations of subjective intent is to be ignored when interpreting the final written contract between the parties. What however, becomes apparent is that this restriction is necessary so as to focus only on the written word of the contract and to not rely on the previous negotiation which may contain intentions which may have changed once the final contract was entered into. 25. More recently, the Hon’ble Supreme Court reaffirmed the law relating to the interpretation of contracts by the Arbitral Tribunal in the case of OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd.,[18] as follows: Scope of interference with the interpretation/construction of a contract accorded in an arbitral award 84. An Arbitral Tribunal must decide in accordance with the terms of the contract. In a case where an Arbitral Tribunal passes an award against the terms of the contract, the award would be patently illegal. However, an Arbitral Tribunal has jurisdiction to interpret a contract having regard to terms and conditions of the contract, conduct of the parties including correspondences exchanged, circumstances of the case and pleadings of the parties. If the conclusion of the arbitrator is based on a possible view of the matter, the Court should not intefere [ See : SAIL v. Gupta Brother Steel Tubes Ltd., (2009) 10 SCC 63 : (2009) 4 SCC (Civ) 16; Pure Helium India (P) Ltd. v. ONGC, (2003) 8 SCC 593; McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181; MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293] . But where, on a full reading of the contract, the view of the Arbitral Tribunal on the terms of a contract is not a possible view, the award would be considered perverse and as such amenable to interference [South East Asia Marine Engg. & Constructions Ltd. v. Oil India Ltd., (2020) 5 SCC 164 : (2020) 3 SCC (Civ) 1]. 26. The aforesaid judgment therefore clarifies the position of interpretation of contracts under the Arbitration Act, i.e., the power of the Arbitral Tribunal to interpret the terms of the Contract only activates when there exists a certain ambiguity in a clause between multiple clauses of the Contract itself. It is in that scenario that the plausible and possible view test applies. 27. In a multi-clause contract, if one clause is to be interpreted in a manner that inflicts violence upon another part of the contract, it would follow that both such clauses would need to be reconciled. When the arbitral tribunal performs such an exercise it is not re-writing the terms of the contract and is rather reconciling the multiple provisions in a cohesive manner so as to give them a logical meaning, because not doing so would have led to an ambiguity and absurdity in the interpretation of the terms of the contract.[19] VI. Disregarding terms of the contract OR Reading the contract as a whole 28. As discussed, and explained above, the question regarding the powers of the Arbitral Tribunal to interpret the Contract only arises in cases of ambiguity. As a corollary it is absolutely clear that when the terms of the Contract are clear, express, and unambiguous, the Arbitral Tribunal has no power to override or disregard the same[20] or seek recourse to any tools of interpretation.[21] Disregarding such terms of the Contract would be a clear violation of Section 28(3) of the Arbitration Act and accordingly the award passed therein would be liable to be set aside as being patently illegal. The Hon’ble High Court of Delhi in ONGC Ltd. v. JSIW Infrastructure (P) Ltd,[22] has succinctly laid out the law in this regard as below: 52. In State of Chhattisgarh v. Sal Udyog Private Limited, 2021 SCC OnLine SC 1027, the Hon'ble Supreme Court, held that an arbitrator's failure to render a decision in accordance with the terms of the contract attracts the ground of “patent illegality”. Such a lapse constitutes a flagrant breach of Section 28(3) of the Act, which mandates that the arbitral tribunal shall have due regard to the terms of the contract while delivering an award. This form of patent illegality is not only manifest on the face of the award but also strikes at the very core of the dispute, thereby warranting judicial interference and hence the reliance of the Appellant on the decision of the Hon'ble Supreme Court in HRD Corpn. (supra), wherein it is held that the construction of the terms of the contract is primarily the function of the arbitrator is not relevant when an arbitrator has ignored the clear and unambiguous terms of the contract. When there is only one view possible, it is open for the Court while exercising jurisdiction under Section 34 of the Act to set aside the Award when the view expressed by the arbitrator is not a plausible view. 29. In the guise of interpretation of the Contract, therefore, the Arbitral Tribunal is not empowered to ignore or disregard the terms of the Contract. Disregarding mandatory terms of the contract, unilateral addition or alteration of the terms of the contract is in effect a rewriting of the contract, which the Arbitral Tribunal has no authority to do.[23] It is trite law that while arbitrators have exclusive power to interpret contract provisions, they must operate strictly within the contract's boundaries.[24] 30. Further, even in cases of clauses of the contract which restrict certain types of damages, the Courts have been clear that such clauses have to be upheld.[25] To this extent, an Arbitral Award which granted loss of profit claims, in violation of express bar under the contract towards grant of such damages on account of a possible breach, was set aside by the Hon’ble High Court of Delhi and the same was upheld by the Division Bench in PLUS91 Security Solutions v. NEC Corpn. India (P) Ltd.[26] The Court, while setting aside the arbitral award, examined the historical jurisprudence in the context of restricting certain types of damages for breach caused by a party. The Hon’ble Delhi High Court concluded that “(i) if the parties have agreed that a particular type of damages would not be paid, the said agreement is required to be implemented. In terms of Section 28(3) of the A&C Act, the Arbitral Tribunal is required to render a decision having regard to the terms of the contract.”[27] The Court reiterated that not honouring such clauses in the contract would in effect amount to rewriting the bargain between the parties and the same could not be permitted.[28] VII.Entire Agreement Clauses and express restrictions on the power of the Tribunal to look into prior negotiations 31. In McDermott International Inc. v. Burn Standard Co. Ltd.[29] the Hon’ble Supreme Court held that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties.[30] 32. Contracts today, however, have gone one step ahead and restricted the power of the Courts and Tribunal to utilise any past conduct of the parties as a tool to interpret the contract. Even in the BESCOM[31] case discussed above, the Hon’ble Supreme Court has cautioned against relying on pre-contract negotiations to interpret the contract. The caution has rather been crystallised by parties out of abundant caution by resorting to incorporate an Entire Agreement Clause. Such a clause effectively cordons off arbitral discretion by declaring that the written agreement constitutes the full understanding between the parties, rendering external negotiations, implied obligations, past dealings and conduct, inadmissible in interpreting the contract. 33. The true extent and meaning of such clauses was discussed in JSIW Infrastructure v. ONGC,[32] where the Delhi High Court held that once parties consciously enter into an “entire agreement clause”, the arbitrators have no scope to look beyond the defined contractual corpus. The relevant extract highlighting the above observation of the Delhi High Court is as below: 48. The impugned judgment has correctly held that when the terms of the contract were unambiguous, the negotiations between the parties in the contract should not have been looked into considering clause 1.2.5 of the GCC, which stated that the contract constitutes an entire agreement and supersedes all past negotiations, communications and agreements entered into between the parties prior to the execution of the contract. Ignoring an explicit clause of the contract or acting contrary to the terms of the contract amounts to patent illegality. The above law has been settled in the decision of the Hon'ble Supreme Court in Indian Oil Corporation Ltd. (supra). 34. Cumulatively, the judgments cited above illustrate that once the parties have fixed their interpretive reference frame, the Arbitral Tribunal is not permitted to deviate from it, as the same will amount to a violation of Section 28(3) of the Arbitration Act and consequently make the award amenable to challenge under Section 34(2A) of the Arbitration Act. VIII. Implied Terms can be read into the Contract, but only to lend Business Efficacy 35. In the interpretation of a contract, it is a recognised aspect that even a fundamental and obvious term of the contract may be inadvertently omitted from the express language of the document by the parties. In such a situation, the Courts are empowered to imply such a term into the Contract under the assumption that the parties always intended the same to be a term of the Contract. Such an exercise is done to provide business efficacy to the terms of the Contract. This principle has been re-affirmed and applied by the Hon’ble Supreme Court in Nabha Power v. Punjab State Power Corporation (“Nabha Power”).[33] In the above case, the Hon’ble Supreme Court relied on the penta test propounded by the English Courts for implying terms into a commercial contract. The penta test, which was set out in B.P. Refinery (Westernport) Proprietary Limited v. The President Councillors and Ratepayers of the Shire of Hastings[34] stipulate that the following five conditions need to be satisfied for implying terms into a commercial contract: (a) the exercise of implying terms must be reasonable and equitable; (b) implying terms must be necessary to give business efficacy to the contract; (c) the officious bystander test which posits that the missing term was so obvious in the contract that a reasonable third party would also agree that it was an obvious term; (d) the implied term(s) is capable of clear expression and (e) the implied term must not contradict any express term of the contract. The aforesaid principles on business efficacy as stipulated by the Nabha Power judgment were relied upon and followed by the Hon’ble Supreme Court in Adani Power (Mundra) Ltd. v. Gujarat ERC.[35] 36. In subsequent judgments of the Supreme Court, however, a more simplified criterion has been formulated for implying terms into the Contract. The same has also been cautioned so to not violate the clear, express and unambiguous terms of the contract while implying a term into the Contract. In Maharashtra State Electricity Distribution Co. Ltd. v. Ratnagiri Gas & Power (P) Ltd. (“Ratnagiri Power”), the Hon’ble Supreme Court held that that the interpretation of a commercial document cannot be arrived at in a manner which is at complete odds of its original intent and purpose and that certain implied terms can be read into the Agreement if the same is in line with the original intent and purpose and does not go against the express terms of the Contract.[36] In Ratnagiri Power, the Supreme Court also placed reliance on its previous judgment in Transmission Corpn. of Andhra Pradesh Ltd. v. GMR Vemagiri Power Generation Ltd., in which the Court held that “if the contract is capable of interpretation of its plain meaning with regard to the true intention of the parties it will not be prudent to read implied terms on the understanding of a party, or by the court, with regard to business efficacy.” [37] Hence, we can see that the interpretative liberty granted to the Courts and Tribunals are always cautioned and tempered with restraints so as to disallow them from running around like an unruly horse. 37. The judgment and the principles of Nabha Power relating to business efficacy and implied terms principles were cited with approval and explained in the case of OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd.[38] wherein the Hon’ble Supreme Court remarked as below: “Whether unexpressed term can be read into a contract as an implied condition 85. Ordinarily, terms of the contract are to be understood in the way the parties wanted and intended them to be. In agreements of arbitration, where party autonomy is the grund norm, how the parties worked out the agreement, is one of the indicators to decipher the intention, apart from the plain or grammatical meaning of the expressions used [Balco v. Kaiser Aluminium Technical Services Inc., (2016) 4 SCC 126 : (2016) 2 SCC (Civ) 580] . 86. However, reading an unexpressed term in an agreement would be justified on the basis that such a term was always and obviously intended by the parties thereto. An unexpressed term can be implied if, and only if, the court finds that the parties must have intended that term to form part of their contract. It is not enough for the court to find that such a term would have been adopted by the parties as reasonable men if it had been suggested to them. Rather, it must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, although tacit, forms part of the contract [Adani Power (Mundra) Ltd. v. Gujarat ERC, (2019) 19 SCC 9 : (2020) 4 SCC (Civ) 330] . 87. But before an implied condition, not expressly found in the contract, is read into a contract, by invoking the business efficacy doctrine, it must satisfy the following five conditions: (a) it must be reasonable and equitable; (b) it must be necessary to give business efficacy to the contract, that is, a term will not be implied if the contract is effective without it; (c) it must be obvious that “it goes without saying”; (d) it must be capable of clear expression; (e) it must not contradict any terms of the contract [Nabha Power Ltd. v. Punjab SPCL, (2018) 11 SCC 508 : (2018) 5 SCC (Civ) 1, followed in Adani Power case, (2019) 19 SCC 9 : (2020) 4 SCC (Civ) 330] . 38. What becomes clear is that the arbitral tribunal has the power to lend business efficacy to the contract by implying terms which are derived from the purpose and intendment of the parties to enter into a contract. The implied terms however cannot go beyond the clear, express and unambiguous terms which are to always be the guiding light to understand the original intent and understanding arrived at between the parties. IX. Conclusion 39. The evolution of Section 28(3) of the Arbitration and Conciliation Act, 1996 aptly illustrates how Indian arbitration law has maintained the equilibrium between arbitral autonomy and judicial supervision. The Hon’ble Supreme Court in ONGC v. SAW Pipes Ltd., imposed a rigid standard of fidelity to contract that left little room for interpretative discretion. The 246th Law Commission Report and the 2015 Amendment to the Arbitration Act recalibrated this standard by requiring tribunals to “take into account” rather than to “decide in accordance with” contractual terms, thereby signalling a more deferential stance toward arbitral interpretation. Subsequent cases such as Ssangyong Engineering confirmed that arbitral tribunals are entitled to interpret ambiguous contractual provisions, even on points of law, provided their construction is reasonable and not perverse. 40. At the same time, emerging jurisprudence clarifies that awards remain vulnerable to challenge on the ground of patent illegality in domestic arbitrations where tribunals disregard clear contractual language. This nuanced approach recognises that, although tribunals have interpretive latitude, their authority is not unbounded and must remain anchored in party autonomy. Indian arbitration law increasingly treats legitimacy as resting on a careful balance: granting sufficient deference to arbitral interpretation to preserve finality and efficiency, while retaining judicial oversight to prevent manifest excess. The broader trajectory of contractual interpretation reflects a system moving toward international best practices. Greater stability and maturity in Indian jurisprudence on contractual interpretation will, in turn, strengthen the confidence of businesses and chambers of commerce in arbitration as an efficient and reliable mode of dispute resolution. Given the length of the paper, the same has been uploaded as a PDF Document, free to download. [1] Gaurav Rai is an Independent Advocate and Arbitration Consultant based out of Delhi. He is the co-founder of the Arbitration Workshop Blog. He can be contacted at gaurav@thearbitrationconsultant.in [2] Gautam Mohanty is a Ph.D Scholar and Advocate based out Warsaw, Poland and Delhi, India. He is the co-founder of the Arbitration Workshop Blog. He can be contacted at gautam.mohanty1414@gmail.com [3] ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705 [4] Associate Builders v. DDA, (2015) 3 SCC 49. [5] Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644. [6] Associate Builders v. DDA, (2015) 3 SCC 49 [7] Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131. [8] Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131. [9] ONGC Petro Additions Ltd. v. Tecnimont S.P.A, 2023 SCC OnLine Del 8415 [Para 72-74]. [10] Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131. [11] ONGC Petro Additions Ltd. v. Tecnimont S.P.A 2023 SCC OnLine Del 8415 [Para 91-92]. [12] State of Maharashtra v. Khare & Tarkunde Infrastructure (P) Ltd., 2026 SCC OnLine Bom 3796 [Para 15 & 16] [13] NHAI v. Hindustan Construction Co. Ltd., (2024) 6 SCC 809 [Para 16]; Consolidated Construction Consortium Ltd. v. Software Technology Parks of India, 2025 SCC OnLine SC 956 [Para 28]. [14] Konkan Railway Corpn. Ltd. v. Chenab Bridge Project, (2023) 9 SCC 85 [Para 19 & 20]; Somdatt Builders-NCC-NEC (JV) v. NHAI, (2025) 6 SCC 757 [Para 37]. [15] Bangalore Electricity Supply Co. Ltd. v. E.S. Solar Power (P) Ltd., (2021) 6 SCC 718. [16] Food Corpn. of India v. Abhijit Paul, (2023) 15 SCC 40 [Para 20]. [17] Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1 [Para 95]. [18] OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., (2025) 2 SCC 417 [Para 84]. [19] State of Maharashtra v. Khare & Tarkunde Infrastructure (P) Ltd., 2026 SCC OnLine Bom 3796 [Para 38 & 41] [20] Jindal Rail Infrastructure Ltd. v. Union of India, 2024 SCC OnLine Del 3065 [Para 18]. [21] Union of India v. Jindal Rail Infrastructure Ltd., 2022 SCC OnLine Del 1540 [Para 76]. [22] ONGC Ltd. v. JSIW Infrastructure (P) Ltd., 2025 SCC OnLine Del 3811. [23] PSA Sical Terminals (P) Ltd. v. V.O. Chidambranar Port Trust, (2023) 15 SCC 781 (Para 85). [24] GMR Kamalanga Energy Ltd. v. SEPCO Electric Power Construction Corpn. Tower, 2023 SCC OnLine Ori 5882; Indian Oil Corpn. Ltd. v. Shree Ganesh Petroleum, (2022) 4 SCC 463; see also Sneha Rath and Gaurav Rai, ‘Interpretation of Contract v. Disregard of the Terms of the Contract’ (Arbitration Workshop, 20 May 2022) https://www.thearbitrationworkshop.com/post/interpretation-of-contract-v-disregard-of-the-terms-of-the-contract [25] Gaurav Rai, ‘Exclusionary Clauses in Construction Contracts – Development of Jurisprudence Vis-à-Vis Arbitration’ (Arbitration Workshop, 27 October 2020) https://www.thearbitrationworkshop.com/post/exclusionary-clauses-in-construction-contracts-development-of-jurisprudence-vis-à-vis-arbitration [26] PLUS91 Security Solutions v. NEC Corpn. India (P) Ltd., 2024 SCC OnLine Del 5114 (Para 79-82). [27] PLUS91 Security Solutions v. NEC Corpn. India (P) Ltd., 2024 SCC OnLine Del 5114 [Para 76]. [28] PLUS91 Security Solutions v. NEC Corpn. India (P) Ltd., 2024 SCC OnLine Del 5114 [Para 63 & 64]. [29] McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181 [30] McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181 [Para 112] [31] Bangalore Electricity Supply Co. Ltd. v. E.S. Solar Power (P) Ltd., (2021) 6 SCC 718. [32] ONGC Ltd. v. JSIW Infrastructure (P) Ltd., 2025 SCC OnLine Del 3811. See also, Joshi Technologies International Inc. v. Union of India (2015) 7 SCC 728; Lindsay International Pvt. Ltd. v. Laxmi Niwas Mittal [(2017) SCC OnLine Cal 270. [33] Nabha Power v. Punjab State Power Corporation (2018) 11 SCC 508. [34] B.P. Refinery (Westernport) Proprietary Limited v. The President Councillors and Ratepayers of the Shire of Hastings [1977] UKPC 13. See also, Investors Compensation Scheme Ltd. v. West Bromwich Building Society, (1998) 1 All ER 98 and Attorney General of Belize and Ors. v. Belize Telecom Ltd. and Anr., (2009) 1 WLR 1988. [35] Adani Power (Mundra) Ltd. v. Gujarat ERC (2019) 19 SCC 9 [36] Maharashtra State Electricity Distribution Co. Ltd. v. Ratnagiri Gas & Power (P) Ltd., (2024) 1 SCC 333 [Para 36]. [37] Transmission Corpn. of Andhra Pradesh Ltd. v. GMR Vemagiri Power Generation Ltd., (2018) 3 SCC 716 [Para 26]. [38] OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., (2025) 2 SCC 417.

