Court Declines Interim Relief to Kobelco Construction, Allows Future Determination of Arbitration Validity
In a recent judgment delivered on June 8, 2026, the Division Bench of the Calcutta High Court, comprising Justices Debangsu Basak and Md. Shabbar Rashidi, addressed the complex issue of arbitration agreement assignment between Kobelco Construction Equipment India Private Limited and Lara Mining. The case revolves around the validity of an arbitration agreement following the assignment of rights under two Master Facility Agreements initially executed between SREI Equipment Finance Limited and Lara Mining.
Kobelco Construction, the appellant, argued that the rights under the Master Facility Agreements were validly assigned to them through a settlement agreement with SREI Equipment Finance Limited, executed on July 17, 2021. The appellant contended that this assignment included the arbitration agreement, which should therefore be enforceable against Lara Mining.
The respondent, Lara Mining, challenged the existence of a valid arbitration agreement post-assignment and contended that the question of its validity should not be resolved in an interim relief application under Section 9 of the Arbitration and Conciliation Act, 1996. They argued that the Single Judge's findings, which dismissed the Section 9 petitions, were prima facie and not binding for future proceedings.
The Division Bench upheld the Single Judge's decision to dismiss the interim relief sought by Kobelco Construction, noting the appellant's failure to initiate proceedings under Sections 21 or 11 of the Arbitration Act during the pendency of the Section 9 application. The Court emphasized that the question of the arbitration agreement's validity remains open and can be addressed by the appropriate forum in future proceedings.
The judgment highlights the importance of timely procedural actions in arbitration-related disputes and underscores the non-final nature of interim findings on the existence of arbitration agreements. The Court's decision allows both parties the opportunity to litigate the validity of the arbitration agreement in subsequent, more appropriate forums.
Bottom line:-
Arbitration agreement - Whether an arbitration agreement can be considered valid and enforceable when the original agreement has been allegedly assigned to a third party - The issue of validity and existence of such arbitration agreement left open to be decided by the appropriate forum.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 9, 11, 21
