Court dismisses objections of Dilip Buildcon Limited and appoints Justice K.K. Trivedi as arbitrator in the commercial dispute with SS Associates.
In a significant ruling, the Madhya Pradesh High Court, Jabalpur bench, presided by Justice Vivek Jain, has decided in favor of SS Associates by appointing an arbitrator to resolve the ongoing commercial dispute with Dilip Buildcon Limited. The decision, handed down on April 6, 2026, came in the wake of objections raised by Dilip Buildcon, which cited lack of amicable settlement attempts and alleged criminal activities by SS Associates as barriers to arbitration.
The case, filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, revolved around the appointment of an arbitrator to adjudicate disputes stemming from purchase orders between the two parties. The arbitration clause in question did not stipulate a specific process for amicable settlement, a point of contention for the respondents.
Dilip Buildcon had argued that attempts at amicable settlement were necessary before arbitration could commence, and cited criminal allegations against SS Associates, including fraud and forgery, as grounds to block arbitration. However, the court found that no specific amicable settlement process was mandated by the arbitration clause, and noted that the respondent's actions, including police complaints, negated the possibility of an amicable settlement.
Justice Jain clarified that arbitration could proceed despite parallel criminal allegations, provided these allegations were in personam rather than in rem. The court referenced several precedents, including Vidya Drolia v. Durga Trading Corporation and Avitel Post Studioz Ltd. v. HSBC PI Holdings, which uphold the principle that commercial frauds between private parties are arbitrable.
Consequently, the court appointed Justice Shri K.K. Trivedi, a former judge of the High Court of M.P., Jabalpur, as the sole arbitrator. The parties are required to appear before the arbitrator on April 28, 2026, with the Registrar (Judicial-I) tasked to obtain the necessary consent and disclosures from the arbitrator by April 24, 2026. The case will be listed for further proceedings on April 27, 2026, should there be any delays in obtaining consent.
Bottom Line:
Appointment of arbitrator under Section 11(6) of Arbitration and Conciliation Act, 1996 - Criminal allegations against petitioner do not prevent arbitration unless they are allegations in rem - Arbitration clause unconditional regarding amicable settlement process.
Statutory provision(s): Arbitration and Conciliation Act, 1996, Section 11(6); Bharatiya Nyaya Sahita (referenced in allegations).