Downloadable PDF Version Khushbu Turki[1] INTRODUCTION 1. Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act, 1996”) stipulates that unless otherwise agreed by the parties, an arbitral tribunal may grant pre-award interest i.e. pre-reference and pendente lite interest at such rate as it deems reasonable. However, while the Act makes room for such contractual provisions proscribing the grant of pre-award interest, it is silent on the nature of such prohibition. The Act does not elaborate upon the extent to which a general prohibition on granting interest for certain delayed payments or on amounts payable to the contactor under the contract bars the arbitral tribunal from granting interest. This has given rise to elaborate jurisprudence on the effectiveness of contractual provisions barring the grant of pre-award interest. JUDICIAL INTERPRETATION IN THE INITIAL YEARS No Bar Against the Award of Pre-Reference and Pendente Lite Interest 2. The question regarding the arbitral tribunal’s authority to award pendente lite interest notwithstanding a prohibition in the contract against the payment of interest on delayed payments first came up under the Arbitration Act, 1940 (“Arbitration Act, 1940”) before a division bench of the Supreme Court in Port of Calcutta v. Engineers-De-Space-Age (“Port of Calcutta”).[2] The interest proscribing clause stated as follows: “No claim for interest will be entertained by the Commissioners with respect to any money or balance which may be in their hands owing to any dispute between themselves and the Contractor or with respect to any delay on the part of the Commissioners in making interim or final payment or otherwise.” 3. While considering the prohibitory clause, the Supreme Court relied on the principles enunciated by the constitution bench in Irrigation Deptt., Govt. of Orissa v. G.C. Roy[3] (“G.C. Roy”), wherein the Supreme Court had surmised that an arbitral tribunal would have the authority to award interest for the pre-reference, pendente lite and post-award period if the contract had no express bar regarding the award of such interest. 4. Interestingly, the Supreme Court concluded that the aforementioned clause only prohibited the Commissioner from entertaining any claims for interest. The Court adopted a strict construction of the clause and held such clauses to not be applicable to the arbitral tribunal. This approach was again followed by the Supreme Court in Madnani Construction v. Union of India.[4] 5. Thereafter, in State of U.P. v. Harish Chandra & Co.[5] (“Harish Chandra”), a three-judge bench of the Supreme Court dealt with a similar question regarding the interest payable on damages. The relevant clause prohibiting interest stated as follows: “No claim for interest or damages will be entertained by the Government with respect to any moneys or balances which may be lying with the Government owing to any dispute, difference; or misunderstanding between the Engineer-in-Charge in marking periodical or final payments or in any other respect whatsoever.” 6. The Court held that the clause barred interest only for “moneys or balance” lying with the Government for the specified reasons or for any other reasons which would lead to such moneys lying with the Government. The Court noted that the damages claimed could not be inferred as “money lying with the Government”. Hence, the arbitral tribunal was held entitled to have granted pre-reference interest to the Claimant. It is imperative to note that this decision was also given in context of the Arbitration Act, 1940. Agreements Barring the Award of Pre-Reference or Pendente Lite Interest 7. In Sayeed Ahmed & Co. v. State of U.P.[6] (“Sayeed Ahmed”), while dealing with an interest barring clause in the context of the Arbitration Act, 1996, a division bench of the Supreme Court described the distinction between a prohibition in an interest barring clause operating only against the other party, and a prohibition operating qua the arbitrator from entertaining such claims (as held in Port of Calcutta) as outlandish. It was held that an interest proscribing clause did not necessarily need to include a specific bar against the arbitral tribunal. The relevant clause in Sayeed Ahmed stated as follows: “No claim for interest or damages will be entertained by the Government with respect to any money or balance which may be lying with the Government or any become due owing to any dispute, difference or misunderstanding between the Engineer-in-Charge on the one hand and the contractor on the other hand or with respect to any delay on the part of the Engineer-in-Charge in making periodical or final payment or in any other respect whatsoever.” 8. The Court specifically noted that the previous decisions allowing for the award of interest despite the existence of such prohibitory clauses in the contract could not be applicable to arbitrations under the Arbitration Act, 1996. Further, the Court observed that the clause in Harish Chandra was restrictive in nature, and barred interest on payments only related to the “moneys lying” with the opposite party due to certain reasons. However, detailed clauses like the aforementioned clause were held to absolutely bar the grant of interest in any respect. Similar observations were made by the Court in Sree Kamatchi Amman Constructions v. Railways.[7] 9. In view of the conflicting judgments regarding an arbitral tribunal’s authority to award interest in Port of Calcutta, Madnani Construction, Sayeed Ahmed and Kamatchi Constructions, the question of determining when the grant of interest could be prohibited under the Arbitration Act, 1940 was referred to a three-judge bench in Union of India v. Ambica Construction (“Ambica Construction”).[8] 10. The three-judge bench relied on the judgments in G.C. Roy and Dhenkanal Minor Irrigation Division, Orissa v. N.C. Budharaj[9] to opine that the answer would depend on the nature of the prohibitory clause in each case, and the overall intention of the agreement. The Court also observed that while arbitration was understood to be an alternative mode of dispute resolution, an arbitral tribunal did not automatically possess all powers conferred on courts of law and was bound to decide disputes as per the agreement entered into between the parties. 11. Thereafter, in Ferro Concrete Construction (India) (P) Ltd. v. State of Rajasthan,[10] another division bench of the Supreme Court relied on Ambica Construction to hold that under the Arbitration Act, 1940, a strict approach must be adopted, and a clause not specifically mentioning the arbitral tribunal, but providing that no interest may be granted on “amounts payable” under the contract shall not bar the tribunal from granting pre-award interest. The shift in interpretation 12. The jurisprudence regarding the nature of interest barring clauses was sought to be settled by a three-judge bench in Jaiprakash Associates Ltd. v. Tehri Hydro Development Corpn. (India) Ltd.[11] (“Jaiprakash Associates”) The relevant clause in Jaiprakash Associates stated as follows: “No claim for interest or damage will be entertained or be payable by the corporation in respect of any amount or balance which may be lying with the corporation owing to any dispute, difference or misunderstanding between the parties or in respect of any delay or omission on the part of the Engineer in charge in making intermediate or final payments or in any other respect whatsoever.” 13. The Court emphasized on the change in the nature of authority to grant interest under the Arbitration Act, 1940 and the Arbitration Act, 1996, and exhaustively discussed the previous judgments in this regard. Additionally, the Court expressly noted that the Port of Calcutta judgment had been given under the Arbitration Act, 1940, after which, the position of law underwent a change, as clarified in the Sayeed Ahmed judgment. 14. When faced with the question regarding the correctness of Sayeed Ahmed in view of the three-judge bench decision in Harish Chandra, the Court noted that Harish Chandra was a decision under the Arbitration Act, 1940, given in context of a restrictive clause, which had been interpreted to not bar the arbitral tribunal’s power to award pre reference interest. 15. Another intriguing question before the Court was regarding the interpretation of such broadly worded interest proscribing clauses – prohibiting the grant of interest “in any other respect whatsoever”, and whether such broad constructions should be subject to the rule of ejusdem generis, thereby restricting the prohibition only to conditions/ situations similar to those enumerated in such clauses, and not being applicable to all claims of interest on damages, as explained in Harish Chandra. The Court noted that the rule of ejusdem generis would be applicable only in the cases where the terms preceding the words of broad construction/ general import form a distinct genus. The said construction could not be applied where the terms preceding such words of broad construction set out different criteria barring the claims of interest, since they would not form part of a distinct genus. 16. Finally, the Court emphasized that the grant of pendente lite interest would depend on the phraseology used in the agreement, and a clause stipulating that no interest would be payable in certain circumstances and in any other respect whatsoever, would lead the Court to find an express bar against the payment of interest. 17. Thereafter, questions regarding the interpretation of such clauses once again came up before division benches of the Supreme Court in UOI v. Manraj Enterprises[12] and Garg Builders v. Bharat Heavy Electricals Limited.[13] The relevant clauses were as follows: “No interest will be payable upon the earnest money or the security deposit or amounts payable to the contractor under the contract, but government securities deposited in terms of sub-clause (1) of this clause will be repayable with interest accrued thereon.” “No interest shall be payable by BHEL on Earnest Money Deposit, Security Deposit or on any moneys due to the contractor.” 18. Relying on the principles enunciated in Sayeed Ahmed and Jaiprakash Associates, in both cases, the Court held that a bar on interest related to any amounts that would be “payable” to the contractor under the contract or “would be due” to the contractor qualified as an absolute bar under Section 31(7)(a) of the Arbitration Act, 1996. 19. In Manraj Enterprises, the Court also relied upon another three-judge bench decision in Union of India v. Bright Power Projects (India) (P) Ltd.,[14] wherein the Court had evaluated the following clause: “No interest will be payable upon the earnest money and the security deposit or amounts payable to the contractor under the contract, but government securities deposited in terms of sub-clause (1) of this clause will be repayable with interest accrued thereon” 20. The Court had noted that once a contractor agreed to not claim any interest on any amount payable under the contract, it could not claim interest on such amounts either before a civil court or an arbitral tribunal. Hence, the expression “amounts payable to the contractor under the contract” was considered to be wide enough to cover all such amounts which became payable, even under an arbitral award. 21. Despite the decisions in the aforementioned cases, there has been considerable ambiguity surrounding the proper construction of interest proscribing clauses. In ONGC Ltd. v. G & T Beckfield Drilling Services (P) Ltd.[15] (“Beckfield”), a division bench of the Supreme Court has again attempted to clarify the position. The relevant contractual clause stated as follows: “…Should corporation question any item or items of an invoice, it may withhold payment of the amount in dispute until such matter is resolved between the parties, but the amount not in dispute is to be paid within above period. No interest shall be payable by ONGC on any delayed payment /disputed claim.” 22. The question in this case arose because the award of the arbitral tribunal granting pendente lite interest was challenged as interest being granted on delayed payments. However, the Court, while relying on a series of judgments, held that pendente lite interest granted by the tribunal would not qualify as interest on a “delayed payment”, and hence, bars on such delayed payments would not constitute a prohibition on the grant of pendente-lite interest by the arbitral tribunal. 23. The Court also discussed the law under the Arbitration Act, 1996 in detail and emphasized that while the grant of post award interest is purely governed by the Arbitration Act, 1996 and is not subject to the agreement between the parties, the parties may very well contract out of the interest for the pre-reference and pendente lite period. DISTINCTION BETWEEN THE ARBITRATION ACT, 1940 AND THE ARBITRATION ACT, 1996 24. The Arbitration Act, 1940 incorporated no specific provision empowering the arbitral tribunal to grant interest. However, in various judgments, as mentioned hereinabove, the Supreme Court has recognized the arbitral tribunal’s authority to grant pre-award and post-award interest on the rationale that persons deprived of the use of money to which they are legitimately entitled would also be entitled to compensation for such deprivation.[16] Therefore, when the contract did not prohibit the grant of interest, it was presumed that the possibility of granting interest was an implied term in the agreement. 25. Moreover, since clauses barring the payment of interest are generally frowned upon, Courts subjected such clauses to the test of strict construction. Consequently, applying this principle under the Arbitration Act, 1940, unless there existed an express and specific provision prohibiting the arbitral tribunal from awarding interest, it was presumed that the tribunal had the authority to grant interest. 26. In contrast, Section 31(7)(a) of the Arbitration Act, 1996 bars the payment of interest if the agreement provides otherwise, thereby sanctifying party autonomy and dispensing with the requirement of the agreement incorporating a specific bar against the arbitral tribunal from granting interest. The Arbitration Act, 1996, therefore, sources the authority of the arbitral tribunal to grant pre-award interest not from the general principle of an aggrieved party being entitled to claim interest, but from the very agreement which authorizes the tribunal to adjudicate the dispute. Accordingly, arbitral tribunals have been vested with the jurisdiction to award interest for the pre-award (pre-reference and pendente lite periods) and post-award periods, permitting parties to contract out of interest only in respect of the former. 27. In Reliance Cellulose Products Limited v. ONGC Limited,[17] a Division Bench of the Supreme Court observed that while the grant of pre-award interest under the Arbitration Act, 1940 depended on the phraseology used in the agreement, nature of the claim, the items regarding which the power to award interest had been taken away, and other factors; under the Arbitration Act, 1996, a plain bar in the agreement would constitute sufficient prohibition on the grant of pre-award interest. However, even while evaluating the clause in the context of the Arbitration Act, 1940, the Court did not consider a bar on interest for “any delayed payments” as a bar against the award of interest by the arbitral tribunal, an observation which has also been made by the Supreme Court in Beckfield, in the context of the Arbitration Act, 1996. THE WAY FORWARD 28. Construction contracts are generally executed over a long period of time, often as a result of multiple extensions of time. Consequently, interest proscribing clauses are usually incorporated in such contracts. To arrive at a definitive understanding of how such clauses must be drafted, it is essential to examine the manner in which Courts have interpreted these clauses. 29. In Port of Calcutta, the Court never ventured into an interpretation of the interest barring clause. The clause was simply understood to operate as a bar only with respect to the opposite party, and not with respect to the arbitral tribunal. In Harish Chandra, the relevant clause prohibited interest for “any moneys lying with the government” for the two reasons specified or “in any other respect whatsoever”. Hence, the clause was inferred to bar interest on claims related to moneys lying with the government for the reasons given and on claims related to moneys lying with the government in any other respect. 30. Pertinently, the construction of the interest proscribing clauses in the judgments pronounced thereafter materially differed from the clause in Harish Chandra. For instance, the relevant clauses in Sayeed Ahmed and Jaiprakash Associates prohibited interest in respect of “the money lying with the government owing to any dispute” or “in respect of any delays in making payments” or “in any other respect whatsoever”. Since there was no distinct genus, the phrase “any other respect whatsoever” was considered to be of a wide import, including interest on damages as well. 31. Recently, the Delhi High Court has examined such interest proscribing clauses in a similar manner. In South Delhi Municipal Corporation of Delhi v. PKSS Infrastructure Private Limited,[18] the arbitral tribunal had granted pre-award interest, despite the relevant clause stating as follows: “The EMD, Cash Security and the Contract Performance Guarantee shall not carry any interest whatsoever in any circumstances.” 32. Since the clause expressly provided that no interest whatsoever would be payable on these items, the Court rejected the contention that the tribunal could have awarded interest on the amounts due notwithstanding the said clause, and set aside the award to that extent. 33. Thereafter, in National Building Construction Corporation v. Sharma Enterprises,[19] the relevant clause stated as follows: “No claim for interest will be entertained by the corporation in respect of any balance payments or any deposit which may be held up with the corporation due to any dispute between the Corporation and sub-contractor or in respect of any delay on the part of the corporation in making monthly or final payments or otherwise.” 34. The Court held that the clause in question did not merely restrict the payment of interest for delayed items, rather, the usage of the words “or otherwise” broadened the scope of the clause and implied a general prohibition on the grant of pre-award interest. 35. While it is now established that an express or implied prohibition on interest must be given effect under Section 31(7)(a) of the Arbitration Act, 1996, the nature of the prohibition remains a grey area. While the Court has clarified that a bar on interest on “amounts payable to the contractor” may qualify as an absolute bar, a plain prohibition on awarding interest on “delayed payments” or “disputed claims” has not always been inferred as a bar to the award of pre-reference and pendente lite interest by the arbitral tribunal. In Beckfield, the Supreme Court has distinguished between clauses specifically prohibiting interest "in any respect whatsoever", and those only barring interest on delayed or disputed invoices, holding the latter clauses to be inconsequential for the grant of pre-award interest. 36. In these circumstances, as mentioned in Ambica Construction, the nature and construction of the ouster clause seems to be the only determinative factor to understand the extent to which the arbitral tribunal is prohibited from awarding interest. Therefore, while clauses simply prohibiting interest on delayed payments cannot constitute an effective bar, clauses specifying the various situations in which no interest shall become due, clauses emphasizing that no interest shall become payable at any point of time, and clauses highlighting that no interest shall be granted in any respect whatsoever to the aggrieved party are likely to withstand judicial scrutiny. Downloadable PDF Version [1]Khushbu Turki is an Associate at Shardul Amarchand Mangaldas & Co. She can be reached at khushbuturki14@gmail.com. [2] Port of Calcutta v Engineers-De-Space-Age (1996) 1 SCC 516. [3] Irrigation Deptt., Govt. of Orissa v G.C. Roy (1992) 1 SCC 508. [4] Madnani Construction v Union of India (2010) 1 SCC 549. [5] State of U.P. v Harish Chandra & Co. (1999) 1 SCC 63. [6] Sayeed Ahmed & Co. v State of U.P. (2009) 12 SCC 26. [7] Sree Kamatchi Amman Constructions v Railways (2010) 8 SCC 767. [8] Union of India v Ambica Construction (2016) 6 SCC 36. [9] Dhenkanal Minor Irrigation Division v N.C. Budharaj (2001) 2 SCC 721. [10] Ferro Concrete Construction (India) (P) Ltd. v State of Rajasthan 2025 SCC OnLine SC 708. [11] Jaiprakash Associates Ltd. v Tehri Hydro Development Corpn. (India) Ltd. (2019) 17 SCC 786. [12] Union of India v Manraj Enterprises (2022) 2 SCC 331. [13] Garg Builders v BHEL (2022) 11 SCC 697. [14] Union of India v Bright Power Projects (India) (P) Ltd. (2015) 9 SCC 695. [15] ONGC Ltd. v G & T Beckfield Drilling Services (P) Ltd. 2025 SCC OnLine SC 1888. [16] Pam Developments (P) Ltd. v State of W.B. (2024) 10 SCC 715. [17] Reliance Cellulose Products Limited v ONGC Limited (2018) 9 SCC 266. [18] South Delhi Municipal Corpn. of Delhi v PKSS Infrastructure (P) Ltd. 2025 SCC OnLine Del 7750. [19] National Building Construction Corpn. v Sharma Enterprises 2025 SCC OnLine Del 8505.

