WORDS, WINDOWS, AND WARRANTS:

R. GOPALAKANNAN B.A., B.L., ADVOCATE

Panel Advocate empanelled with the Supreme Court Legal Services Committee (SCLSC)

27 June 2026

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The first half of 2026 produced nine Supreme Court decisions on arbitration. Taken together, they carry one consistent message: the judiciary will police its own boundaries. Courts that overreach into arbitral proceedings, High Courts that act as appellate tribunals beyond their remit, and parties that participate without objection and then attack the very process they joined all found little sympathy this year.

This article examines five rulings that matter most for practitioners. Each touches a distinct nerve of the Arbitration and Conciliation Act, 1996 clause drafting, the scope of Section 9, the reach of Section 33, limitation under Section 34, and the jurisdictional limits of High Courts sitting in arbitration matters.

1. Words Have Consequences

Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. (2026 INSC 384)

Decided: 17 April 2026 | Justices Sanjay Karol and N.K. Singh

The Question: Does the phrase "can be settled by arbitration" in a bill of lading constitute a binding arbitration agreement?

The appellant, a manufacturer of aluminium foil containers, contracted with a logistics company for the transport of goods to the United States. A payment dispute arose after the respondent delivered a shipment to the buyer without collecting payment or the original bill of lading. When the appellant sought to invoke arbitration, the respondent refused. Clause 25 of the bill of lading read: "Any difference of opinion or dispute thereunder can be settled by arbitration in India or a place mutually agreed with each party appointing an arbitrator."

A bench of Justices Sanjay Karol and N.K. Singh held that the word "can" denotes capacity or factual possibility, not obligation. The clause indicated merely the future possibility of referring disputes to arbitration. For arbitration to actually proceed, both parties would need to agree afresh. Without that fresh consensus, there is no binding arbitration agreement, and no Section 11 application for appointment of an arbitrator can succeed.

The Bombay High Court had dismissed the Section 11 application on the same basis. The Supreme Court affirmed that refusal and dismissed the appeal.

What this means in practice: Contract drafters must distinguish between aspirational language and enforceable obligations. The choice between "can", "may", "shall", and "must" is not a matter of style when it appears in a dispute resolution clause. It is a matter of jurisdiction. A clause that leaves arbitration as an option requiring fresh consent cannot be enforced by a party the other side refuses to join. Standard shipping and logistics contracts that use permissive phrasing should be reviewed immediately.

2.Interim Relief Without Winners

Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi (2026 INSC 415)

Decided: 24 April 2026 | Justices Manoj Misra and Manmohan

The Question: Can a party that lost in arbitration seek interim protection under Section 9 of the A&C Act at the post-award stage?

The High Courts had divided sharply on this. The Bombay, Delhi, Madras, and Karnataka High Courts denied relief to unsuccessful parties, reasoning that post-award interim measures exist to protect the "fruits of arbitral proceedings" a benefit only the award-holder can claim. The Telangana, Gujarat, and Punjab & Haryana High Courts took the opposite view: the statutory expression "a party" in Section 9 makes no distinction between winners and losers.

A bench of Justices Manoj Misra and Manmohan resolved the conflict. The Court held that Section 9, read in its entirety, confers interim protection "before, during, or after" arbitral proceedings, but before enforcement under Section 36. The expression "a party" cannot be judicially cut down to mean "a successful party" when Parliament made no such qualification.

"In rare and compelling cases, permitting the unsuccessful party to invoke Section 9 of the Act would prevent irreparable prejudice and preserve the efficacy of the challenge proceedings. Denying such remedy altogether would be inconsistent with the statutory scheme and could render eventual success in challenge proceedings illusory."

The Court was careful to qualify the holding. The threshold for grant of relief to an unsuccessful party is higher than in the ordinary case. Courts must exercise "care, caution and circumspection" when dealing with such applications. The test remains: prima facie case, balance of convenience, and likelihood of irreparable harm.

What this means in practice: Award debtors challenging an award under Section 34 now have a clear statutory basis to seek protective orders under Section 9. The "fruits of arbitral proceedings" doctrine that had gained traction in Bombay and Delhi is no longer good law. The ruling also reflects a wider development in Indian arbitration, the Supreme Court's 2025 ruling in Gayatri Balasamy v. ISG Novasoft (2025 INSC 605) confirmed that awards can be modified or severed, meaning an "unsuccessful" party might later partially succeed. That possibility makes interim protection during pending Section 34 proceedings substantively important.

3.Section 33 Is Not a Second Chance

Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd.

Decided: 26 May 2026 | Justices P.S. Narasimha and Alok Aradhe

This judgment addresses two issues of recurring practical importance: waiver of procedural objections through active participation, and the scope of the Section 33 correction mechanism.

A. Participation Without Objection Amounts to Waiver

The Gujarat Water Supply and Sewerage Board participated fully in the arbitral proceedings. It failed to object to the arbitrator's mandate during the proceedings. Only after the award went against it did the Board seek to challenge that mandate.

The Court refused. A party that participates in proceedings without objection cannot mount a post-award challenge to the arbitrator's authority. Having been given sufficient opportunities to present its case, the Board had only itself to blame for any procedural prejudice it claimed to have suffered.

B. Section 33 Does Not Permit Substantive Modification

The Board also sought modification of the award through a Section 33 application targeting the method of calculating interest specifically, converting simple interest to compound interest. The arbitral tribunal had granted the Section 33 application but changed the interest computation method in the process.

That modification was challenged.

The Court held that Section 33(1)(a) confines the tribunal to correcting "clerical, typographical, and computational errors". Changing the method of calculating interest is not a correction of an error. It alters a substantive determination already made by the tribunal. The modification was beyond the tribunal's Section 33 jurisdiction and was therefore set aside.

