AKP Dispute Resolution Digest June 01, 2026

We are delighted to share this month's AKP Dispute Resolution Monthly Digest. Please feel free to write to us with your feedback at info@akandpartners.in.

1.           Arbitration and Conciliation

1.1.       Mining Industry

1.1.1.   The Hon’ble Supreme Court holds that an unstamped Arbitration Agreement survives, and any objections must first be raised before the Arbitrator

The Supreme Court has held that an arbitration agreement does not become invalid merely because it is unstamped or insufficiently stamped. The Hon’ble Division Bench ruled that such defects are curable and that the arbitral tribunal has the primary jurisdiction to deal with stamping objections, not the High Court. The Hon’ble Court emphasised that the agreement remains legally operative despite the stamping defect and that the deficiency can be rectified at any stage, after which the document becomes fully admissible. The arbitral tribunal's rejection of a stamping objection may be challenged only after the final award, in keeping with the principle of minimal judicial interference during arbitration proceedings. The dispute arose from an iron ore sale agreement dated February 12, 2004, between an individual mine owner and Sunflag Iron and Steel Company Limited. After the Petitioner raised a stamping objection during arbitration in February 2024, the sole arbitrator rejected it in May 2024. The Petitioner challenged this before the Orissa High Court, where a single judge initially upheld his objection, but the Division Bench reversed that order. The Hon’ble Supreme Court dismissed the Petitioner's appeal, holding that the Single Judge had exceeded writ jurisdiction by entering into the merits of the dispute while the arbitration was still pending. The Hon’ble Division Bench confirmed that the Division Bench of the High Court was justified in restoring the Tribunal's order and left the parties free to raise the stamping issue post-award.

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1.2.       Construction

1.2.1.   Supreme Court declines to set aside a “Patently Illegal” Arbitral Award and instead modifies the relief granted

The Supreme Court declined to set aside an arbitral award even after finding it patently illegal, opting instead to modify it directly to bring finality to a dispute that has been pending since 2012. The Hon’ble Division Bench held that setting aside the award at this stage would compel the parties to restart litigation from scratch, causing further hardship and delay. The case arose from a reconstruction agreement dated April 9, 2010, under which the builder agreed to reconstruct the owners' property within 14 months. The builder abandoned construction in August 2011, leading the owners to terminate the agreement in November 2011. The disputes were referred to arbitration pursuant to a Delhi High Court order in 2012. The Arbitrator held the builder liable for breach and awarded INR 72 lakh in delay compensation to the owners, while also directing the refund of amounts paid and awarding the construction costs to the builder. After rounds of litigation before the Delhi High Court, the Division Bench denied the owners all compensation, finding no separate proof of loss. The Hon’ble Supreme Court disagreed, holding that contractual penalty clauses themselves demonstrate implied loss, making separate proof unnecessary. The Hon’ble Supreme Court recalculated the owners' entitlement to INR 6.30 lakh for 63 days of delay and directed the owners to pay INR 25.62 lakh to the builder's legal heirs. Invoking Article 142 of the Constitution to do complete justice, the Hon’ble Supreme Court modified the award rather than ordering a fresh round of arbitration.

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