-Rohini Roy[1] The Supreme Court in a recent judgment clarified the referral court’s scope of inquiry in Section 11(6) petitions post the Arif Azim Judgment. The Apex Court’s insistence that courts must refrain from an “intricate evidentiary enquiry” to determine if the Section 11(6) petition is barred by limitation, has sought to settle the extent of intervention that Courts should exercise. On the other hand, we also see cases like Perkins Eastman, where the court is called to intervene to bar unilateral appointment of an arbitrator. These recent trends highlight the importance of adhering to pre-arbitral steps, especially the filing of a valid notice, in forging consensus and the court’s intervention in appointment of an arbitrator. A petition under Section 11(6) of the Arbitration and Conciliation Act, 2015 is one of the first steps a party may take to commence an arbitration if the other side is uncooperative. Section 11(6) essentially allows the Court on the request of either party to appoint an arbitrator if the other party fails to act as per the stipulated procedure or if the parties are unable to agree on appointment. A section 11 petition is therefore crucial in commencing the arbitration through the appointment of a neutral arbitrator in a timely manner to stem further prejudice to either party’s rights. The first thing that the Court must examine is whether a valid notice of arbitration was sent by either party. A notice of arbitration is essential for commencing an arbitration as per Section 21 of the Act. Not only does it formally notify the respondents of the existence of a dispute, but also the claimant’s intention to refer the dispute to arbitration either under a pre-existing arbitration agreement or under the Act. Thus, the importance of a notice under Section 21 of the Act cannot be underscored for understanding the disputes referred for arbitration, calculating the relevant time periods for the purposes of limitation in matters relating thereto and the appointment of the arbitrator. A litany of cases has upheld the mandatory nature of the notice under section 21, including the recent judgment passed by Just. Muralidhar in Alupro Building Systems Pvt. Ltd. v. Ozone Overseas Pvt. Ltd. Any application under Section 11 of the Act may be rejected if the notice does not make appointment as per the agreed procedure between the parties. Just. Muralidhar in his judgment noted that- “The notice under Section 21 serves an important purpose of facilitating a consensus on the appointment of an arbitrator.” However, a recent trend of unilateral appointments has been observed, which the Courts have consistently struck down as being unfair. The recent case of Perkins Eastman threw light on the importance of a fair procedure of appointment of an arbitrator and avoiding either party misusing its position to drive the nomination of an arbitrator in a veiled manner. The SC in this case rejected the appointment made by the CMD of the respondent as per the agreement due to the biasness and lack of fairness associated with such manner of appointment of the arbitrator. Mandatory nature of notice for Section 11(6) petition The invocation of a valid notice is the sine qua non for exercising jurisdiction on any petition under Section 11(6). The petition can be filed only after thirty days have lapsed on issuance of a valid notice of arbitration by the claimant and there has been a failure by the respondent to comply with the same. In Arif Azim, the Court also emphasized on the importance of bringing claims within the limitation period of three years. In this case, since the cause of action arose in 2018, the claimant would have to file their notice by 2022 (one year extension for COVID). Therefore, their failure to invoke the notice within the limitation period made the claims for arbitration ex-facie barred by limitation. The notice forms the bedrock for determining whether the parties have adhered to the procedure delineated within the arbitration agreement. It is instrumental in notifying the recipient in advance of the claimant’s choice of arbitrator and would ultimately serve to be the cause of action for any section 11(6) petition. As stated in Alupro Building Systems, “Lastly, for the purposes of Section 11 (6) of the Act, without the notice under Section 21 of the Act, a party seeking reference of disputes to arbitration will be unable to demonstrate that there was a failure by one party to adhere to the procedure and accede to the request for the appointment of an arbitrator. The trigger for the Court's jurisdiction under Section 11 of the Act is such failure by one party to respond.” The notice under Section 21 serves a very definite purpose as stated in Malvika Rajnikant Mehta v. JESS Construction. It puts the recipient on notice as to the nature of the claims, it provides an opportunity to the recipient to contest the admissibility of those claims, it allows the recipient to raise issue with the appointment of an arbitrator. Lastly, the date of receipt of notice has a bearing on the commencement of the arbitration. But high courts across India have arrived at different conclusions on whether a notice is a mandatory pre-requisite to a s11 petition, including the recent case of Kakali Khasnobis. However, another question arises as to whether the Court or an arbitral tribunal can settle the question of validity of notice. In Oval Investment Pvt. Ltd. v. Indiabulls Financial Services Limited, the Court considered whether the arbitral tribunal has the power to determine whether the procedure as per section 21 has been complied with. Considering the overarching scheme of the act and the underlying principle of komeptenz-kompetenz, the validity of the notice goes to the heart of the jurisdiction of the arbitral tribunal. Jurisdictional matters are completely relegated to the tribunal in determining its own jurisdiction and it is free to do so without interference by civil courts. When the validity of the notice intersects with questions of jurisdiction of the arbitral tribunal, such questions must be left to the discretion of the arbitral tribunal. For instance, if parties are at loggerheads on whether the issues referred in the notice for arbitration are arbitrable as per law or the arbitration agreement, that question must be settled by the arbitral tribunal and not the Court. Courts as an absolute rule cannot interfere into the jurisdiction of the tribunal except in limited circumstances. Implication of a defective notice on a Section 11(6) petition In instances where a defective notice has been sent in the first place, the question begets as to whether the other party is even obligated to respond to the notice and appoint an arbitrator. Answering the question in the negative, the Punjab and Haryana High Court in G.J. Singh and Co v Haryana State Agriculture Marketing Board held that there is no obligation incumbent to act on a defective notice and accordingly appoint an arbitrator. In this case, the Court went on to hold that the party had not forfeited its right to appoint an arbitrator since there was no obligation to act on a defective notice. The notice was found to be defective on account of it missing a few important documents which were in support of the claim and hence, it was an incomplete or improper notice. In consecutive judgements by the Bombay High Court in Arohi Infrastructure and Anacon Process Control, a Section 11(6) application was held to be not maintainable for issuance of defective notice. The other ambiguity that remains in such cases is the status of the section 11(6) petition in front of the Court when a defective notice has been sent. In most cases, the claimant argues forfeiture of right of the respondent to appoint an arbitrator when they fail to cooperate with their notice. In such cases, the Supreme Court in Union of India v Premco-DKSPL(JV) held that the terms for appointment of the arbitrator must be given supremacy by the Court. Due regard must be had to the qualifications prescribed for the arbitrator by the parties in their agreement and to the procedure delineated. Unless there has been express or implied forfeiture, it cannot be held that the other party has repudiated its right to appoint the arbitrator. The repudiation of such right can only be as per the terms of the agreement and not otherwise. Restrictive ground of rejection of section 11(6) petition on defective notice Courts in practice have been known to reject a Section 11(6) petition on very limited grounds only. Courts will generally try to encourage the commencement of the arbitration so that neither party is allowed to benefit from its own wrong. Thus, in Kakali Khasnobis case, the Calcutta High Court appointed a sole arbitrator notwithstanding there was no notice invoked. The Court found that the petitioner had taken reasonable steps by invoking the arbitration clause vide a letter and that the notice is not an essential pre-requisite to a Section 11(5) petition. Additionally, courts have also been seen to appoint a sole arbitrator notwithstanding that the arbitration agreement requires the appointment of three arbitrators. This was done with the sole purpose to speedily commence the arbitration to prevent further prejudice to parties’ rights. For instance, the Bombay High Court in Siddhi Real Estate Developers v Metro Cash and Carry India Pvt Ltd, appointed a sole arbitrator of its choice when the arbitration clauses in the impugned contracts provided for the constitution of separate arbitral tribunals. The Court cited several instances where the Bombay and Delhi High Courts have appointed sole arbitrators where parties disagreed or the other party refused to cooperate with the notice. In such cases, an order to adhere to the agreed procedure could inadvertently delay the process and cause the parties to suffer. The ends of justice could be obviated where the arbitration is not allowed to commence in a timely fashion, purely because of the other party’s refusal to cooperate. Rigid vs liberal interpretation of notice A rigid interpretation of arbitral procedures may not always serve justice. While it is an integral document, it cannot be made an overtly technical process. For instance, in the UK, Courts have taken a liberal approach in focusing on the substance and not form of notices. So long as the notice sufficiently identifies the disputes to which it relates and makes clear the sender’s intention to commence arbitration, the notice would be valid. The focus is more on how a reasonable person may have construed the notice given its terms and the context within which it was written. However, failure to adhere to the requirements of the applicable law for service of notice would be tantamount to an invalid service. It is only when the agreed ‘contractual machinery’ has been improperly invoked that a Court may intervene to appoint an arbitrator. Essentially, a notice should not be interpreted in a rigid fashion, imbued with overtly technical requirements since that would complicate the arbitration process. An arbitration is favoured by parties for its simple and efficient procedures that prioritises fairness and neutrality. Therefore, notices should be construed to do substantive justice without an over-emphasis on its form. Such a broad and flexible interpretation of the notice allows for the effective commencement of arbitration in line with the objectives of the Act, 1996. Conclusion The above precedents cited reveal a general trend of Courts trying to uphold consensus and party autonomy in cases where one party to the dispute has made no attempts to adhere to the agreed procedure. Pertinently, attempts at unilateral appointments have been disfavoured by the Court due to the abuse of power exercised by the appointing party. Additionally, parties must be mindful that their notice is filed within three years of the cause of action so the claims are not time-barred. In such cases, the Court is justified in rejecting a section 11(6) petition otherwise it would subvert parties’ autonomy to choose an arbitrator of their choice. The procedures for appointment of arbitrator mentioned in the arbitration agreement are not a mere formality but are mandatory procedures binding not just parties but Courts as well. In cases where the qualification of the arbitrator has been stipulated, Courts have been found to abide by these qualifications even if the Court is appointing the arbitrator. However, the endeavour to preserve party autonomy is tempered with the need to also preserve justice by not allowing a party to take advantage of its own default. Courts have in such cases taken a flexible approach of holding a notice to be valid so long as it materially conforms to the requirements of a valid notice under Section 21. In very few instances has the Court invalidated a notice in the preliminary stage but in any such instance it has given an opportunity to parties to file a fresh notice by curing the defect. Courts must balance the interests of party autonomy and timely commencement of arbitration while exercising its jurisdiction in a section 11(6) petition. [1] Rohini Roy is a student at National Law University Odisha.