What this means in practice: Parties dissatisfied with an award cannot use Section 33 as a low-cost appeal mechanism. Corrections under that provision are limited to obvious errors of transcription or arithmetic. Any challenge to the tribunal's reasoning, methodology, or substantive conclusions must go through Section 34. Confusing the two routes, or using one as a substitute for the other, will fail and may cost time otherwise available for the Section 34 window.

4.Limitation Follows the Section 33 Disposal Date

 NHAI v. T. Younis & Anr. (2026 INSC 616)

Decided: 2 June 2026

The facts arose from a National Highways Act acquisition. The arbitral tribunal passed a fresh award on 3 February 2022 following a High Court remand. NHAI filed a Section 33(1)(a) application on 8 March 2022 seeking corrections. The respondent filed a cross-application under Section 33(4) seeking an additional award. On 4 July 2022, the tribunal dismissed both applications. NHAI received certified copies only on 15 September 2022.

NHAI then filed a Section 34 application. The Karnataka High Court held that the limitation period under Section 34(3) runs from the date the Section 33 application is disposed of - but only if the Section 33 application was maintainable. Since it found NHAI's Section 33 application not maintainable, the High Court counted limitation from the date NHAI received the certified copy of the award, and dismissed the Section 34 applications as time-barred.

The Supreme Court rejected that reading. Section 34(3) creates a clear and unconditional rule. Once a party files an application under Section 33, the limitation period for Section 34 purposes runs from the date the Section 33 application is disposed of - regardless of whether the application succeeds, fails, or is held not maintainable.

The Court added one important caveat: where a Section 33 application is found to be sham, frivolous, or malafide - filed purely to manipulate the limitation window - the court may impose exemplary and punitive costs. The statutory benefit remains; the abuse invites sanction.

What this means in practice: Practitioners managing the post-award phase must track two dates precisely: the date the certified copy of the award is received and, if a Section 33 application has been filed, the date of its disposal. A Section 34 application filed while a Section 33 application remains pending risks creating the "multiplicity of proceedings and procedural uncertainty" the Court warned against. And filing a Section 33 application that appears tactical - solely to extend the Section 34 window - may attract costs even if it ultimately does not work.

5.High Courts Must Know Their Limits

Ankhim Holdings Pvt. Ltd. v. Zaveri Construction Pvt. Ltd. (2026 INSC 137)

Decided: 4 February 2026 | Justices J.B. Pardiwala and K.V. Viswanathan

Ankhim Holdings and Zaveri Construction formed a partnership firm, M/s Anmol Alliance, to develop a Slum Rehabilitation Authority (SRA) project Andheri Shiv Shakti CHS in Andheri West, Mumbai. When disputes arose, Ankhim Holdings filed a Section 9 petition in 2019. The Bombay High Court recorded consent terms and appointed a former Chief Justice of the Calcutta High Court as sole arbitrator.

On 26 September 2019, the NCLT Mumbai admitted Zaveri Construction into Corporate Insolvency Resolution Proceedings, imposing a moratorium under Section 14 of the IBC. Arbitral proceedings continued intermittently. In October 2023, the sole arbitrator terminated the proceedings after the parties failed to pay arbitral fees. Ankhim Holdings then petitioned the Bombay High Court under Section 15(2) of the A&C Act for substitution of the arbitrator.

The Bombay High Court substituted the arbitrator. So far, so good. But it went further: it declared all arbitral proceedings held between 17 March 2022 and 25 August 2022 to be a nullity, on the ground that those hearings occurred during the IBC moratorium.

The Supreme Court set aside that second step. A petition under Section 15(2) for substitution of an arbitrator does not carry with it the power to invalidate prior arbitral proceedings or declare earlier orders a nullity. The High Court had exceeded its jurisdiction by acting as a reviewing authority. Section 15(2) must be read with Sections 15(3) and 15(4), which preserve the continuity of proceedings before the substitute arbitrator.

Recognising the long passage of time and the creation of third-party rights (the tribunal had permitted certain flat sales), the Supreme Court invoked Article 142 of the Constitution to declare those sale transactions lawfully valid.

What this means in practice: Practitioners dealing with arbitrations that straddle IBC moratorium events must map their remedies carefully. The question of whether proceedings during a Section 14 moratorium are valid has distinct channels for resolution. A Section 15(2) substitution application is a procedural mechanism. It cannot be converted into a collateral attack on the substantive record. Challenges to prior proceedings or awards must go through Section 34. The Supreme Court's use of Article 142 also underscores the importance of tracking third-party rights that crystallise during a prolonged arbitration those interests may prove decisive even if the proceedings themselves were legally contested.

6.The Pattern

Read together, these five decisions reveal a consistent judicial posture in H1 2026. The Supreme Court repeatedly reinforced the boundaries of its own intervention and those of lower courts. The recurring themes are:

1. Words in an arbitration clause matter "can" is not "shall", and permissive drafting cannot be cured by contextual argument.
2. Section 9 protects the arbitral process, not only the award-holder even the losing party can seek interim relief in rare and compelling circumstances.
3. Section 33 corrects errors, not decisions substantive challenges belong in Section 34.
4. Limitation under Section 34(3) runs from the Section 33 disposal date unconditionally, regardless of the outcome of the Section 33 application.
5. High Courts exercising jurisdiction under Section 15(2) cannot nullify prior proceedings that requires a Section 34 challenge.

India's arbitration ecosystem has long carried the burden of excessive judicial intervention. These rulings suggest the Supreme Court is actively correcting that. For practitioners, each judgment reinforces a fundamental discipline: choose the right remedy, invoke it at the right stage, and do not expect courts to excuse a failure to follow the statutory roadmap.