Supreme Court: Arbitration Is Often A Friend In Conferences But A Foe In Practice; Has At Times Become More Cumbersome Than Civil Litigation
The Supreme Court said that the evolution of the judicial role from that of a helicopter parent to that of a guardian angel of arbitration has been neither smooth nor uniform.
Justice J.B. Pardiwala, Justice R. Mahadevan, Supreme Court
The Supreme Court has remarked that arbitration is often a friend in conferences but a foe in practice.
The Court was deciding a Civil Appeal filed against the Judgment of the Patna High Court by which it dismissed the Request Case filed under Section 11 of the A&C Act.
The two-Judge Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan observed, “Arbitration is often a friend in conferences but a foe in practice. Its raison d’etre has always been to ease the burden on courts and to ensure the expeditious resolution of commercial disputes. Yet, this is not its only virtue. The true advantage of arbitration lies in its freedom and flexibility, with party autonomy as the cornerstone of the arbitral process.”
The Bench said that the evolution of the judicial role from that of a helicopter parent to that of a guardian angel of arbitration has been neither smooth nor uniform.
Senior Advocates Navin Pahwa and Senthil Jagdeesan represented the Appellant, while AOR Manish Kumar represented the Respondents.
Court’s Observations
The Supreme Court after hearing the contentions of the counsel, noted, “Parties enjoy the liberty to determine the strength and composition of the tribunal, to appoint domain experts as arbitrators, and to design procedures suited to the nature and complexity of their disputes. This freedom allows them to bring to the table expertise and insight that even a judge may not be able to contribute.”
The Court added that, however, parties often embrace arbitration in good times, only to resist or manipulate it when disputes actually arise – seeking either to wiggle out of arbitration altogether or to tilt the process unfairly in their favour.
“In such situations, judicial intervention becomes inevitable and rightly so to safeguard fairness and the integrity of the arbitral process”, it further remarked.
The Court said that successive legislative amendments, most notably those of 2015, 2019, and 2021, have sought to curtail judicial interference and recalibrate the delicate balance between autonomy and oversight, yet, in practice, arbitration has at times become more cumbersome than civil litigation.
“Parties continue to exploit every procedural avenue to delay proceedings, i.e., filing a maze of applications before the arbitral tribunal, the High Court, and even this Court, often on technical or jurisdictional objections”, it observed.
The Court was of the view that the present case is yet another instance where the fine boundary between judicial oversight and arbitral independence is tested.
“At its core, arbitration remains a creature of contract, founded on the twin pillars of party autonomy and impartiality. Every act of interpretation whether of the statute or of the contract must therefore be guided by these two foundational principles”, it emphasised.
Conclusion
The Court remarked that Section 12(5) protects impartiality; Section 4 regulates procedural conduct; and Section 29A ensures continuity of proceedings.
“It is necessary to restate the well-settled legal position regarding the precedential value of orders dismissing Special Leave Petitions. A non-speaking dismissal of an SLP signifies only that this Court, in its discretion under Article 136, has declined to interfere. It does not amount to approval of the reasoning of the subordinate forum. The doctrine of merger does not apply to such dismissals”, it concluded.
Accordingly, the Apex Court allowed the Appeal.
Cause Title- Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Limited and Others (Neutral Citation: 2025 INSC 1365)