-Aditya Pandey[1] Introduction For a decade Indian courts borrowed English conflicts methodology to answer a question the Arbitration and Conciliation Act, 1996 never addresses: which law governs the arbitration agreement when the contract is silent. Disortho SAS v Meril Life Sciences Pvt Ltd was billed as the moment the Supreme Court settled that question by applying the Sulamérica three stage test and Enka as correctly stating the governing principle, subject to the areas where Indian law has since diverged. The reality is less tidy. The Court blurred distinctions between the law of the arbitration agreement and the law of the seat, between governing-law reasoning and seat-finding that the English authorities it relied upon work hard to preserve, and did so without confronting an inconvenient sequel: weeks later, England replaced the very framework it had imported with a statutory default rule pointing the opposite way. This article argues Disortho is a partial clarification bought at the price of new ambiguity. It correctly entrenches lex contractus as the default governing law of a silent arbitration agreement, displacing the looser reasoning of Mankastu, but collapses seat-finding into governing-law reasoning, extends Arif Azim v Micromax's dual gateway to Part I without explaining the hierarchy between the gateways, and treats Enka as though it remains current English law. Background of the Dispute Disortho SAS, a Colombian distributor, and Meril Life Sciences, a Gujarat manufacturer, signed an International Exclusive Distributor Agreement in 2016. Clause 16.5 stated the agreement “shall be governed by and construed in accordance with the laws of India,” with disputes “subject to the jurisdiction of courts in Gujarat.” Clause 18 referred disputes to arbitration under the Bogotá Chamber of Commerce's Arbitration and Conciliation Centre, proceedings to take place in Bogotá and the award governed by Colombian law. Disortho invoked clause 18 and, facing non-cooperation, filed a Section 11(6) petition for appointment of an arbitrator; Meril resisted, arguing clause 18 committed the parties to a Colombian-seated arbitration outside the 1996 Act's reach. The petition came before a three-judge bench of the supreme court, sitting at the intersection of the seat-venue jurisprudence and the territorial limits on Indian jurisdiction under Section 2 (2). The three-judge bench, namely Khanna CJI, Sanjay Kumar and Viswanathan JJ, held that Indian law governed the arbitration agreement, that this grounded Section 11 jurisdiction, and that Bogotá was venue, not seat. The parties then consented to conducting the arbitration in India, resolving the dispute but leaving the reasoning, not the result, for future litigants. Existing Indian Jurisprudence before Disortho Section 20 of the 1996 Act, which substantially reflects Article 20 of the UNCITRAL Model Law, does not use the term “seat” but only the word “place.” At first instance, in Bhatia International, the applicability of Part I was understood as extending to foreign-seated arbitration save in exclusionary cases; but BALCO v Kaiser Aluminium rectified this, with a five-judge bench ruling that Section 2(2) follows the territoriality principle that Part I is only applicable when the seat is located in India, and that “place” means seat once determined. Enercon v Enercon GmbH made matters more complicated. London was designated as “venue”, but the relevant contract law, the arbitration agreement law, and the rules of arbitration all indicated India. The Court treated contract law, arbitration-agreement law, and institutional rules as cumulative indicators of the seat itself, rather than as discrete inquiry into the law governing the arbitration agreement separate from seat-determination. Mankastu Impex v Airvisual unsettled this. Despite Indian governing law and New Delhi jurisdiction in the MoU, the Court held Hong Kong the place where arbitration was “administered” was the seat, reasoning that mere “place of arbitration” language requires something more before yielding to governing-law indicia. The Court examined the arbitration clause as a whole, including the reference to disputes being “administered” in Hong Kong against the broader contractual structure, rather than treating the administration language alone as decisive. This reached the opposite outcome from Enercon on materially similar facts without distinguishing it, a tension commentators have rightly flagged. Arif Azim Co Ltd v Micromax Informatics FZE distinct from the same-named limitation decision against Aptech Ltd decided weeks earlier addressed a UAE-seated clause referencing UAE law and rules, holding Part I applies only where (a) the seat is in India, or (b) Indian law governs the arbitration agreement. This framed seat and governing law as alternative gateways to Part I, not inputs into one seat-finding exercise as in Enercon, a shift Disortho inherits. By March 2025, then, Indian law held three partly reconcilable strands i.e., BALCO's territorial strand, Enercon's closest-connection strand, and Arif Azim v Micromax's dual-gateway strand. Disortho arrived asking how Sulamérica/Enka maps onto that structure. The Supreme Court’s Reasoning The Court applied the three-stage Sulamérica test: express choice, implied choice, closest connection. Finding no express choice for the arbitration agreement, it moved to implied choice, holding, following Enka, that where the arbitration agreement is part of the main contract, “the lex contractus is a strong indicator of the law governing the arbitration agreement unless there are indications to the contrary,” and that “the choice of a seat different from the lex contractus is not, by itself, enough to displace this presumption.” Sulamérica's exceptions invalidity under the contract law, or a neutral seat unconnected to either party were inapplicable: Indian law would not invalidate the clause, and Bogotá was not neutral, since Disortho was incorporated there. The Court then reasoned that the same Indian-law finding grounded supervisory jurisdiction, citing Melford Capital Partners v Digby for the proposition that law governing the arbitration agreement governs the arbitration's “associated processes,” and that vacancy-filling or removal “should normally be governed by the law applicable to the arbitration agreement itself, rather than... the procedural rules.” Yet Melford Capital itself decided only which national court had jurisdiction to hear a removal application where the arbitration clause was silent on the point, a question of curial jurisdiction, not a general rule equating the law of the arbitration agreement with the aw governing the arbitral process. Invoking the Shashoua principle that mere place of performance does not become the seat, it held Bogotá was venue only, and treated Arif Azim v Micromax's dual-gateway proposition as sufficient without an independent finding on the seat. The Comparative International Position Sulamérica established the three-stage test, but its holding actually rebutted the lex contractus presumption: Brazilian law would have rendered part of the arbitration agreement ineffective, and London, the seat, had no other connection to either party, so seat law governed instead. Sulamérica is a case about when the presumption breaks down, not a case for the presumption, a nuance Disortho invokes selectively. Enka reformulated rather than displaced Sulamérica: an express choice of law for the main contract generally extends by implication to the arbitration agreement unless the seat or other factors indicate otherwise; absent any choice for the main contract, the law of the seat governs as the closest connection. That methodology no longer represents English law. Section 6A of the Arbitration Act 2025, in force from 1 August 2025, provides that absent an express choice of law for the arbitration agreement itself, the governing law is the law of the seat, an express choice for the main contract no longer carries over by implication. The Law Commission's stated reason was that Enka's implied-choice doctrine generated costly satellite litigation and let foreign law govern London-seated arbitration agreements against the seat's own institutional interest in predictability. Royal Assent came on 24 February 2025, weeks before Disortho was decided on 18 March 2025, without reference to the impending change not a fault in the Court, but a fact diminishing Enka's force as “the” comparative position, since the critique behind its reversal applies equally to the position Disortho now entrenches in India. Singapore’s courts likewise treat the law of the seat as the governing law of the arbitration agreement absent an express choice, applying a closest connection analysis that in practice defaults to the seat. France reaches a similar practical result by a different route: French courts do not apply a conflict of laws choice at all, instead recognising the arbitration agreement’s substantive validity directly under a transnational or “anational” rule independent of any national law, seat included. The two are are not the same mechanism, Singapore’s is a genuine seat law default within a choice of law framework, while France’s dispenses with choice of law reasoning altogether but both reject Enka ‘implied choice from the main contract approach. Enka. Even pre-reversal, was accordingly an outlier rather than part of a converging consensus. Critical Evaluation Conflation of categories: This article uses “law governing the arbitration agreement” for question of the agreement’s validity, scope and interpretation, and “curial law” for the law governing the arbitral process and supervisory jurisdiction; the two are kept distinct throughout. Disortho uses “lex arbitri” to mean both the law governing the arbitration agreement's validity and the law governing supervisory jurisdiction over the arbitral process not synonyms even under Enka. Melford Capital, cited for collapsing arbitrator-removal questions into the law of the arbitration agreement, actually concerns which court has jurisdiction where the contractual mechanism is silent, not a general equivalence between the two laws. Holding that supervisory functions should “normally” follow the law of the arbitration agreement rather than seat-procedural rules converts a seat-governed question into a lex-contractus-governed one. The same slippage drives the seat-finding itself: having fixed Indian law as governing the arbitration agreement, the Court pre-empted the seat inquiry by making jurisdiction follow that finding, inverting BALCO's territoriality principle, under which Section 2(2) yields only to an affirmative seat-finding. Enercon avoided this by treating governing-law indicators as evidence for a seat-finding; Disortho instead follows Arif Azim v Micromax's alternative-gateway framing without addressing the conflict between gateways, resolving it with governing-law reasoning rather than the seat/venue indicia BGS SGS Soma identifies, a case whose holding concerned distinguishing "venue" from "seat" and applying the Shashoua presumption, not a general rule that seat-specific inquiry must precede every governing-law analysis. Treating that priority as settled, rather than arguing for it, is itself part of the conflation this article criticises. Consistency with Mankastu and Arif Azim, and fidelity to Sulamérica/Enka: Mankastu holds that mere "place of arbitration" or "administered in" language is weak evidence of seat, requiring something more before it yields to governing-law indicia. Disortho holds the opposite on the evidentiary question that actually matters here: the governing-law clause operates as a presumption strong enough to displace venue language absent contrary evidence. The two cases therefore conflict specifically on how much evidentiary weight venue/administration language carries against a governing-law clause and not on the seat/venue distinction as such and it is that narrower conflict, not a general inconsistency, that cannot be reconciled. One cannot be certain if named institutional seat rules (BGS SGS Soma) or the governing law clause (Disortho) would determine the seat if there is a conflict between the two. The case is similar to the decision made in Arif Azim v Micromax although it goes beyond it: lex contractus is used as the default rule rather than an option for gateways whose selection coincides with the chosen governing law of the contract. The court follows the formality of Sulamérica, but not its essence. Uncertainty created: Parties who choose to have a foreign institutional seat but include an Indian governing law clause for their contract, often found in distribution contracts, cannot take it for granted that their choice of a foreign seat will be honored. This is because the issue concerning the precedence of lex contractus presumption over the BGS SGS Soma'spresumption of the seat continues to remain unanswered, because the facts in Disortho presented this exact case scenario without providing any solution to it; and the boundary between the law governing the arbitration agreement and the curial law is fluid enough for lower courts to extend Disortho’s reasoning into areas properly governed by the seat. This is compounded by Arif Azim's own statement that the closest-connection test is no longer a viable criterion for seat determination once the Shashoua presumption applies, a proposition Disortho does not engage with, and one that sits uneasily with treating Enercon, Arif Azim, and Disortho as points on a single doctrinal trajectory. Proposed Doctrinal Framework: There are three ways that the presumption of Disortho can be refined in order to avoid these conflations. First, courts should apply seat-specific criteria under BGS SGS Soma/Shashoua before turning to Sulamérica/Enka-style governing-law analysis not because BGS SGS Soma itself compels this sequence, but because seat determination is logically prior: Section 2(2) jurisdiction turns on the seat, and governing-law indicators should inform that finding rather than substitute for it, as Enercon correctly treated them. Second, the notion of “lex arbitri” needs to be clarified, meaning procedural law of the seat in distinction from the law of the formation and validity of the arbitration agreement even in case of their coincidence; supervisory powers are expected to follow the curial law of the seat unless there is clear contrary agreement. Third, one should discuss explicitly the new Arbitration Act 2025's rejection of Enka and not implicitly rely on the pre-reform position since BALCO's territoriality approach is closer to English law after 2025. Conclusion: Disortho provides a solution to the question it posed about whether lex contractus presumptively applies to a silent arbitration agreement, which is helpful because it provides a rule that India was lacking before. The cost of this is that Disortho makes a series of unwarranted conflations between the law of the arbitration agreement and the curial law of the seat, between governing law analysis and seat analysis, and between Enka as decided in 2020 and current English law. This decision is not a doctrinal catastrophe as some commentators believe, but rather it is not even a straightforward transplant as its conclusion would indicate. Instead, Disortho clears up one question while creating three more for future courts to answer. [1] Aditya Pandey, Fifth year Law student at NLUO.

- Gaurav Rai [1] & Avni Shrivastava [2] Part I - Evolution of the Law Link to PDF for Part I: Evolution of the Law Part I of the paper traces the doctrinal evolution of Indian arbitration law on impleading non‑signatories, beginning with Chloro Controls, the judgment that first recognised composite transactions as a basis for binding entities who had not formally signed the arbitration agreement. The Supreme Court observed that multiple agreements forming part of a single commercial arrangement may be “so interdependent on each other that they could not separate or perform without reliance on the other,” thereby justifying composite reference. This principle laid the foundation for later developments in the Group of Companies doctrine and the broader inquiry into implied consent. The Article then follows the jurisprudential trajectory through Cheran Properties, MTNL v. Canara Bank, and Ameet Lalchand Shah, examining how the courts expanded the understanding of intention and participation. These decisions demonstrate that consent may be inferred from conduct, relationships, performance, and participation in a unified commercial venture. Ameet Lalchand was particularly significant in recognising that multiple agreements, including one without an arbitration clause, may nevertheless be referred to a single arbitration where they form part of a “single commercial project.” The discussion then turns to ONGC v. Discovery Enterprises, which consolidated the factors relevant to determining whether a non-signatory is a veritable party, The Article then turns to Cox & Kings II as the critical point of doctrinal consolidation. The authors examine how the Constitution Bench reasserted consent as the cornerstone of arbitration, clarifying that a non-signatory cannot be compelled to arbitrate without consent, while recognising that consent may be express, implied, or inferred from conduct and surrounding circumstances. The authors clarify how it did not overrule Chloro Controls in its entirety; rather, it clarified that “without prior consent” refers to the absence of prior formal consent, since consent may be inferred from conduct and surrounding circumstances. Finally, the Article examines the shift in determining who is a “veritable party”: from the greater role accorded to referral courts under Chloro Controls, to the present position under Ajay Madhusudan and ASF Buildtech, where the substantive determination is principally left to the arbitral tribunal under Section 16, with referral courts undertaking only a limited prima facie examination. Part I ultimately demonstrates that composite transactions remain a distinct basis for impleadment, independent of the Group of Companies doctrine, and sets the stage for examining how these principles operate in multi‑party, single‑project disputes. Part II - Single Project and Multiple Parties Link to PDF for Part II : Single Project and Multiple Parties Part II is based on the premise that complex infrastructure and EPC projects increasingly involve multiple interconnected contracts executed by different parties, creating disputes that extend beyond the formal signatories to a single agreement. This paper examines the tension between the consent-based foundation of arbitration and the practical need to resolve disputes arising from a single commercial project through a consolidated proceeding. This problem is particularly evident in the recent IIT Mandi and IIM Jammu cases, where the universities took different views regarding their role as an ultimate beneficiary of construction projects and whether the same qualified as ground for impleadment in the arbitrations between the Public Works Department (as a tenderer) and the private contractors. Building upon Part I of the series, the paper then critically examines these cases on various aspects, inter alia, the difficulties created by a strict application of consent principles where the ultimate beneficiary of a project is not a signatory to the underlying contract. While the IIT Mandi and IIM Jammu decisions emphasise that mere status as an ultimate beneficiary does not establish consent to arbitrate, the authors argue that a rigid application of the consent requirement may overlook the broader principles recognised in Cox & Kings II, particularly commonality of subject matter, composite transactions and the interconnected performance of multiple agreements. In support of the criticism, the paper relies on the longstanding principle of avoiding multiplicity of arbitral proceedings. The authors argue that avoiding fragmented adjudication is integral to the objectives of efficient arbitration examines the jurisprudence favouring composite references and a single arbitral tribunal, including P.R. Shah, KGPS Mechanical, Ganpati Technology and Gammon India. While the authors agree that consent must remain the primary basis for impleadment, they contend that it should not operate as an inflexible rule where fragmented proceedings may result in incomplete adjudication, inconsistent findings, and multiplicity of proceedings. To address this gap, the authors propose two limited exceptions. First, they advance a “Single Project Exception”, under which parties substantially connected with a single, interdependent commercial project may, in appropriate circumstances, be impleaded notwithstanding the absence of conventional indicia of consent. Second, they propose importing the “proper party” doctrine under Order I Rule 10 of the CPC into arbitration, particularly where the presence of an ultimate beneficiary would enable the tribunal to completely and effectively adjudicate the dispute. The paper ultimately argues for a calibrated approach: preserve consent as the cornerstone of arbitration while permitting narrowly defined exceptions grounded in commercial reality, effective adjudication, and the avoidance of multiplicity of proceedings. It concludes that such an approach represents a principled next step in the evolution of Indian arbitration law towards greater efficiency and responsiveness to complex multi-party, multi-agreement, commercial projects. [1] Gaurav Rai is an Independent Advocate and Arbitration Consultant based in Delhi. He can be reached at gaurav@thearbitrationconsultant.in [2] Avni Shrivastava is a third-year B.A. LL.B. (Hons.) student at the National Law University Odisha. She is also a member of the ADR Board, NLUO. She can be reached at avnishrivastava25@gmail.com.

