Reinforcing the principle of minimal judicial interference in arbitration, the Supreme Court has held that High Courts should exercise extreme caution before entertaining challenges under Article 227 of the Constitution against orders passed by arbitral tribunals under Section 16 of the Arbitration and Conciliation Act, 1996. The Court ruled that such intervention is permissible only where there is a clear and patent lack of inherent jurisdiction.
Allowing the appeals filed by Manash Kamal Bezboruah, the Court set aside two orders of the Gauhati High Court that had stayed proceedings against certain respondents and held a revision petition under Article 227 to be maintainable.
Background of the Case
The dispute traces its origins to a long-standing partnership in a tea business and subsequent disagreements over the management of partnership assets and related companies. In 2012, the appellant instituted a civil suit seeking rendition of accounts and raising allegations relating to the affairs of the partnership and associated companies.
The trial court had earlier refused to refer the matter to arbitration because several defendants were not signatories to the arbitration agreement. That decision was upheld by the Gauhati High Court.
However, in November 2024, the Supreme Court, acting on the consent of the parties before it, referred the dispute to arbitration and appointed Justice (Retd.) B.P. Katakey as the sole arbitrator. Arbitration proceedings commenced accordingly.
During arbitration, M/s Bokahola Tea Company Private Limited and two related companies sought deletion of their names from the proceedings on the ground that they were non-signatories to the arbitration agreement. The arbitral tribunal rejected their applications, observing that the Supreme Court had already referred all disputes to arbitration.
The companies then approached the Gauhati High Court under Article 227, which stayed notices issued to them and later held that the revision petition was maintainable.
Court's Observations
A Bench of Justice K.V. Viswanathan and Justice Vijay Bishnoi examined whether the High Court was justified in exercising supervisory jurisdiction at this stage of the arbitral proceedings.
The Court explained that while the High Court's constitutional powers under Article 227 cannot be completely excluded, they must be exercised sparingly in arbitration matters because the Arbitration Act is designed to ensure speedy dispute resolution with minimal court interference.
Referring to earlier decisions including SBP & Co., Deep Industries, Punjab State Power Corporation, and Tarini Prasad Mohanty, the Bench reiterated that a challenge to an arbitral tribunal's ruling on jurisdiction under Section 16 ordinarily has to wait until the final award, when it can be questioned under Section 34 of the Act.
The Bench observed:
“The High Court must exercise extreme circumspection while invoking its supervisory jurisdiction under Article 227 of the Constitution of India.”
The Court further noted that interference at an interim stage is justified only where there is a patent lack of inherent jurisdiction that is apparent on the face of the record.
Non-Signatory Issue Left to the Tribunal
The Supreme Court also addressed the objection raised by Respondent Nos. 1 to 3 that they were not signatories to the arbitration agreement.
Relying on the Constitution Bench decision in Cox and Kings Ltd., the Court observed that deciding whether a non-signatory is a "veritable party" to an arbitration agreement involves factual and legal examination. Such an inquiry falls within the arbitral tribunal's jurisdiction under the doctrine of kompetenz-kompetenz, which empowers the tribunal to decide questions relating to its own jurisdiction.
The Bench held that the arbitral tribunal was competent to examine this issue and that its order rejecting the jurisdictional challenge ought not to have been challenged before the High Court under Article 227.
Court Criticises Multiple Rounds of Litigation
The Court also noted that Respondent Nos. 1 to 3 had been parties to the earlier proceedings before the Supreme Court but chose not to contest the arbitration reference or seek modification or review of the Court's order.
According to the Bench, raising objections at a later stage resulted in avoidable litigation and delayed the arbitration process, contrary to the object of the Arbitration Act.
Decision
Allowing the appeals, the Supreme Court set aside the Gauhati High Court's interim order dated 2 September 2025 and its order dated 28 January 2026. The Court also dismissed the revision petition filed before the High Court.
At the same time, the Bench directed the arbitral tribunal to independently decide the respondents' objection regarding their status as non-signatories, without being influenced by the Supreme Court's observations, and to conclude the arbitration proceedings expeditiously in accordance with law.
Case Details:
Case Title: Manash Kamal Bezboruah vs. M/s Bokahola Tea Company Private Limited & Ors.
Case Number: Civil Appeal Nos. … of 2026 (Arising out of SLP (Civil) Nos. 7233–7234 of 2026)
Judge: Justice K.V. Viswanathan and Justice Vijay Bishnoi
Decision Date: 14 July 2026
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