AKP Dispute Resolution Digest May 04, 2026
- AK & Partners
- May 4
- 10 min read
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 Dispute Resolution
1.1. Retail & E-Commerce Law
1.1.1. Amazon & Future Group Dispute: Settlement Ends High-Stakes SIAC Challenge
The Delhi High Court recently permitted the withdrawal of petitions filed by Future Coupons Private Limited and its promoter entities, including Ashni Kishore Biyani, challenging an arbitral award passed under the Singapore International Arbitration Centre in their dispute with Amazon. The award held the Future Group entities in breach of contractual obligations. It directed them to pay INR 23.7 crore in damages, along with INR 77.3 crore and SGD 68,550 towards arbitration and litigation costs. However, in light of a settlement agreement dated March 13, 2026, the parties jointly sought withdrawal of the challenge filed under Section 34 of the Arbitration and Conciliation Act, 1996, which the Court allowed, disposing of the matter without examining the merits. The dispute originated from Amazon’s INR 1,400 crore investment in Future Coupons in 2019, granting it a 49 per cent stake and indirect rights in Future Retail Limited. In 2020, the Future Group entered into an INR 24,713 crore transaction with Reliance Retail Ventures Limited, which Amazon opposed on the grounds of contractual restrictions, triggering arbitration proceedings before SIAC. While Amazon claimed damages of INR 1,436 crore, the arbitral tribunal awarded a significantly reduced sum, noting the erosion in value of the investment due to financial distress and the impact of the COVID-19 pandemic. The eventual settlement and withdrawal of proceedings reflect a commercial resolution to one of India’s most high-profile arbitration disputes, reinforcing the growing preference for negotiated outcomes in complex cross-border commercial conflicts.
1.2. Construction
1.2.1. No Midway Challenge: Supreme Court Reinforces Arbitration Efficiency
In a significant reaffirmation of arbitration principles, the Supreme Court of India has clarified that parties cannot interrupt arbitral proceedings by challenging a tribunal’s rejection of a limitation-based jurisdictional objection at a midway stage. Instead, such objections must be raised only after the final arbitral award. The ruling arose from a dispute between MCM Worldwide Private Limited and the Construction Industry Development Council, stemming from agreements linked to a government-backed employment initiative. During arbitration, the Council argued that the claims were time-barred and thus outside the arbitrator’s jurisdiction. However, the arbitrator rejected this plea and proceeded with the case. Attempts to challenge this decision at an interim stage led to conflicting rulings across courts, ultimately reaching the apex court. The Court held that once a tribunal rejects a jurisdictional objection under Section 16, the arbitration must continue uninterrupted. Any challenge to such a decision can only be made under Section 34 after the final award is rendered.
Importantly, the Court distinguished between limitation as a standalone issue and limitation raised as a jurisdictional objection, cautioning against misinterpretation of earlier precedents such as Indian Farming Fertiliser Cooperative Limited v. Bhadra Products. By disallowing piecemeal challenges, the judgment reinforces procedural discipline and ensures that arbitration remains a swift and effective dispute resolution mechanism, free from unnecessary judicial interruptions.
1.3. Technology
1.3.1. Unilateral Arbitrator Appointment Invalid: Delhi High Court Reinforces Neutrality Mandate
In a significant ruling reinforcing the principles of impartiality in arbitration, the Delhi High Court has set aside a 2018 arbitral award in a dispute between PTC Techno Pvt. Ltd. and Samsung India Electronics Pvt. Ltd. The Court held that the appointment of the sole arbitrator by an official of one of the disputing parties was legally untenable and contrary to statutory safeguards. The dispute arose from a Mould Agreement and subsequent purchase arrangements under which Samsung supplied moulds to PTC for manufacturing. Following the termination of these agreements, disagreements arose over the return of the moulds, which eventually led to arbitration. Invoking a contractual clause, Samsung’s Vice President appointed a sole arbitrator, culminating in an award in 2018. However, the Court found that such a unilateral appointment violated Section 12(5) of the Arbitration and Conciliation Act, 1996, which mandates neutrality in the appointment process. It is reiterated that an employee or representative of a party cannot appoint an arbitrator unless both parties expressly waive this restriction through a clear written agreement. Importantly, the Court rejected the argument that participation in arbitral proceedings amounts to waiver. It clarified that a waiver under Section 12(5) must be explicit, unequivocal, and in writing, and cannot be inferred from conduct such as filing claims or attending hearings. Holding the appointment void from the outset, the Court declared the arbitral proceedings and resulting award a nullity. These rulings underscore the judiciary’s strict approach to ensuring fairness and independence in arbitration, sending a clear message against unilateral control over the arbitral process.