Anvita Sharma & Vidhi Gala[1] Introduction In Nagreeeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. (17 April 2026) (“Nagreeeka/Nagreeeka Indcon”), the Supreme Court held that usage of the word ‘can’ in a dispute resolution clause does not constitute a binding arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996 (“the act”). The Court is of the view that such language is a mere indication of possibility of arbitration and does not disclose the clear determination and obligation necessary to establish arbitral consent. The dispute arose from a commercial contract containing a dispute resolution clause providing that disputes “can be settled by arbitration”. Upon invocation of this clause, Cargo Logistics resisted reference to arbitration on the ground that the clause was not mandatory or obligatory. The Bombay High Court declined to appoint an arbitrator under Section 11, and this view was later affirmed by the Supreme Court. The Court held that the clauses which merely contemplate arbitration as a matter of future agreement, rather than present obligation, fall short of constituting enforceable arbitration agreements, as they require fresh consensus between the parties at the stage of dispute. This post analyses the decision on three aspects. Firstly, it examines the Court’s insistence on textual precision as determinative of arbitral consent, particularly its distinction between permissive and mandatory language. Secondly, it situates the judgment within India’s pro-arbitration jurisprudence, arguing that it reflects a shift from facilitation to threshold scrutiny of consent. Thirdly, it evaluates the broader implications to commercial contracting, including the extent to which strict reliance on drafting formalism may influence litigation strategy and access to arbitration. Background While Section 7 of the act does not prescribe any formal requirements for the framing of an arbitration agreement, jurisprudence[2] suggests that judicial interpretation has consistently elevated language as the decisive indicator of arbitral consent. The author suggests that the enquiry is therefore not directed at reconstructing commercial expectation, but determining whether the clause, as drafted, evidences a concluded intention to arbitrate. The Apex Court in Nagreeeka Indcon reinforces this position by adopting a strictly textual approach. The Court treats the arbitration clause as a self-contained expression of consent and declines to read into it any broader commercial understanding between the parties. The authors contend that this approach reflects a conscious preference for certainty over flexibility. By anchoring the analysis in the ordinary meaning of the words used, the Court limits the scope for interpretative interpretation at the referral stage. This is consistent with BGM & M-RPL-JMCT (JV) v. Eastern Coalfields Ltd.[3] and Jagdish Chander v. Ramesh Chander [4]where clauses requiring further agreement were held insufficient to constitute enforceable arbitration agreements. The underlying principle is clear, that arbitration cannot be imposed through implication, it must be demonstrable from the clause itself. At the same time, the decision marks a departure from the more pragmatic approach adopted in Enercon (India) v. Enercon GmbH,,[5] where the Court was willing to preserve arbitral intent despite drafting delicences. In Nagreeeka, such corrective interpretation is expressly rejected. It is pertinent to note that even in contextual indicators such as the heading of the clause, are treated as insufficient to cure indeterminacy in the operative language. The judgment in paragraph no. 9.6 also recalibrates the pro-arbitration principle articulated in the landmark case of Vidya Drolia v. Durga Trading Corporation,[6]However, Vidya encouraged courts to lean in favour of arbitration in cases of interpretative doubt, Nagreeeka confines this presumption to situations where an arbitration agreement is prima facie established. While if the existence of such agreement is itself in question, the Court adopts a more restrained posture. The authors argue that this shift has broader implications. Firstly, by prioritising textual certainty, the court effectively raises the threshold for establishing arbitral consent, thereby reducing the scope for judicial facilitation at the Section 11 stage. Secondly, while this might strengthen doctrinal clarity, it simultaneously narrows the interpretive space within which courts can accommodate imperfect drafting, which is an issue of particular relevance in standard-form commercial contracts. Road Ahead: Pro Arbitration to Pro Consent In the recent years, India has adopted a pro-arbitration approach over lengthy and time consuming litigation. Scholars[7]have praised this shift towards greater judicial restraint especially at key stages including referral to arbitration, conduct of proceedings, and post-award scrutiny. The authors critically question whether this judgment is truly ‘pro’ arbitration or forms another litigation hurdle for parties. Firstly, the implications for foreign clientele are significant. In cross-border transactions, arbitration clauses which are typically drawn from institutional model clauses, such as those of International Chamber of Commerce (ICC) or the Singapore International Arbitration Centre (SIAC). These model clauses employ unequivocal language, for instance, providing that disputes “shall be finally settled by arbitration”. However, scholars[8] suggest that in commercial practice, such clauses are frequently adapted or incorporated into broader contractual frameworks, particularly in multi-tier dispute resolution clauses or industry standard agreements. Gary Born[9] notes that arbitration agreements are often embedded within complex contractual structures and may vary in formulation depending on commercial context, giving rise to disputes over their binding nature. Similarly, Redfern and Hunter[10] observe that poorly drafted or ambiguous clauses often the result of modification or hybrid drafting are a recurring source of jurisdictional challenges. This concern is also reflected in judicial practice. In Fiona Trust & Holding Corp v. Privalov,[11] the House of Lords adopted a commercially sensible approach to uphold arbitration agreements despite drafting imperfections. Secondly, from a public policy perspective, the judgment reaffirms consent as the cornerstone of arbitration, consistent with international norms. Nagreeeka’s text-centric approach raises concerns about India’s pro arbitration approach. The UNCITRAL Model Law which underpins the act, adopts a pro- enforcement bias, encouraging courts to uphold arbitration agreements where reasonably possible. Thirdly, an overly stringent approach may have spill over effects on enforcement of foreign arbitral awards in India. Under the New York Convention, to which India is a signatory, courts are required to recognise and enforce foreign awards subject to limited exceptions, including the absence of a valid arbitration agreement and violation of public policy. A heightened insistence on linguistic precision at the stage of determining arbitral consent could expand the scope of challenges under these grounds. As Gary Born[12] notes, enforcement regimes depend fundamentally on judicial restraint and consistency in recognising arbitration agreements across jurisdictions. If Indian courts subject arbitration clauses to stricter scrutiny than that applied at the seat of arbitration, it may lead to increased threshold objections and enforcement delays, even where the award is otherwise valid. Conclusion The authors contend that the approach adopted in Nagreeeka reflects a shift that may sit uneasily with India’s broader pro arbitration trajectory. While reaffirming the centrality of consent, an overly stringent reliance on textual precision risks undermining recent efforts aimed at enhancing ease of doing business and strengthening India’s position as an arbitration friendly jurisdiction. While the authors have laid down their views, the current position of under Indian Law remains firmly textual. The 2026 decision of Supreme Court in Nagreeka states that’s permissive language being can, may cannot be rendered binding by reference to commercial context, transactional intent, or the general judicial preference for arbitration; the clause's own wording remains dispositive. [1] Anvita Sharma is a final year student at Jindal Global Law School and Vidhi Gala is an associate at Dhruve Liladhar & Co. [2] https://repository.nls.ac.in/cgi/viewcontent.cgi?article=1095&context=nlsblr [3] BGM & M-RPL-JMCT (JV) v. Eastern Coalfields Ltd., 2024 SCC OnLine Cal 486 . [4] Jagdish Chander v. Ramesh Chander, (2007) 5 SCC 719. [5] Enercon (India) Ltd. v. Enercon Gmbh, (2014) 5 SCC 1. [6] Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1. [7] Rajat Singla, “Arbitration Environment in India- From the User’s Perspective” (Australian Disputes Centre, 2021) https://disputescentre.com.au/wp-content/uploads/2021/10/ARBITRATION-ENVIRONMENT-IN-INDIA-FROM-THE-USERS-PERSPECTIVE-Final.pdf [8]Editor. “‘Consent’ in Arbitration Agreement — Substance Prevails Over Form: Crystallisation of Indian Jurisprudence.” SCC Times, 18 Sept. 2025, https://www.scconline.com/blog/post/2025/09/18/consent-arbitration-agreement-indian-jurisprudence [9]Born, Gary B. “International Commercial Arbitration.” WIPO Knowledge Repository, https://tind.wipo.int/record/44313 Accessed 2 July 2026. [10]Nigel, Blackaby. REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION. https://www.international-arbitration-attorney.com/wp-content/uploads/Prelim-Pages-from-Redfern-and-Hunter-5th-Edn.pdf [11] [2007] UKHL 40. [12] Gary Born. International Law In American Courts. https://www.wolterskluwer.com/en/solutions/kluwerarbitration/born

By- Anchal Kanthed[1] The judgment of the Cox and Kings Ltd. v. SAP India Pvt. Ltd.,[2] settled around 30 years of doctrinal confusion regarding the Group of Companies Doctrine (hereinafter “GOCD”) by affirming it as a consent-based principle enshrined in Sections 2(1)(h) and 7 of the Arbitration and Conciliation Act, 1996 (hereinafter “A&C Act”). The judgment adjudged the “claiming through or under” in Chloro Controls[3] as erroneous, confirmed that non-signatories can be parties in their own right and established a five-factor test for invocation of arbitration. Though this is a remarkable judgment, it has left open two loopholes. First, at the Section 11 stage, directing courts to conduct only a prima facie review of the non-signatory party, leaving the full determination at the behest of the tribunal, making it a double-adjudication, which increases procedural costs. Secondly, regarding Section 9, imposing a condition on the non-signatory for a prior tribunal determination for an interim relief. The paradox is that a non-signatory cannot invoke Section 9 until the tribunal has ruled, as Section 9(3) bars the court. This article examines these loopholes and argues that both can be resolved through purposive judicial interpretation, without any legislative amendment. Introduction The basis of arbitration is consent between the parties. However, it becomes complicated when questions like whose consent and how to identify consent arise. The law answers these questions through the doctrine of GOCD, which means that when a non-signatory party has participated so substantially in the negotiation, performance or termination of a contract that circumstances reveal a mutual intention to be bound, then that party can be drawn into the arbitration even without signing the agreement. The judgment in Cox and Kings Ltd. v. SAP India Pvt. Ltd.[4] [hereinafter “Cox & Kings II”] resolved long-standing disputes on the validity of the doctrine, corrected errors from Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc.[5] (hereinafter “Chloro Controls”) and provided a clear framework for the application of the doctrine. But the judgments left two fault lines open, one at the Section 11 referral stage and second around Section 9 interim relief, which collectively undermine the very purpose of the doctrine of GOCD. I. The Framework: What Cox & Kings II Settled Non-signatories were not included in arbitration before Chloro Controls. The cases like Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya[6] and Indowind Energy Ltd. v. Wescare (I) Ltd.[7] held that a written agreement was required to initiate arbitration proceedings/ arbitration was possible amongst the signatories of the agreement, as was mentioned in Section 7. Chloro Controls changed this position by introducing a phrase, “any person claiming through or under” as given under Section 45 of the A&C Act, including non-signatories to the agreement in a derivative capacity. But the judgment created a doctrinal error by treating this derivative capacity phrase as the very basis for the doctrine of GOCD itself. It was Cox & Kings II that later reversed this position, holding that a non-signatory joined through GOCD is bound as a principal party in its own right, by its own consent and not by derivation. Cox & Kings II corrected this error by holding that a conjoint reading of Sections 2(1)(h) and 7 of the A&C Act accommodates non-signatories as parties without requiring their signatures. A written agreement under Section 7(4)(b) ensures that there is a record of consent, but it does not limit the forms consent may take. Consent to arbitrate can be gathered from conduct, participation and surrounding circumstances. Moreover, the Court also listed five factors, citing ONGC v. Discovery Enterprises Pvt. Ltd.,[8] to determine consent: (i) mutual intention between the parties; (ii) the relation between signatory and non-signatory; (iii) commonality of the subject matter; (iv) composite nature of the transaction; and (v) performance of the contract. Mere membership of a corporate group was not enough on its own. The Court held that the concept of ‘single economic unit’ could not be used on its own to justify pulling a non-signatory into arbitration under GOCD. Moreover, the Court also explained that Canara Bank[9] had not relied solely on that reasoning and to the extent it had been interpreted otherwise. This interpretation was expressly overruled. The Court made a differentiation between the doctrine of GOCD and veil piercing, while the former is consent-based and preserves the separateness of the parties, the latter is equity based that overrides it. Now the doctrine has a principle-backed foundation that it previously lacked. The chart below places the doctrine of GOCD post Cox & Kings II within a broader spectrum of doctrines that extend arbitration to non-signatories, illustrating the focus of the judgment on consent as an anchor and its rejection of veil-piercing as a basis, representing a non-technical/principled position. Chart 1: Doctrinal Spectrum from fully consensual (agency) to fully non-consensual (veil piercing). GOCD sits at the midpoint by preserving corporate identity and finding consent through conduct. Cox and Kings II confirmed that it cannot migrate rightwards into the territory of veil-piercing. II. Section 11 Problem: Prima Facie Review And Double Adjudication If the agreed procedure to appoint arbitrators fails, Section 11 of the A&C Act empowers the courts to appoint arbitrators. The scope of examination at this stage has been narrowed down through judgments like Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies Pvt. Ltd.[10] and NTPC v. SPML Infra Ltd.[11] The Supreme Court consistently held that the examination is limited to only whether a valid arbitration agreement exists, on a prima facie basis and the rest of everything is examined by the tribunal under the kompetenz-kompetenz principle under Section 16 of the A&C Act. Cox and Kings II applied this to the doctrine of GOCD and held that the question of whether a non-signatory can be impleaded is to be determined by the tribunal and not the referral court. At the Section 11 stage, the court must only determine that the non-signatory is not a complete stranger to the transaction. This understating unknowingly creates a double-layer procedure that Cox and Kings II did not fully acknowledge. This is because when either of the parties seeks to add a non-signatory at Section 11 stage, the court makes a prima faciefinding and constitutes a tribunal based on the agreement between the signatory parties. The non-signatory is now involved in the arbitration, but with an unresolved status. Then, before any substantial hearing, the tribunal must take up the joinder question as a preliminary issue, which requires both signatory parties to brief the facts about the involvement of the non-signatory. If tribunal rejects the joinder, the non-signatory question is litigated twice and if it accepts the joinder, the preliminary hearing is an additional cost without any benefit. Either way, the outcome results in more litigation than necessary, defeating the purpose of the doctrine of GOCD. The chart depicted below explains this double-adjudication loop with a proposed solution to this problem. Chart 2, which highlights the double-adjudication loop, indicates that two-stage litigation occurs regardless of the tribunal’s prima facie finding on joinder. The proposed solution is that a prima facie review under Section 11 creates a baseline for the tribunal that can be built upon, rather than a restart. The Bombay HC in Cardinal Energy and Infra Structure Pvt. Ltd. v. Subramanya Construction and Development Co. Ltd.,[12] held that a tribunal may implead a non-signatory even without a prior court order, offering some flexibility. However, it does not address the fundamental question of the evidentiary threshold at Section 11 stage. In author’s view, a better approach is a ‘structured prima facie’ review. Rather than just answering whether arbitration agreement exists or not, the Section 11 court should also assess whether at least two of the five factors to determine mutual consent exist, specifically, whether there is a direct relationship between signatory & non-signatory and whether the subject matter of the dispute is common to both. This becomes consistent with J. Narasimha’s concurring observations in Cox & Kings II that existence of arbitration agreement and identification of parties to the agreement are “inextricably connected.”[13] Thus, logically, if parties are inextricably connected to the existence of agreement, the Court’s prima facie review cannot leave the question of party-identification untouched. III. Section 9 Paradox: Interim Relief and the Frozen Window Cox & Kings II held that a non-signatory, found to be a party by the tribunal, may seek an interim relief under Section 9 of the A&C Act. This observation is based on the assumption that there will be a prior tribunal determination. The reason was to fix the anomaly created by the ‘claiming through or under’ framework under Chloro Controls where a non-signatory could be referred to arbitration under Sections 8 or 45, but could not access Section 9, as it applied only to the “parties”. By re-categorising the non-signatory as a party in its own right under Section 2(1)(h), the Court made Section 9 available to the non-signatory. However, the language created a new and arguably worse problem. Section 9 is designed to provide interim protection of assets and subject matter during the period of pre-constitution of an arbitral tribunal because at this stage, the risk of dissipation is at its highest. The utility of this provision is undermined if a party is required to wait for the constitution of tribunal and to decide the issue of jurisdictional competence before being entitled to invoke Section 9 relief, since by that stage the very window of protection that the provision contemplates has already lapsed. This difficulty increases due to the fact that Section 9(3) bars the jurisdiction of the Court to entertain a Section 9 application once the tribunal has been constituted except the relief under Section 17 would be rendered inefficacious. The result is a jurisdiction paradox: the determination of party status is condition precedent to invocation of Section 9 by non-signatory, which can only render post-constitution of tribunal by which time Section 9(3) has already divested the Court of jurisdiction necessary to grant such relief. The non-signatory, thus, is trapped in an irresolvable procedural loop, wherein the determination is required invoking of Section 9 jurisdiction simultaneously operating to extinguish it. This is illustrated below: Stage Position of non-signatory Pre-tribunal Since, the party status is not determined, it cannot seek Section 9 relief. Post-constitution of tribunal Tribunal takes up preliminary issue of joinder Tribunal holds the non-signatory as a party Theoretically, Section 9 relief can be sought but it is barred by Section 9(3) Result Procedural limbo during a most critical stage A partial solution to this problem is Section 17, wherein the tribunal can order interim protection after finding the non-signatory to be a party and such orders are enforceable as court decrees under Section 17(2). But the issue is: first, Section 17 does not cover the pre-tribunal window and second, since post Arbitration and Conciliation (Amendment) Act, 2015, orders under Section 17 are in parity with orders under Section 9,[14] a tribunal’s jurisdiction under Section 17 extends only to parties to the arbitration agreement, so relief against non-signatory third parties, such as financial institutions, may still require recourse to Section 9. Moreover, Emergency arbitration, as upheld in Amazon.com NV Investment Holdings LLC v. Future Retail Limited,[15]provides another solution, but the problem is that it applies only in institutional arbitrations with emergency procedure provisions. In the author’s view, Cox & Kings II held that Section 2(1)(h) includes non-signatories as parties. Moreover, Section 11 court makes a prima facie determination of the party status of a non-signatory. Thus, a non-signatory who has received a prima facie recognition of party-status from the Section 11 court has, in effect, been provisionally identified as a party by a court. Now, there is no reason why that provisional recognition should not be sufficient to satisfy the “party” requirement under Section 9 during the pre-tribunal constitution. The conditioning language of the judgment should be read to establish the party-status and not as a jurisdictional bar to access Section 9 for interim relief. Conclusion Cox & Kings II is a landmark judgment that provided the doctrine of GOCD the statutory recognition it had always required. The five-factor test, the rejection of veil-piercing as a basis for invoking the doctrine of GOCD and the correction of erroneous reliance on “claiming through or under” in Chloro Controls, these are durable contributions to arbitration jurisprudence. However, the judgment left two structural loopholes that, in combination, jeopardise the purpose of the doctrine. Section 11 gap produces double adjudication on non-signatory joinder and Section 9 gap deprives non-signatories of interim protection when they need it most. This article argues that both can be addressed without legislative amendment through a structured prima facie review at Section 11 and a purposive reading of Section 2(1)(h) for Section 9. This would restore the doctrinal coherence that Cox & Kings II sought to achieve. Until a subsequent judgment fills these gaps, contracting parties would do well to name all intended arbitration participants as signatories from the outset, because the doctrine of GOCD, for all its post-Cox & Kings II clarity, still leaves non-signatories requiring recognition from the court without the procedural key to make use of it. [1] Advocate. [2] Cox and Kings Ltd. v. SAP India Pvt. Ltd., (2023) INSC 1051. [3] Chloro Controls India (P) Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641. [4] Cox and Kings Ltd. v. SAP India Pvt. Ltd., (2023) INSC 1051. [5] Chloro Controls India (P) Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641. [6] Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya, (2003) 5 SCC 531. [7] Indowind Energy Ltd. v. Wescare (I) Ltd., (2010) 5 SCC 306. [8] ONGC v. Discovery Enterprises Pvt. Ltd., (2022) 8 SCC 42. [9] MTNL v. Canara Bank, (2020) 12 SCC 767. [10] Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies Pvt. Ltd., (2021) 7 SCC 657. [11] NTPC v. SPML Infra Ltd., (2023) 9 SCC 385. [12] Cardinal Energy and Infra Structure Pvt. Ltd. v. Subramanya Construction and Development Co. Ltd., MANU/MH/2164/2024 [13] Cox and Kings Ltd. v. SAP India Pvt. Ltd., (2023) INSC 1051. The relevant extract from J. Narasimha’s concurring opinion is quoted as under: “15(iv). ‘Party’ is defined in Section 2(1)(h) as “a party to an arbitration agreement”. The determination of the arbitration agreement and its parties are inextricably connected with one another, their existence is based on the written agreement.” (emphasis supplied) [14] Amazon.com NV Investment Holdings LLC v. Future Retail Limited, (2022) 1 SCC 209. [15] Amazon.com NV Investment Holdings LLC v. Future Retail Limited, (2022) 1 SCC 209.

