Legal & Judicial Updates (February 2026)

NOTABLE JUDGEMENTS FEBRUARY 2026

ARBITRATION LAW

1. Case Title: Ankhim Holdings Pvt. Ltd. & Anr. Vs. Zaveri Construction Pvt. Ltd.

Citation: 2026 INSC 137

Court: Supreme Court

Decided on: 04.02.2026

Brief Facts:

• The Appellants and the Respondent had formed a partnership firm M/s Anmol Alliance for the development and construction of a real estate project in Mumbai.
• Disputes arose, and the Appellants initiated arbitration by way of a commercial arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996. The High Court of Bombay appointed Justice J.N. Patel (Retd.) as an arbitrator.
• Subsequently, the Respondent corporate debtor was admitted to insolvency proceedings and placed under moratorium by the NCLT under Section 14 of the IBC.
• Despite the moratorium, the arbitrator entertained certain applications (interim relief and execution-related applications) and made orders between 17 March 2022 and 25 August 2022. Based on these orders, the Appellants executed sale agreements for several flats.
• Later, the proceedings were terminated by the arbitrator. The Appellants filed an arbitration petition under Section 15(2) before the High Court seeking the appointment of a substitute arbitrator and extension of time to complete the award
• The Bombay High Court granted substitution of the arbitrator, but held that all arbitration proceedings conducted between 17 March 2022 and 25 August 2022 were nullities since they took place during a moratorium under Section 14 of the IBC.
• Aggrieved, the Appellants challenged the High Court's order before the Supreme Court under Article 136.

Issue:

Whether the High Court was justified in saying that the proceedings held by the Arbitral Tribunal on the seven relevant dates, i.e., from 17.03.2022 to 25.08.2022, were liable to be declared as nullity on the premise that those proceedings were undertaken during the period of moratorium under Section 14 of the IBC.

Judgement:

The Supreme Court, after hearing the parties and reviewing the relevant statutory provisions, allowed the appeal in part and clarified the law on the substitution of arbitrators and moratorium.

• The Court explained that the replacement of an arbitrator under Section 15(2) does not automatically invalidate all prior proceedings. The proper test is to examine whether the arbitration agreement or statutory framework requires such nullification. Sections 15(3) and (4) make it clear that prior hearings "may" be repeated at the discretion of the arbitral tribunal, subject to agreement between parties.
• The moratorium under Section 14 of the IBC does not ipso facto justify declaring all arbitral events as null and void. The mere pendency of a CIRP, without express prohibition under the IBC, does not erase the validity of procedural orders conducted during that period.
• The Court found that the High Court erred in mechanically treating the entire period of arbitration between March and August 2022 as null on account of the moratorium. Instead, only those actions that directly contravene statutory moratorium prohibitions should be considered suspect. Mere continuation of arbitration does not, by itself, render proceedings void.
• The Supreme Court allowed the appeal and remitted the matter with directions consistent with its interpretation of Sections 14 and 15 of the Act and the IBC, holding that the substitution of the arbitrator did not, in law, invalidate the prior proceedings automatically. Click Here

2. Case Title: C. Velusamy vs. K Indhera

Citation: 2026 INSC 112

Court: Supreme Court of India

Decided on: 3 February 2026

Brief Facts:

The dispute arose out of three agreements to sell executed between the Appellant C. Velusamy and the Respondent K. Indhera. Due to disagreements, arbitration was initiated, and the Madras High Court appointed a sole arbitrator on 19 April 2022. Pleadings were completed by 20 August 2022, beginning the 12-month statutory period under Section 29A of the Arbitration and Conciliation Act, 1996 for making the award. The parties, by consent, extended the arbitrator's mandate by another six months, setting the final deadline as 20 February 2024.

Despite this timeline, repeated adjournments occurred, including settlement discussions and other delays. Ultimately, the arbitrator delivered the award on 11 May 2024, which was after the extended mandate had expired. The arbitrator's mandate thus technically ceased on 20 February 2024.

The Respondent challenged the award under Section 34 of the Act, arguing that the arbitrator had no mandate when the award was issued. Simultaneously, the Appellant applied under Section 29A to the High Court seeking extension of the arbitrator's mandate even after the award was passed. The High Court dismissed the Section 29A application as not maintainable and consequently set aside the award.

Issue:

Whether a Court can entertain an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend the mandate of the arbitrator(s) for making the award even after an 'award' is rendered, though after the expiry of the statutory limit of eighteen-month period?

Judgement:

• The Supreme Court allowed the appeal and clarified the law on Section 29A of the Arbitration and Conciliation Act:
• The Court held that an application under Section 29A(5) for extension of the arbitrator's mandate is maintainable even if filed after the expiry of the statutory period and even after an award is delivered. The expression "if an award is not made" in Section 29A(4) does not oust the court's jurisdiction to extend the mandate retrospectively.
• An award passed after the expiry of the arbitrator's mandate is not automatically void. Such an award is unenforceable under Section 36 of the Act until the court extends the mandate. However, delay or timing alone does not deprive the court of jurisdiction to entertain the extension application.
• The Court emphasised that Section 29A is designed to ensure that arbitration reaches its logical conclusion rather than allowing procedural timelines to abort the process. The court may impose conditions when granting an extension, such as:
  • reduction of arbitrator's fees,
  • imposition of costs,
  • substitution of arbitrators, or
  • specific terms for further proceedings.
• The judgment reiterated that judicial intervention under Section 29A is intended to discipline arbitral timelines while preserving the integrity and purpose of arbitration. Click Here

3. Case Title: Viva Highways Ltd vs. Madhya Pradesh Road Development Corporation Ltd & Anr.

Citation: 2026 LiveLaw (SC) 145

Court: Supreme Court

Decided on: 06.02.2026

Brief Facts:

The Appellant, Viva Highways Ltd., challenged an interim order passed by the High Court of Madhya Pradesh on 02 December 2025 in Commercial Court Case (MCC) No. 2699/2025. The High Court had declared the mandate of the existing arbitrator in ongoing arbitration proceedings to be terminated and directed the parties to propose the name of a new arbitrator for appointment.

