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Informist, Friday, May 29, 2026

 

NEW DELHI – The Supreme Court Friday observed that courts and governments in India have often failed the arbitration mechanism in the country. A single doubtful precedent in the arbitration mechanism has the potential to cast a shadow on its viability in India and its impact on the ease of doing business in India, a bench of Justice J.K. Maheshwari and Justice Atul S. Chandurkar said.

 

There is no gainsaying that judicial interference in alternative dispute resolution has often been a cure without a disease in India, the apex court said. In this context, it is high time that judges realise that certainty, uniformity and finality are also cherished values, the top court said.

 

Arbitral awards and processes have to be treated with an open judicial mind, the apex court said. There remains hesitancy among some courts to accept alternative dispute resolution mechanisms, the top court said. This hesitance is rooted in suspicion of the process, which often leads to re-examination of evidence and re-interpretation of contractual terms at the stage of challenge of an arbitral award, the apex court said.

 

The top court upheld a 2014 arbitral award that allowed Jabalpur Corridor Pvt. Ltd.'s claims and rejected Madhya Pradesh Road Development Corp. Ltd.'s counterclaims. The apex court said that the conduct of Madhya Pradesh Road Development Corp. has been deplorable. It has fought tooth and nail to delay the payment of contractual dues. It has taken 19 years since the project was terminated for the award to fructify, the top court said. The pace of the dispute resolution mechanism in the present case is a star witness for the statement "justice delayed is justice denied", the court said.  

 

The apex court said that the petitioner, a state government undertaking, has again raised the issue of the arbitral tribunal's jurisdiction, even though the Supreme Court had long ago decided it. The petitioner's approach fundamentally undermines the core objectives of the Arbitration and Conciliation Act. Jabalpur Corridor has already endured over a decade of litigation despite having succeeded before the arbitral tribunal and through multiple judicial stages, the court said. To permit the petitioner now to reopen a jurisdictional issue that had already been settled would amount to sanctioning perpetual litigation and defeating the very sanctity of arbitral finality, the court said.

 

The case has its genesis in Madhya Pradesh Road Development Corp. floating a tender for design, engineering, financing, procurement, construction, operation, and maintenance of the Jabalpur Sagar Damoh road project to Jabalpur Corridor. After a dispute between the parties, Jabalpur Corridor invoked arbitration, which ruled in its favour in 2014. Thereafter, the case has witnessed two rounds of litigation, taking more than 12 years to conclude. The litigations have meant that the Madhya Pradesh High Court and the Bhopal district court have each time reopened the evidence and documents to decide the validity of the arbitral award.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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