- Qazi Ahmad Masood[1] 1. Introduction The Supreme Court in Nagaraj V. Mylandla v. PI Opportunities Fund reframes the enforcement inquiry under Section 48 of the Arbitration and Conciliation Act, 1996 (Act) by posing a preliminary threshold question : Whether a party can re-open, matters which have been definitively decided at the seat? The case thereby shifts the focus on the extent of the public policy to the issue of whether it can be invoked. The Court restricts the application of Section 48 to truly independent objections, by introducing transnational issue estoppel, which prevents Section 48 of the Act from being used to re-litigate issues. This article argues that the decision reshapes the operation of Section 48 not by narrowing public policy in substance, but by restricting how it may be invoked through transnational issue estoppel. To establish this, the article first examines the existing Section 48 framework developed in Renusagar, Shri Lal Mahal, and Vijay Karia, before tracing the emergence of transnational issue estoppel through Indian and comparative jurisprudence, particularly Republic of India v. Deutsche Telekom AG. It then analyses how the Supreme Court applies this doctrine across objections relating to buy-back, election of remedies, fraud, and public policy. The article ultimately evaluates whether this approach strengthens finality in foreign award enforcement without unduly limiting legitimate domestic public-policy review. 2. The real architecture: the factual and contractual architecture of SASHA. The dispute between the investors and the promoters can be viewed as the failure of a carefully structured exit architecture embedded in )the Share Acquisition and Shareholders Agreement (SASHA). The agreement was a time-constrained commitment to reach a Qualified Initial Public Offering (QIPO), otherwise a structured exit waterfall would be implemented. The controversy thus revolves around whether the remedies were cumulative, alternative or contingent. It was this architecture that failed that resulted in the arbitration: none of the exit routes materialised, triggering the effects of the material breach. The Court considered the SASHA a commercial framework, requiring a coherent reading instead of formalistic interpretation that would have treated the strategic sale, buy-back implications, and damages provisions as isolated remedies, thereby allowing the award-debtors to argue that the tribunal had created legally inconsistent or impermissible reliefs under Indian law The reason is that the strategic sale was seen by the Court as a contractual enforcement tool that only becomes effective in the event of the default of basic contract, the Court placed it in the risk-allocation context agreed upon by the parties. This prevented the relief being redefined as an externally imposed solution, and made it remain an internal element of the negotiated exit regime, which strengthened the importance of contractual design in transactions between investors and other investors. 3. The history of Transnational Issue Estoppel Transnational issue estoppel is based on the rule that issues that have been conclusively decided in the seat can't be raised again during the enforcement phase just under a different legal name. The doctrine, however, remains significant in international arbitration because it preserves the separation of curial and enforcement review, and permits enforcement courts to serve as essentially appellate bodies with independent and public-policy objections. The concept of transnational issue estoppel was further settled in Republic of India v. Deutsche Telekom AG, where the Singapore Court of Appeal acknowledged transnational issue estoppel in arbitration whilst introducing a very limited exception for concerns of independent enforcement-state public policy. The importance of the distinction was that objections raised did not simply reopen questions decided in the seats, but were raised on their own under the domestic public policy. The principles of this approach were evident in Cruz City 1 Mauritius Holdings v. Unitech Limited, a case where the Delhi High Court refused to allow enforcement-stage relitigation. Nagaraj V. Mylandla, however, expands upon this, adding the doctrine of transnational issue estoppel to the framework of Section 48 itself, and making a public policy objection depend upon whether the objection already had been finally resolved at the seat. 4. Section 48 of the Act and public policy and the slit-gateway to deny a foreign award. The enforcement of foreign awards under Part II of the Arbitration and Conciliation Act, 1996 is governed by a narrow framework under Section 48, consistent with India’s obligations under the New York Convention. Since Renusagar Power Co. Ltd. v. General Electric Co. through Shri Lal Mahal Ltd. v. Progetto Grano Spa to Vijay Karia v. Prysmian Cavi E Sistemi SRL the Supreme Court has repeatedly limited the meaning of the term public policy in relation to foreign awards, contrasting it with what is meant by the larger standard under Section 34 of the Act. The point has been that enforcement courts are not to review on the merits core legal principles are not to be understood as to non-compliance with statutes or even incorrect interpretation. The present judgment builds upon this framework by introducing transnational issue estoppel as a threshold restraint on the invocation of Section 48 itself. With transnational issue estoppel, the Court denies parties the opportunity to repackage an already resolved issue, like the interpretation of a contract or the design of remedies, as a new public-policy infraction. It limits the ability of the argument of public policy to be invoked. The section 48 is now a residual safeguard, rather than a disciplined threshold, so that it cannot be used as a camouflaged appellate process against foreign arbitral awards. 5. Interaction of Estoppel and Public Policy The analytical focus of the judgment is the application of transnational issue estoppel to bar across multiple objections each of which was designed to look like a separate statutory infraction but which, in fact, was a repetition of issues already adjudged at the seat. On the buy-back argument the attempt was to recast the economic impact of the award, payment of damages accompanied by surrender of shares, as a company law prohibited buy-back. The buy-back objection had already been substantially examined in the Singapore curial proceedings, where the award-debtors challenged the remedial structure of the award, including the strategic sale mechanism and surrender of shares, as being legally impermissible. The Singapore court rejected those objections and upheld the award’s characterization of the remedies, following which the Supreme Court held that Section 48 could not be used to reopen the same issues under the language of Indian public policy. The invocation of public policy was thereby revealed as a relabelling of an issue already decided, and not a new question barred by estopped. A similar objection was raised under the Specific Relief Act, 1963, where the award-debtors argued that the strategic sale mechanism amounted to impermissible specific performance despite the grant of damages. The Court rejected this by treating strategic sale as a contingent enforcement mechanism, not an independent decree of specific performance. The award granted damages in the first place and strategic sale as an enforcement tool was only incidental. The difference saved the remedial logic of the award and ensured that it was beyond the public-policy objection. When this construction was maintained at the seat the reconsideration of it in India under Section 48 would destroy the distinction between enforcement and appeal. This approach is also evidenced by the treatment of waiver and election of remedies. The Court did not consider these doctrines as separate matters of public-policy, but incorporated them into the contractual interpretation field that had been overturned in arbitration and in the seat court. The waiver and election objections were not separate objections in public policy. They were challenges to the tribunal’s interpretation and such interpretation had already been exhausted at the seat. Lastly, The fraud and natural-justice allegations were unsuccessful since they were untimely, unsubstantiated, and aimed at allowing the merits to be re-heard. That is not allowed in Section 48. 6. Why the decision settles the issue? The decision upholds the three-tier system of arbitration that has tribunal, seat court and enforcement court as a three-tier system with each having a unique and non-overlapping role. The tribunal adjudicated the merits; the seat court, curial supervision; and the enforcement court is limited to a narrow review by Section 48 of the Arbitration and Conciliation Act, 1996. The analytical risk that the Court faces is that should the enforcement court have the power to reconsider matters which have been determined by the seat court, the system would become one of repeated, multi-jurisdictional appeals, which undermines finality and efficiency. This embracement of transnational issue estoppel is not, therefore, only procedural and maintaining the hierarchy of the New York Convention. More importantly, the decision does not reduce public policy to estoppel, but alters the relationship between the two. The survival of public policy is as a substantive protection, but in the case of truly independent enforcement-state issues, those that the seat court could not have answered authoritatively. What is being foreclosed is the strategic repackage of issues that have been decided upon as a violation of fundamental policy. This is in line with comparative jurisprudence, in particular the Singapore method in Republic of India v. Deutsche Telekom AG that does not abolish a narrow space of public policy in the country but does not allow duplicative litigation. It does not abolish public policy, but deprives it of its power to serve as a surrogate appellate examination, and thus puts the enforcement-stage investigation back on its feet. 7. Implications of this to Indian arbitration. The sentencing increases the price of enforcement-stage hindrance. The Court enhances the number of barriers to challenging foreign awards materially by incorporating transnational issue estoppel into the analysis under Section 48, providing consistency with the pro-enforcement jurisdictions and strengthening predictability to foreign investors. Modern commentary in both legal and financial reporting has interpreted the decision in these terms, as a step to limit dilatory practices and rebuild trust in the enforcement regime in India. The fact that the Court is ready to consider SASHA as a coherent commercial code highlights the fact that consequences will be a follow-up to the design of a contract. Parties face the risk of judicial harmonisation to keep remedy clauses open to the narrower range of enforceability but not strict exclusivity, where the clauses are vaguely drafted. On the other hand, a deliberate attempt at clear drafting, be it on the side of mutually exclusive remedies or deliberately cumulative/controversies structures, will be upheld. The architectural layered exit in this instance helped the Court to describe the case as one involving contractual performance, rather than statutory illegality. However, the judgment raises a concern. When transnational issue estoppel is applied overboard, there is a risk that valid enforcement-state public policy interests may be prematurely excluded. Even in the comparative regime such as in Republic of India v. Deutsche Telekom AG, restricted objections on the basis of public-policy remain possible. The issue in the future will be keeping this balance, and finality without weakening the independence of domestic public policy review. Conclusion The ruling ultimately reinvents the place of the Section 48 in the system of international arbitration by clarifying that enforcement is not one in which a re-adjudication, but rather a stage that is characterized by finality. Its key point is that the real danger to arbitration is not the presence of public policy, but rather its abuse as a re-litigation tool. Placing transnational issue estoppel on the threshold the Court creates a solid line: once an issue has been decisively tried at the seat it can never be reopened in India under another name. What comes next is a more stringent sense of the concept of public policy that is limited to the more truly independent and fundamental objections, as opposed to derivative issues to matters that have already been resolved. This ruling thus does not merely support a pro-enforcement stance, but rather reorganizes the inquiry of enforcement as such, so that Section 48 becomes a safeguard of last resort, rather than an extension of the appeal, without restricting legitimate domestic interests. [1] Fourth-Year B.A. LL.B. (Hons.) Rajiv Gandhi National University of Law, Punjab. He can be reached at qaziahmadmasood22103@rgnul.ac.in

Namrata Ghosh [i] Introduction The apex Court in its recent ruling in the case of Hindustan Construction Company Ltd v. Bihar Rajya Pul Nirman Nigam Limited , noted, and importantly so, that “arbitration is often a friend in conferences, but a foe in practice”; this question is the very core of the condition of arbitration of disputes in the country. India’s arbitration framework has undergone various amendments to reduce judicial interference and promote arbitral autonomy. However, over the years, parties have tried to exploit procedural routes, intended to favour arbitration, to delay proceedings. Despite the statutory safeguards, the tug-of-war between judicial oversight and arbitral autonomy persists. Background of the present case In this case, Bihar Rajya Pul Nirman Nigam Limited ( hereinafter , “ The Respondent ”) entered into a construction contract with Hindustan Construction Company Ltd ( hereinafter , “ The Appellant ”). The contract contained a Clause providing for the settlement of disputes through arbitration . Subsequently, issues related to compensation for additional costs and losses arose between the parties, and the Respondent failed to appoint an arbitrator. Hence, an application under Section 11 of the Arbitration & Conciliation Act 1996 ( hereinafter , “ ACA ”) was filed, and a Sole Arbitrator was appointed. The award given by the arbitrator in this dispute was accepted by both parties. Consequently, issues related to the extension of time for completion of work and compensation for additional costs arose between the parties, and once again, a sole Arbitrator was appointed under Section 11 by the HC on the failure of the Respondent to appoint one. Despite participating in the arbitral proceedings for more than three years, the Respondent filed for review of the order under Section 11, which resulted in the stay of the arbitral proceedings. A total of seventy sittings were conducted in three years, and the proceedings have reached the stage of final arguments. The Respondent challenged the Section 11(6) appointment order, seeking a review of the order. Acting on this, the High Court ( hereinafter , “ HC ”) reopened these issues that already attained finality under the original section 11 order. Subsequently, on the challenge by the Appellant, the Supreme Court ( hereinafter , “ SC ”) held that the HC had no jurisdiction to review or re-open a concluded Section 11(6) order because the Act reflects principles of party autonomy and minimum court intervention. Furthermore, it opined that once the arbitrator is appointed, the court becomes functus officio . Review powers cannot be used to revisit issues that have already been decided, particularly when the party has participated in the arbitration. Section 11 of the ACA and its statutory role Arbitration agreements impose an obligation on parties to arbitrate disputes within their scope. Section 11 gives effect to this obligation by providing a statutory mechanism for appointing arbitrators in the event of a deadlock, thereby keeping such disputes within the arbitral forum rather than the courts. Under the 1940 Act, the duty to appoint the arbitrators was done by the court, which often caused a delay in the process. The 1996 act, on the other hand, resorted to the judiciary only when necessary, as it allowed the parties to determine their own appointment process. The 2015 amendment further streamlined this process, and the 2025 Amendment has also emphasised arbitral autonomy and minimal court intervention. Further, courts have held in the cases of Narayan Prasad Lohia vs Nikunj Kumar Lohia and M/S. Gayatri Project Limited vs Madhya Pradesh Road Development , that once arbitration proceedings are underway, the parties cannot subsequently challenge the arbitral tribunal's jurisdiction, thereby emphasising the judiciary’s efforts to encourage arbitration.  These reforms gave the tribunal power to decide on arbitrability and the substantive issues of the dispute, thereby strengthening the Kompetenz-Kompetenz principle under section 16 of the Act, with the objective to reinforce the principles and spirit of arbitration by giving the tribunal the power to analyse its own jurisdiction.   Power of the Court to review decisions Courts have repeatedly held that they lack the power to review a decision made under Section 11. The SC observed in the case of Kamal Gupta vs M/S L.R. Builders Pvt. Ltd, that once an order to appoint an arbitrator under Section 11(6) of the Act is disposed of, the court cannot entertain any matter in relation to the case disposed of under Section 11(6). Further, under Section 114 read with Order XLVII Rule 1 of the Code of Civil Procedure, 1908 ( hereinafter , “ CPC ”), a civil court has limited review jurisdiction. The grounds are, namely, the discovery of new and important evidence which could not, with due diligence, be produced before the court; an error apparent on the face of the record; or any other sufficient reason of a similar nature. The above provision contains a corrective jurisdiction to avoid manifest injustice, but it is not expansive or tantamount to an appeal rehearing on merits. However, there is no specific provision in ACA that expressly allows a court to challenge an order passed under Section 11. While Section 19 provides procedural flexibility to arbitral tribunals, including limited application of CPC such flexibility is not applicable to the courts exercising appointment powers. As held in judicial precedent s, there is a difference between substantive review on merits and procedural review to cure basic procedural irregularities. In the absence of an explicit statutory provision, courts or institutions exercising powers under Section 11 are thus precluded from making any substantive review of their orders of appointment. At best, a limited procedural review may be upheld in rare cases where the order is rendered null and void due to jurisdictional invalidity or a grave procedural irregularity. In the present case, the SC has taken a similar stance to the Court that has put an end to the debate on review of a decision under Section 11 and upholds the principle of Finality in the absence of an explicit provision. Notwithstanding, in the case of In S.B.P. & Co. v. Patel Engineering Ltd., the  SC held that an order passed under Section 11 is appealable before it under Article 136 of the Constitution of India. Likewise, in the instant case, the Court held that the only remedy available to challenge an order passed under Section 11 is under Article 136 and Section 16 of the ACA. Although this trend aims at ensuring justice and avoiding arbitrary appointments, it further strengthens judicial intervention and rules out any review under the Act. Nevertheless, it may cause a delay in the arbitration process and may also counter the legislative spirit of minimal judicial intervention. Beyond the Case: Impact on Indian Arbitration This ruling confirms the finality of orders made under Section 11, but also acknowledges that in exceptional circumstances, such as fraud or partiality resulting in a probable miscarriage of justice, limited review may be warranted. The Court also deals with the increasing abuse of judicial forums as dilatory tactics, such as delayed objections under Section 16, challenges under Section 12(5), frivolous adjournments, and collateral writ or review proceedings. Through the reiteration of the need for the resolution of arbitral disputes within the regime of the ACA, the decision clearly establishes a normative demarcation line that protects party autonomy and impartiality while preventing unjustified judicial intervention. However, the Courts are dealing with an overwhelming number of over 66,995 pending arbitration cases. The decision is a much-needed systemic corrective, reminding all concerned parties that arbitration is a dispute resolution process that is based on expedition, finality, and autonomy. Although judicial doctrine can help limit abuse, change can only come about through legislation. First, the Parliament must remove the long-standing uncertainty in the Section 11 scheme. As has been widely observed, Sections 8 (reference to arbitration) and 11 (appointment of arbitrators) have similar roles, but only Section 8 orders are appealable under Section 37. This asymmetry is “anomalous”. The Law Commission’s 246th Report had proposed amending Section 37 to allow appeals against Section 11 orders, but Parliament did not implement it. A legislative solution would thus specifically empower appellate review of Section 11 orders (perhaps with tight timelines), or at least confirm that the sole challenge after appointment is in the Section 34 scenario. Another critical aspect is the functus officio impact. This would prevent attempts to recharacterize finality as a “review” or new petition. Second, India needs statutory disincentives against forum-shopping and dilatory tactics. A promising model is the expanded costs regime recently proposed in the Draft Arbitration (Amendment) Bill, 2024 .  That draft would broaden Section 31-A to penalise frivolous claims as well as counterclaims, lifting the existing requirement to show delay.  The tribunals will gain an express power to order an adverse costs award in respect of any meritless or obstructive pleadings. In effect, the courts and tribunals should be required to make an award of indemnity costs and interest against the parties who bring unwarranted Section 11 claims or involve the tribunal in collateral disputes. [i] Namrata Ghosh is a fourth-year BA LLB (Hons.) student from NLU Odisha.