The High Court's interim order was based on its interpretation of the Supreme Court's earlier decision in Mohan Lal Fatehpuria v. M/s. Bharat Textiles & Ors. (2025), wherein it was held that an appointment of an arbitrator under Section 29A(6) of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") entailed an obligation on the court to substitute the arbitrator under certain circumstances.

The Appellant contended that the High Court had misinterpreted the ratio of Mohan Lal Fatehpuria and erred in terminating the mandate of the arbitrator when no ground for substitution existed. The Appellant maintained that the mandate of the arbitrator had not expired and no valid application seeking extension or termination had been made before the proper forum.

Issue:

Whether the High Court was justified in terminating the mandate of the existing arbitrator and directing appointment of a new arbitrator on the basis of a misconstrued interpretation of the court's earlier pronouncement in Mohan Lal Fatehpuria and whether such a substitution was legally warranted in the circumstances of the case.

Judgement:

The Supreme Court allowed the appeal and set aside the impugned order dated 02 December 2025 of the High Court and held the following:

• The High Court's interpretation of the decision in Mohan Lal Fatehpuria was incorrect. The Supreme Court clarified that the expression in paragraph 13 of Mohan Lal Fatehpuria did not mandate automatic substitution of an arbitrator's mandate merely because Section 29A(6) of the Arbitration Act refers to the appointment of an arbitrator. Rather, substitution arises only where the situation so warrants, such as when the arbitrator's mandate has genuinely terminated or expired.
• Merely referring to Section 29A(6) does not imply that an arbitrator's mandate stands terminated in all cases or that a new arbitrator must be appointed as a matter of course. The High Court had, therefore, erred in treating substitution as an inevitable consequence without a proper application or statutory justification.
• The Supreme Court also relied on subsequent clarification in C Velusamy v. K. Indhera and Jagdeep Chowgule v. Sheela Chowgule & Ors. that Section 29A does not require automatic substitution of an arbitrator's mandate in every case and that the commercial court should be guided by the statutory scheme and facts of each case.
• In consequence, the High Court's interim order terminating the mandate of the arbitrator was quashed and set aside. The appeal was disposed of accordingly, and the matter was remitted to the Commercial Court, Bhopal, which is directed to deal with the application for extension of the arbitrator's mandate expeditiously and on its own merits and in accordance with law. The Supreme Court expressly stated that it had not expressed any opinion on the merits of the extension application itself. Click Here

4. Case Title: M/s Eminent Colonisers Private Limited versus Rajasthan Housing Board and Ors.

Citation: 2026 LiveLaw (SC) 109.

Court: Supreme Court

Decided on: 04.02.2026

Brief Facts:

• The Appellant (Eminent Colonizers Pvt. Ltd.) entered into a contract in 2009 with the Rajasthan Housing Board for construction of residential flats at Jaipur for a lump-sum contract value.
• A dispute arose regarding non-payment of escalation costs under Clause 45 of the contract and the constitution of the empowered Standing Committee under Clause 23 for dispute resolution.
• The Appellant filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, before the High Court of Rajasthan for appointment of an arbitrator because the Respondent failed to constitute the Standing Committee as required.
• The High Court appointed an arbitrator in 2014 (before the 2015 Amendment) under the pre-amendment regime. The Respondent accepted this order, which attained finality.
• The arbitrator rendered an award in 2015 in favour of the Appellant. Subsequently, the Respondent challenged the award under Section 34 of the Act, contending that Clause 23 did not constitute an arbitration clause.
• Both the trial Commercial Court and the High Court upheld the objection that Clause 23 was not an arbitration agreement, and set aside the award. Aggrieved, the Appellant filed the present appeal before the Supreme Court.

Issue:

The question for consideration that arose was considering that the appointment of the arbitrator in this case was in the SBP & Co. (supra) regime and before the legislative amendments which came into effect from 23.10.2015, were the courts below justified in setting aside the award by holding that Clause 23 of the contract was not an arbitration agreement?

Judgement:

The appeal was allowed. The Supreme Court held that:

• Under the pre-2015 amendment regime (governed by the judgment in SBP & Co. v. Patel Engineering Ltd.), a court considering an application under Section 11 had to determine both the existence and validity of an arbitration agreement before appointing an arbitrator.
• Once an order appointing an arbitrator under Section 11 attains finality (i.e., is not challenged), it operates as res judicata between the same parties on the question of the existence and validity of the arbitration agreement.
• The Supreme Court distinguished between precedent (which operates in rem) and res judicata (which operates in personam), clarifying that res judicata binds the same parties where the issue has been finally decided.
• The appointment order dated 23 May 2014 under Section 11 was passed before the introduction of Section 11(6A) by the 2015 Amendment. At that time, the Section 11 court wasrequired to determine both the existence and validity of the arbitration clause before appointing an arbitrator.
• The Respondent accepted the appointment order and did not challenge it, so the finding on the existence and validity of the arbitration agreement (Clause 23) became final as between the parties.
• Consequently, the Respondent could not be permitted later to contest the existence of the arbitration clause in Clause 23 during Section 34 proceedings.
• The courts below erred in holding that Clause 23 was not an arbitration clause and in setting aside the arbitral award on that ground.
• As the Section 11 order was finally accepted and had attained res judicata effect, the validity of Clause 23 could not be reopened. Click Here

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