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SUPREME COURT OF INDIA YET AGAIN PRESERVES INTEGRITY OF ARBITRAL PROCEEDINGS



In Serosoft Solutions Pvt. Ltd. v Dexter Capital Advisors Pvt. Ltd. (2025 INSC 26), the Supreme Court of India ('INSC') had another opportunity to express its position on the limits of High Courts' supervisory jurisdiction under Article 227 of the Constitution in arbitration-related matters.

Having examined the validity of the High Court's order overriding the Arbitral Tribunal's directions ('Order'), INSC found no justification for it, holding that curial intervention is permissible only when arbitrators' directions are 'completely perverse'.


ART. 227 OF THE CONSTITUTION AND ARBITRATION

According to Art. 227(1) of the Constitution, 'Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction'. Art. 227(1) was arguably designed to give Indian High Courts supervisory jurisdiction only over tribunals created by a statute (e.g. National Company Law Tribunal). However, in recent years, the reach of this constitutional provision has extended to Tribunals in arbitral proceedings seated in India. The most well-known example is a dispute between Amazon.Com NV Investment Holdings LLC and Future Retail Limited where an Indian party challenged (although unsuccessfully) procedural directions issued in a SIAC arbitration with an Indian seat.

FACTS

Dexter Capital Advisors initiated arbitration against Serosoft Solutions.

In arbitration, each Party submitted witness statements and were allowed to cross-examine witnesses.

The Claimant presented two witnesses, while the Respondent only one.

Following cross-examination of the Claimant's witnesses, Dexter Capital Advisors' counsel proceeded to cross-examine the Serosoft Solutions' witness. The first 'session' took place in December 2023 and was deferred until February 2024. Then, after almost a full day cross-examination, the Claimant requested one additional hour to complete the 'cross'.

The Arbitral Tribunal granted the Claimant's request.

For procedural reasons, cross-examination of the Respondent's witness resumed only in October 2024, when the Respondent's witness answered 28 more questions put by the Claimant's counsel. After that, the Arbitral Tribunal concluded cross-examination of the Serosoft Solutions' witness and discharged him. Yet, two days later, the Claimant requested extension of time for cross-examination.

The Arbitral Tribunal denied the Claimant's request, citing the time-bound nature of arbitration and 'the lack of preparedness and a non-serious attitude' in the Claimant's approach to cross-examination (¶8).

The Claimant challenged the Tribunal's order under Art. 227 of the Constitution, requesting the High Court to direct the Arbitral Tribunal to give another opportunity to cross-examine the Respondent's witness.

THE HIGH COURT'S ORDER AND THE APPEAL

Although the High Court 'noted that judicial interference in such type of matter was least warranted', it found that the circumstances of the case were exceptional and directed the Arbitral Tribunal 'to grant further opportunity' to cross-examine the Respondent's witness on the date and time fixed by the Tribunal (¶9).

The Respondent appealed the High Court's orders to the Supreme Court and the leave was granted.

INSC'S DECISION AND REASONING

Having considered the matter, the INSC found that:

  • despite citing the relevant authority, the High Court failed to consider whether:

    • there were exceptional circumstances warranting curial intervention; and

    • the Arbitral Tribunal's order was 'completely perverse' (¶16);

  • no such circumstances existed, and the Arbitral Tribunal's order was justified, since the Claimant had been given ample opportunities to cross-examine the Respondent's witness (¶17).

Against these findings, the INSC set aside the High Court's orders and directed the Tribunal to 'resume the proceedings and conclude the same as expeditiously as possible' (¶18).

CONCLUSION

While the chances of a successful challenge to the Arbitral Tribunal's procedural directions under Art. 227 of the Constitution are minimal, as the Serosoft Solutions judgment and earlier case law demonstrate, the 'constitutional appeal' is frequently used as part of dilatory tactics. Since changes to the Constitution and/or case law are unlikely, it may be advisable to have arbitral proceedings with nexus to India (be they international or domestic) seated outside India to ensure smooth and uninterrupted conduct of such.

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