-  Parvati Arun [1] Sustainability is becoming a key driving factor in the way maritime contracts are set up and, therefore, the way they are executed. Previously, the majority of the issues related to the execution of maritime contracts could be attributed to eithercommercial or logistical factors; however, that model is changing and now the execution of maritime contracts is alsobeginning to include environmental provisions that have been implemented by means of international governing agenciessuch as the International Convention for the Prevention of Pollution from Ships (MARPOL) that have establishedregulations pertaining to environmental emissions and fuel standards. Due to these regulatory pressures and increasing commitment by corporations to Environmental, Social and Governance (ESG) activities, environmental compliance has been shifted from being a peripheral activity that could potentially causebusinesses damage to become a key obligation arising under maritime contracts between commercial parties such as  shipowners, charterers, operators and bunker suppliers  who allocate regulatory risk by employing express warranty and indemnity clauses. Consequently, disputes arising from alleged breaches of environmental obligations such as standards for fuel quality, emissions limits, and energy efficiency benchmarks have increasingly been viewed as a private commercial dispute between shipowners, charterers, and suppliers. Disputes of this nature are commonly within the scope of arbitration contracts contained in maritime contracts. This blog details the approach taken to adjudicate environmental claims in the context of the maritime industry; analysesboth the basis for the arbitral jurisdiction over these environmental claims; and assesses whether or not the arbitral processis able to continue to provide an effective forum for resolving disputes and promoting sustainability in that environmentwhile simultaneously meeting the traditional commercial objectives for which it was established.   1. ENVIRONMENTAL OBLIGATIONS IN MARITIME CONTRACTS:  FROM REGULATORY COMPLIANCE TO CONTRACTUAL DUTY The incorporation of environmental obligations into a maritime contract has developed over time from an implicitregulatory aspect to express and distinct contractual obligations, and in so doing, created an increasing number of disputes which can be resolved via arbitration. 1.1  The Regulatory Backdrop The International Maritime Organization (IMO) is the primary international organization responsible for regulatingshipping-related environmental issues. The IMO has developed an internationally recognised policy framework to preventmarine pollution from ships, which is outlined in MARPOL 73/78. Most noteworthy is MARPOL Annex VI, the part ofMARPOL that outlines the requirements and standards for regulating air emissions of sulphur oxides (SOx),     nitrogen oxides (NOx) and the amount of sulphur in the fuel used by a commercial vessel. The introduction of the global 0.50% sulphur cap on marine fuels by the International Maritime Organization constituted a major regulatory change that required ship-owners and charterers to either use cleaner fuels or implement alternative compliance methods . While these regulations are legally binding under public international law, the impact of these regulations will be most severely felt within the private contractual framework of the shipping industry. 1.2  Contractual Environmental Clauses in Practice Contracts for commercial maritime activities often specifically state that vessels used for those activities must comply with MARPOL regulations as part of the terms of the contract, typically incorporated through express clauses. For example, charterparties frequently have a clause requiring the vessel(s) to comply with "all applicable environmental laws," which includes limits on sulphur in fuel and emissions. Standard time charter clauses including the BIMCO 2020 Marine Fuel Sulphur Content Clause require fuel supplied by charterers to permit the vessel to comply with sulphur limits and other MARPOL Annex VI requirements . Likewise, bunker supply contracts typically contain fuel quality and sulphur content warranties that guarantee compliance with Annex VI regulations. The terms within bunker supply contracts commonly contain provisions which indicate that suppliers of bunkers must guarantee that those products will comply with MARPOL Annex VI, provide a compliant bunker, and a supply of representative samples. Through the use of Industry Model Clauses developed by trade associations and shipping organizations, we can see another example of how environmental compliance can be contractually operationalised. Through these clauses,responsibility and risk for non-compliance with regulation are allocated to the appropriate contracting party by way of contractual provisions that specifically relate to Fuel Standards and Emissions Control (using INTERTANKO Model Clauses ). When these clauses are included in Contracts, environmental regulation compliance becomes an obligation ofthe contracting parties rather than just an expectation of the Regulator. 1.3  From Soft Law to Enforceable Duties Once a State ratifies international Maritime Organisation (IMO) conventions, they become binding treaty obligations forthat State and thus constitute a form of international law. The enforcement of these treaties typically occurs through domestic regulations and implementation procedures. However, private maritime contracts may also incorporate byreference IMO treaties or other related standards. When this occurs, those treaties/standards serve as benchmarks forperformance rather than being directly enforceable as public law obligations. The conventions of the International Maritime Organization (IMO) are not classified as soft law, but rather the soft law elements are found within the IMOframeworks, such as associated guidelines, technical codes, and non-mandatory standards, which obtain binding force onparties to a contract once they are included in that contract. Whether or not a party is subject to performance obligations arising from the incorporation of soft law elements into a contract depends ultimately on how the contract itself is drafted, including how the requirement for compliance with soft law elements is delineated (e.g., as a warranty, condition, covenant, or continuing obligation). Like other examples of ESG-related contracting, the introduction of obligations related to sustainable managementthrough treaty and contract has been implemented through contracts between private sector entities. In maritime contracts specifically, if the environmental standards of fuel composition, emission performance or vessel efficiency, as required by these treaties, are not achieved or maintained by either party, the other party could have a claim for breach, to receive indemnification, or otherwise seek compensation for these failures . As such, these claims are of a commercial nature and exist between the two parties, rather than as a function of an individual’s or the company's conduct and satisfyingregulatory requirements and/or penalties imposed by a regulatory body. 1.4  Implications for Arbitration Understanding the transition of environmental compliance into a contractual obligation provides insight into why environmental issues are more commonly arising in maritime arbitration. Disputes that arise from whether a party hasfulfilled their obligations under a contract for environmental standards involve rights in personam, which are created through private agreements, rather than the enforcement of public environmental laws by state organisations. In many cases, technical information (such as testing fuel samples, measuring pollution, or conducting analyses ofregulatory compliance by experts) is at the centre of these types of legal disagreements; therefore, arbitration allows forvarying ways of approaching these types of cases, as well as having experts within the industry available to assist in the resolution. The contractual nature of the relationship between the parties (the shipper and the shipping company) forms a legal argument for viewing most environmental claims that arise out of a transport contract as an arbitrable businessdispute. While this agreement is pertinent to arbitrability, it is  imperative to note that it limits the disputes to only thoseof inter-se allocations of risk and liability between parties without doing away with public authorities' continued involvement in enforcing environmental regulations on behalf of the public. Subsequent portions of this blog will reviewthis argument further. Failure to meet the above-mentioned contractual environmental clauses will result in various private law repercussions, including a breach of warranty, a claim for indemnity, a claim for damages resulting from off-specification fuel, the ability to recover costs for regulatory fines/penalties against one party by the other, and, potentially (in some circumstances) theability to terminate the contract where compliance is a condition precedent. This methodology corresponds with standard risk-allocation mechanisms which are present in most contemporary charterparty and bunker supply contracts, including those that rely on the BIMCO and INTERTANKO standard model clauses. The precise ramifications that result from afailure to comply with the clause will depend on how the clause is drafted and what has been agreed to in terms of risk allocation between the parties. Nevertheless, it does not follow that every instance of non-compliance will lead to an arbitration. Often, agreements contain clauses that allow for the adjustment of minor or technical breaches, the settlement of such breaches on acommercial basis, or the resolution of claims without resorting to formal dispute resolution. Arbitration arises normallyafter it has been determined that there are commercial consequences resulting from a noncompliance that cannot be resolved by mutual agreement, or where the parties have a disagreement over who is responsible for an exposure to a fine, financial loss or breach of contract under an agreement, as a result of a non-compliance.   2. ARBITRABILITY OF ENVIRONMENTAL CLAIMS IN MARITIME DISPUTES A primary concern in resolving environmental claims through arbitration is the arbitrability of such claims. While environmental laws and regulations are typically associated with public law, environmental claims associated withobligations set forth in maritime contracts are often viewed as private, bilateral, and compensatory in nature. The distinction between public enforcement of environmental law and contract disputes surrounding environmental non-compliance in international arbitration case law lies in how claims are interpreted and handled. Claims that arise out of contractual agreements - for example, those pertaining to non-compliant fuel, violations of emissions warranties or theallocation of costs related to pollution - will be viewed as property rights in personam; therefore, they would be brought forth to arbitration. The framework established by the Indian Supreme Court for determining whether cases may go through arbitration is based on whether the dispute arises from the contractually defined private legal rights of one party against another, or from an action taken against a state actor exercising sovereign power or performing regulatory functions. Claims relating to the environment found in maritime contracts are generally considered to be arbitrable claims because they do not resultfrom regulatory sanctions but instead request damages or indemnities. 3. TREATMENT OF ENVIRONMENTAL CLAIMS BY MARITIME ARBITRAL FORUMS With the rise in environmental compliance related disputes in maritime law, especially with respect to ship charterparties and bunker supply contracts, maritime arbitral institutions are increasingly acting as the forum for these types of disputes. The various forums operated by the London Maritime Arbitrators Association (LMAA) have been regularly used to resolve claims concerning the quality of fuel used by vessels, compliance with emission standards, and the liability for pollution. While India does not possess a separate maritime arbitration body akin to the LMAA, there has been an increasing prevalence of environmental compliance disputes arising from shipping contracts before  Indian arbitrationforums. These disputes are typically pursued either by way of ad hoc arbitration or through more general institutional frameworks and take the form of different types of contractual claims, including claims for breach of contract, indemnity and cost allocation. It is significant to note that the underlying issues which may give rise to environmental compliance claims, and/or non-compliance with air and water pollution, are likely also to attract the attention of various relevant Port Authorities, Custom Officials and/or maritime regulatory authorities. The coexistence of contractual arbitration and regulatory oversight in this context reflects the practical separation between private dispute resolution and public enforcement in Indian maritime practice. Disputes of this nature typically involve a significant amount of detail and require significant expertise in assessinglaboratory reports, compliance documents, and expert testimony relating to environmental standards. The arbitration process has a high level of procedural flexibility, enabling tribunals to appoint technical experts or develop customised evidential procedures that reflect the nature of disputes. Simultaneously, the tension that arbitrations preferred feature of confidentiality presents in relation to environmentaldisputes that include a wide variety of community or environmental factors. In addition to being attractive to the parties to a business transaction, the issue of privacy raises serious concerns regarding the future of environmental andsustainability protocols, and the degree of lack of transparency for maritime arbitrations will continue to be an increasing issue in maritime arbitrations. 4.  SUSTAINABILITY AND “GREEN” ARBITRATION PRACTICES Arbitration is also being viewed through the lens of sustainability apart from the subject matter of disputes. The shippingindustry has recently started aligning its arbitration practices with the environmental goals of the broader shippingindustry by implementing Green Arbitration practices. This encompasses utilizing technology to conduct the arbitration process without needing paper (a paperless process),using virtual hearings, and reducing the reliance on travel (decreasing greenhouse gases emitted during travel) whilecontinuing to protect parties' due process rights . Many of these practices have seen an increase in popularity in the context of international disputes related to shipping, where the location of the parties involved and/or the arbitrators may bewidely dispersed geographically. In addition, there has been a noticeable increase in tribunals’ tendencies to develop commercially pragmatic remedies that incentivise an offending party into compliance over punitive measures such as cost shifting mechanisms and/or performance-directed orders. In doing so, it has created a new perception of arbitration, which is no longer just seen toresolve environmental disputes, but also as a process that can support the development of sustainable outcomes. 5. THE ROAD AHEAD: ESG, CLIMATE RISK, AND MARITIME ARBITRATION With the growing trend for ESG-related clauses being included in all shipping contracts, it is likely that environmentalfactors will play a more important role in future maritime arbitration. Examples of variables that continue to become integral components of businesses' commercial expectations include climate risk, emission performance, and sustainability reporting; therefore, compliance with environmental regulations has now become one of the primary issuesin allocating risks. Arbitrators may become more highly specialized because of this evolution, and the present trend toward reliance on scientific expertise may result in the development of institutionalized resources to aid in the resolution of environment-related disputes. As a means of addressing complex, multifaceted international maritime issues that arise from climatechange obligations through arbitration, the flexibility of the arbitration process will continue to attract users. In conclusion, arbitration cannot serve as a substitute for public enforcement of environmental legislation; however, it can function alongside public agencies to create a viable, legally enforceable mechanism to compel compliance with theenvironmentally sustainable practices. By providing businesses with a binding agreement to follow through with theircommitments, arbitration will allow the increased enforceability of environmental sustainability initiatives in the maritime commerce sector. [1] Fifth Year BA LLB (Hons) student at Institute of Law, Nirma University, Ahmedabad [E-mail parvathyarun93@gmail.com ]. Her academic interests include arbitration and maritime law.

-Anshika Kaushik [1] Introduction and Background Arbitration has always been at a higher pedestal over traditional litigation primarily due to its speed, cost-effectiveness and flexibility. The advantages of dispute resolution are further propelled by the integration of technology. The emergence of digital communication has moved commercial dealings from the boardroom to email exchanges. This transformation was particularly seen by the unprecedented COVID-19 pandemic, which saw a large-scale use of technology in the resolution of disputes, especially high-stakes commercial disputes. While a message or email may constitute a valid binding contract if it fulfils the essential requirements,[2] issues arise as to the legal recognition of communications exchanged on platforms like WhatsApp, particularly in the context of arbitration agreements. Unlike emails, WhatsApp provides end-to-end encryption, ensuring that all communication is highly secure, making it ideal for commercial practice. It has been observed to be frequently used for operational decisions, contractual negotiations and even dispute resolution mechanisms. The recent Delhi High Court judgment in Belvedere Resources DMCC v. OCL Iron & Steel Ltd 2025 SCC OnLine Del 4652 held Whatsapp messages and email constituted a valid arbitration agreement under Section 7(4)(b) of the Arbitration and Conciliation Act, 1996 (¶ 55) . This raises critical questions about the binding nature of an unsigned arbitration agreement formed over a Whatsapp conversation. The judgement authored by Justice Jasmeet Singh has reaffirmed the principles of arbitration in Section 7(4)(b). It is intended by the legislature that it reflects modern commercial practices in line with international standards. The courts must not enforce rigid formalities but what matters is the recorded intent to arbitrate irrespective of whether it is in formal ink. This article examines how WhatsApp messages may constitute valid arbitration agreements under the UNCITRAL Model Law, while also analyzing judicial trends and evidentiary considerations surrounding the use of such digital correspondences in arbitration proceedings. Requirement of Writing The attributes of a valid arbitration agreement is it must be in writing showing [3] 1) a clear and unambiguous intention to arbitrate 2) an obligation to submit disputes to arbitration 3) it must ensure that disputes are resolved by an independent arbitral tribunal [4] and 4) lastly, that the arbitral award would be final and binding on the parties.  The first essential of a valid arbitration agreement is it must be in writing save as it may be in the form of a clause in a contract or an agreement. Section 7(4)(b) of the Arbitration and Conciliation Act, 1996 provides that this essential is fulfilled through an exchange of letters, telegrams or means of other telecommunication which provide a record of the agreement . The phrase telecommunication was further amended to include communication through electronic means by way of the Arbitration and Conciliation (Amendment) Act, 2015. The broader concept of electronic communication (through means of WhatsApp, emails, etc.) is captured through Section 7(4)(b) and (c) as other means of communication which provide a record.  A record of agreement means a bilateral record of consent [5] hence a situation where consent of one party is not recorded would not fulfil this essential. Further, the consent of party cannot be culled out in absence of formalities like signatures [6] , affixing a seal [7] etc. if ad idem between the parties [8] can be shown through correspondence or conduct. The section is based on Article 7 of the UNCITRAL Model Law [9] that an arbitration agreement may be made by electronic communication if the information therein is accessible for later reference. Thus, the evidentiary value of a digital arbitration agreement is valid so far as it is accessible for the arbitral tribunal or court of law. Hence, if such communication via instant messages, voice notes, or teleconferencing provides a record of the agreement, it can constitute a valid arbitration agreement. The blue tick mark indicates the read receipt by the receiver and such can also serve as a evidence [10] of successful transmission and receipt of the arbitration agreement. A WhatsApp message constitutes valid legal evidence under Indian law, falling within the meaning of “electronic records ” defined under Section 2(1)(t) of the Information Technology Act, 2000. Acceptance of WhatsApp as a means of communication A perusal of judgments recognising arbitration agreements under Section 7(4)(b) shows a pragmatic approach of Indian courts in adopting modern communication as a valid mode of forming an agreement. The Supreme Court in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1 [11] affirmed the proposition that an arbitration agreement exists if it satisfies the statutory requirements of both the Indian Contract Act and the Arbitration Act. The Hon’ble Supreme Court have held email exchanges can be a valid arbitration agreement [12] in the absence of a signed arbitration agreement by inferring from the conduct of the parties. Hence, the courts have done away with the conventional sense of a binding arbitration agreement. [13] The use of WhatsApp in arbitration is illustrated both substantially and procedurally by Indian courts. A Delhi High Court judgment held that there was a valid service of arbitral notice effected by email and WhatsApp. The Bombay High Court upheld an arbitral award where WhatsApp messages acknowledging liability were relied upon by the tribunal under Section 18 of the Limitation Act. The judicial trend of recognising electronic arbitration agreements and digital evidence in arbitral proceedings cautions parties to preserve their digital trail and communicate about arbitration clauses early to avoid rounds of litigation. The UAE Federal Supreme Court in 2019 [14] had ruled that an arbitration agreement via WhatsApp would be binding provided that they fulfil the statutory requirement of electronic transactions. Further, a Dubai Cassation Court held that an arbitration agreement can be concluded if the WhatsApp message exchange has evidence of receipt (indicated by “blue ticks”) before or during the subject matter agreement or after its nullity. Issues and Challenges The use of WhatsApp in forming arbitration agreements and conducting arbitral proceedings reflects the digitisation of dispute resolution mechanisms, but also reflects key legal issues and practical concerns. Primarily, the issue of interpretating “agreement in writing” is strict in Article II of the New York Convention [15] (ratified by 172 countries) that does not accept arbitration agreement made through electronic means, hence there are potential risks in the Convention based enforcement proceedings. The UNCITRAL 2006 Recommendation regarding interpretation of Article II(2) of the New York Convention suggests that the form of arbitration agreement listed in the Article is not exhaustive and should be understood to include modern electronic communications. [16] The adoption of this recommendation has produced almost a unanimous support by various judicial authorities in support of arbitration agreement made by exchange of emails etc. This includes the decision of Czech Supreme Court that held that arbitration clause contained in exchange of emails as valid. The court in its judgement approved the recommendation in its decision holding that the list of form in Art II(2) of the Convention is not exhaustive. The same analogy was applied by the Indian Supreme Court in Great Offshore Ltd. v. Iranian Offshore Engineering 2008 (14) SCC 240 that concerned exchange of faxes. Similar cases are found in the US in its decision of Glencore Ltd. v. Degussa 2012 WL 223240 (S.D.N.Y.) where court decided that a sales contract containing an arbitration agreement sent over email communication validly meets the writing requirement and that it qualifies as “letters and telegrams” within the meaning of the Convention. An electronically concluded arbitration agreement would still require closer scrutiny by courts to ascertain whether the electronic communication reliably evidence a clear intention to arbitrate, if person communicating consent was authorised to do so, and whether the communications be authenticated and admitted as evidence. In cross-border disputes, digital evidences in the form of emails, text messages, recordings may be subjected to local data protection laws that can restrict data access e.g European Union’s General Data Protection Regulation (GDPR). Conclusion Digital communication platform like Whatsapp has reshaped contract formation and dispute resolution mechanism. The Indian jurisprudence has increasingly become pro-arbitration and courts have begin aligning themselves with international norms on arbitration agreements formed digitally. It is essential for arbitration to reimagine itself in tech age by streamlining digital authentication and calibrating legal frameworks with pragmatism and foresight. The Draft Arbitration and Conciliation (Amendment) Bill, 2024 seeks to validate digitally signed arbitration agreements and incorporating technological know-how into arbitral proceedings. A digitally signed arbitration agreement will help avoid frivolous claims on the validity of the agreement. This would in consonance with the Section 5 of the Information Technology Act, 2005 that recognises digital signatures on par with physical signatures. Further, by integrating more techno- legal utilities, it would make arbitration more accessible and promote digital contracting in businesses. In the tech age, arbitration can retain its strengths if the existing mechanisms evolves in tandem with the way parties communicate and transact.   [1] Anshika Kaushik, third year law student at Symbiosis Law School, NOIDA. The author can be reached out at anshika.kaushik@symlaw.edu.in [2] Ambalal Sarabhai Enterprise Limited v. KS Infraspace LLP, (2020) 15 SCC 585. [3] Bihar State Mineral Development Corpn. v. Encon Builders (I) (P) Ltd., (2003) 7 SCC 418. [4] K.K. Modi v. K.N. Modi AIR 1998 SCC OnLine SC 745. [5] P.T. Tirtamas Comexindo v. Delta International Ltd., 1998 SCC OnLine Cal 300. [6] Shakti Bhog Foods Limited v. Kola Shipping Limited 2009) 2 SCC 134. [7] Encon Builders (n 3) [8] Rickmers Verwaltung GMBH v. Indian Oil Corpn. Ltd., (1999) 1 SCC 1. [9] United Nations, UNCITRAL Model Law on International Commercial Arbitration 1985: with amendments as adopted in 2006 https:// uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09955_e_ebook.pdf [10] SBI Cards and Payment Services Pvt. Ltd. v. Rohidas Jadhav 2018 SCC OnLine Bom 1262. [11] Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1, ¶63-64 [12] Trimex International FZE Ltd. Dubai v. Vedanta Aluminium Ltd., India (2010) 3 SCC 1. [13] Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1, ¶ 76. [14] Waseem AlWasil & Rami Wasel, Supreme Court Ruling: Agreeing to Arbitration by E-mail and Instant Messaging, WASEL & WASEL ARB. (July 4, 2019), https://waselandwasel.com/articles/supreme-court-ruling-agreeing-to-arbitration-by-e-mail-and-instant-messaging/ . [15] United Nations, The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 29 December 1958 https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards . [16] United Nations, General Assembly. Recommendation regarding the interpretation of article II, paragraph 2, and article VII, paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/a2e.pdf

Pranjal Srivastava [1]   and Pragati Yadav [2]   Introduction Imagine this: An arbitrator, one of the most respected law professors in her field, is appointed to a billion-dollar dispute turning on one question: Can a state's new data privacy law, which unintentionally guts the value of a foreign tech investment, count as indirect expropriation? The parties appoint a leading law professor, chosen specifically for her deep expertise on the subject. The wrinkle? Her most recent book argues, quite persuasively, for a legal interpretation that happens to favor the state. She has no financial interest in the outcome. No personal connection to the parties. Her only link to the case is her own public, intellectual commitment to a particular legal view. This puts the parties in a bind: have they appointed the perfect expert, or someone who is already predisposed to rule against them, Further, this situation raises the questions whether the principles of party autonomy, independence and impartiality of the arbitrator are truly being upheld in the guise of expertise. This is the heart of an 'issue conflict,' and it may be one of the most difficult ethical tests in modern arbitration. While the existing rules handle financial conflicts well, they offer little guidance on the fuzzier problem of intellectual bias . In an age that demands deep specialization, the system actively seeks out arbitrators with well-defined opinions. It seems a new framework is needed to manage that reality. The Problems: When Expertise Ends and Bias Begins Defining an 'issue conflict' requires some precision. Learned Justice Tomka whilst deliberating upon the merits of the challenge in CC/Devas vs India observed that “The basis for the alleged conflict of interest in a challenge invoking an "issue conflict" is a narrow one as it does not involve a typical situation of bias directly for or against one of the parties. The conflict is based on a concern that an arbitrator will not approach an issue impartially, but rather with a desire to conform to his or her own previously expressed view… To sustain any challenge brought on such a basis requires more than simply having expressed any prior view; I must find, on the basis of the prior view and any other relevant circumstances, that there is an appearance of prejudgment of an issue likely to be relevant to the dispute on which the parties have a reasonable expectation of an open mind.”   In the words of Sinclair : … an ‘issue conflict’ in arbitration describes the existence of actual or apparent bias on the part of the arbitrator stemming from his or her previously expressed views on a question that goes to the very outcome of the case to be decided. It denotes the arbitrator’s relationship to the subject matter of the dispute, and his or her perceived capacity to adjudicate with an open mind”.   There are primarily three situations which may be circumscribed under the ambit of issue conflict: conflicts arising (i) where the arbitrator has previously acted in the capacity of a counsel in the pertaining subject matter, (ii) where, acting as an arbitrator, he has ruled on similar subject matter/issues, and (iii) , when an arbitrator has already taken a firm, public stance—in an academic paper, a book. Now, it is important to note that this is not a rigid categorization and often, overlaps arise, where a conflict is not falling under one of the above categories. For example, an individual might act as an arbitrator and he has also written articles about the similar subject matter. Still, the broad purview of what an issue conflict is remains the same. The present article, for the sake of brevity will focus its discussion on the third category of issue conflict arising primarily due to a previous scholarly disposition of the arbitrator. This category of conflicts creates a true paradox of specialization. As commercial and treaty disputes become more complex, involving everything from cryptocurrency to CRISPR gene-editing technology, parties desperately need decision-makers who understand the subject matter deeply . A generalist judge simply won't do. Yet, the more of an expert someone is, the more likely they are to have researched, analyzed, and formed strong conclusions on the key issues in their field. The very quality we seek in an arbitrator—deep expertise—appears to be inextricably linked to the potential for pre-judgment. We are hiring them for their opinion, but what if they’ve already given it? Our primary tool for navigating arbitrator ethics, the IBA Guidelines on Conflicts of Interest in International Arbitration (especially Part II) , wasn't really built for this problem. The Guidelines’ color-coded lists (the Non-Waivable Red List, the Orange List, and the Green List) are brilliant for mapping conflicts arising from financial and professional relationships. They tell us what to do if an arbitrator’s firm has advised a party or if they hold shares in a subsidiary. But they offer virtually no guidance on what to do if an arbitrator is the world's leading intellectual proponent of a legal theory that will decide the entire case. This seems to be a significant gap in our ethical framework. Ambiguity in Law and Practice Without clear rules, parties and institutions are left navigating this territory with a vague and unreliable compass: the universal "justifiable doubts" standard. Found in virtually every major arbitration law, including the UNCITRAL Model Law , this standard asks whether circumstances exist that give rise to justifiable doubts as to an arbitrator's impartiality or independence. But what is "justifiable" when the source of the doubt is the very expertise for which an arbitrator was chosen? The standard may be too blunt an instrument for such a delicate task. This uncertainty has resulted in unpredictable outcomes. The pivotal UK Supreme Court case, Halliburton Company v Chubb Bermuda Insurance Ltd , offers a valuable point of reference. Though the case focused on an arbitrator's lack of disclosure regarding multiple roles in related matters, its primary insight is significant. The Court highlighted that the duty to disclose is essential and should be evaluated from the perspective of the "fair-minded and informed observer." It’s difficult to contend that a fair-minded observer, upon discovering that their adjudicator had already reached a definitive conclusion on the most crucial legal issue in the case, wouldn’t wish to be informed about it in advance. The battleground for issue conflict is most active in investment arbitration, where these tensions are on full display. A quintessential example is the challenge brought against a leading academic, Professor Vaughan Lowe, in Caratube International Oil Company LLP v. Republic of Kazakhstan . The Challenge in Caratube v. Kazakhstan The dispute concerned an oil exploration contract. The claimant, Caratube, alleged that Kazakhstan had violated its obligations under the Energy Charter Treaty, particularly the standard of Fair and Equitable Treatment (FET) . Professor Lowe, a highly respected public international law scholar from Oxford, was appointed to the tribunal. Kazakhstan challenged his appointment, arguing not that he had a financial interest, but that his academic writings revealed a pre-formed and "narrow" view on the doctrine of legitimate expectations, a key component of the FET standard. This was a classic issue conflict scenario: the very expertise that made Professor Lowe a desirable candidate—his extensive scholarship on international investment law—was being used as a weapon to question his impartiality. In its Decision on the Proposal for Disqualification , the tribunal rejected the challenge. The decision is illuminating. The two other arbitrators acknowledged that an arbitrator should not have a "closed mind," but astutely observed that "jurists do not live in ivory towers; they live in the real world." They reasoned that requiring arbitrators to have no pre-existing views on any legal issue would be an impossible standard. It would disqualify virtually every experienced academic, judge, or practitioner from serving. The tribunal found that Professor Lowe's writings, while demonstrating a clear viewpoint, were academic in nature and did not suggest he would be unable to consider the specific facts and arguments of the case before him. The Caratube decision highlights the immense difficulty here. While Professor Lowe was not disqualified, the fact that such a challenge was mounted based purely on his scholarly work shows how contentious this area is. If academics fear their scholarly work will disqualify them from future appointments, they may simply stop writing on controversial topics, impoverishing legal debate for everyone. A Proposed Solution: The 'Spectrum of Predisposition' Test What appears to be needed, then, is a more sophisticated tool—a framework that provides clarity while preserving the vital role of expert arbitrators. A "Spectrum of Predisposition" could serve as a three-tiered test, designed not as a rigid rulebook, but as a guide for disclosure and, in rare cases, disqualification. Level 1: Permissible Expertise (Green Light) This is the baseline and covers the vast majority of situations. An arbitrator has general expertise and has written or spoken on the broad area of law relevant to the dispute. For example, an arbitrator in a construction case has authored a textbook on construction law. This is precisely why they were selected. No disclosure should be required, and it cannot be grounds for a challenge. Level 2: Mandatory Disclosure (Yellow Light) This is the crucial middle ground where our current framework fails. This level is triggered when an arbitrator has expressed a firm, published view on a specific, narrow, and potentially dispositive legal issue in the present case. For example, a dispute turns on whether an AI system can be legally recognized as an "inventor" on a patent application. The appointed arbitrator recently published a law review article titled, "Why AI Can Never Be an Inventor: A Doctrinal Analysis." Under this test, this does not mean automatic disqualification. However, it triggers a mandatory duty of disclosure . The arbitrator must proactively inform the parties of their specific published position. This respects the principle from Halliburton and empowers the parties, who can then accept the arbitrator or raise a challenge based on a complete set of facts. Level 3: Presumption of Disqualification (Red Light) This highest level is reserved for the rare case where an arbitrator has crossed the line from academic to activist . This isn't just about having an opinion; it's about actively campaigning for it. This could involve lobbying governments to adopt their legal interpretation, serving as an expert witness for another party on the exact same legal point, or using language so extreme and one-sided ("no reasonable person could ever conclude otherwise") that it demonstrates a palpably closed mind. In these exceptional circumstances, a presumption of partiality should arise , shifting the burden to the arbitrator and the party who appointed them to prove they can still be impartial. Conclusion The nature of global disputes is evolving, and our ethical standards for those who resolve them must evolve too. The issue conflict conundrum is not a fringe problem; it strikes at the heart of the promise of arbitration: to provide fair, impartial, and expert justice. We cannot simply ignore the paradox that our search for expertise creates. By adopting a more nuanced framework like the 'Spectrum of Predisposition,' we can move beyond the outdated balance sheet approach to conflicts. This could bring clarity to a murky area of law, reduce tactical challenges, and, most importantly, reinforce the legitimacy of the arbitral process for an increasingly complex world. [1] Pranjal Srivastava  is a fourth year BBA LLB (Hons.) student from MNLU Nagpur. [2] Pragati Yadav  is a fourth year BA LLB (Hons. in Adjudication and Justicing) student from MNLU Nagpur.