2. PMLA
2.1. Banking and Finance
2.1.1. Pre-Crime Transactions Off Limits: PMLA Tribunal Reins in ED in Yes Bank–DHFL Case
PMLA Tribunal Trims ED Action in Yes Bank-DHFL Case, Upholds INR 25 Crore Attachment. The Appellate Tribunal under the Prevention of Money Laundering Act, 2002, has partly set aside property attachments made by the Enforcement Directorate in the high-profile Yes Bank–DHFL INR 3700 crore transaction case, granting substantial relief to Avinash Bhosale and his entities. The tribunal, however, sustained attachment to the limited extent of INR 25 crore linked to a 2019 transaction. The case stems from allegations that funds from Yes Bank’s investment in Dewan Housing Finance Corporation Limited were diverted through intermediary entities. The ED had alleged that a portion of these funds ultimately reached entities beneficially owned by Avinash Bhosale, identified multiple transactions as proceeds of crime, and attached properties in Pune and Nagpur. In its ruling, the tribunal drew a clear distinction between transactions forming part of the alleged offence and those predating it. It held that transactions executed before the commission of the alleged crime and not referenced in the FIR or ECIR cannot be retrospectively scrutinised or treated as proceeds of crime. The tribunal observed that the investigating authority had exceeded its jurisdiction by attempting to interlink such independent commercial dealings. However, the tribunal upheld the attachment of INR 25 crore arising from a 2019 dairy-related transaction, noting inconsistencies in its structure and an unexplained delay of three years. This, it held, justified continued attachment under the statutory framework. As a result, attachment over properties valued at INR 25 crore, comprising land parcels in Pune fully and in Nagpur partly, remains in force. At the same time, all other attached assets stand released—the ruling underlines judicial limits on investigative overreach while reaffirming scrutiny over suspect financial structuring.
3. Consumer Law
3.1. Aviation
3.1.1. State Commission Enhances Compensation for Airlines’ Failure to Intimate Flight Rescheduling
The State Consumer Disputes Redressal Commission, Chandigarh, in Aayush Bansal & Anr. v. Tata Sia Airlines Ltd., Fint Appeal No. 42 of 2026, decided on 01.04.2026, dealt with the issue of airline liability arising from failure to inform passengers regarding the preponement of a scheduled international flight. The dispute arose when the complainants, having booked domestic and international tickets, including a return journey from Denpasar (Bali), reached the airport in accordance with the original schedule but were informed that their flight had already been postponed without any prior intimation. As a consequence, they were left stranded at a foreign airport. They were compelled to arrange alternative travel at a significantly higher cost, which resulted in missing their connecting domestic flight and incurring additional expenses. While the District Commission had rightly held the airline guilty of deficiency in service and granted a refund along with nominal compensation of INR 7,000, the complainants approached the State Commission seeking enhancement on the ground that the compensation awarded was grossly inadequate considering the extent of hardship suffered. The State Commission, upon appreciation of the facts, observed that timely communication of flight schedule changes is a fundamental obligation of an airline, and failure to do so, particularly in the context of international travel, constitutes a serious lapse. The Commission noted that the complainants were placed in a vulnerable situation in a foreign country, resulting not only in financial loss but also considerable mental agony, inconvenience, and uncertainty. It was further held that compensation under consumer jurisprudence must be realistic and proportionate to the hardship suffered and cannot be merely symbolic. Accordingly, while upholding the refund of INR 58,641/- with interest @ 9 per cent per annum, as granted by the District Commission, the State Commission enhanced the compensation to INR 50,000/- and further awarded litigation costs of INR 15,000/-, with penal interest in case of non-compliance. The ruling reinforces that consumer fora will intervene when the compensation awarded is not commensurate with the gravity of the service deficiency, particularly in cases involving international travel and passenger vulnerability.
3.2. Electronics Industry
3.2.1. Consumer Commission Directs Refund for Defective Product and Deficiency in After-Sales Service
The District Consumer Disputes Redressal Commission (East Delhi), in Vaibhav Singh Bhadana v. Fujitsu General India Pvt. Ltd., Consumer Complaint No. 238 of 2025, decided on 30.03.2026, examined the liability of a manufacturer in respect of a defective consumer durable and failure to provide effective after-sales service. The complainant had purchased a 3-ton split air conditioner for INR 1,14,000/-; however, from the very outset, the product suffered from multiple issues. The installation itself was problematic, requiring the complainant to arrange a separate stand, and upon actual usage, the AC failed to cool properly. Despite repeated complaints and numerous service requests over consecutive days, the issue remained unresolved. The technician’s conduct was also found to be unprofessional, causing further damage to the unit. Notably, the opposite party failed to appear or file any written statement, thereby leaving the complainant’s case unrebutted. The Commission, relying on the consistent record of complaints and the surrounding circumstances, held that the product suffered from inherent defects and that the manufacturer's failure to rectify the same despite repeated opportunities clearly amounted to a deficiency in service. The Commission further observed that even in the absence of technical expert evidence, the conduct of the opposite party and the persistent malfunction of the product sufficiently established the defect. Consequently, the Commission directed a refund of the entire amount of INR 1,14,000/-, along with interest at 7 per cent per annum from the date of filing of the complaint, subject to the return of the AC. In addition, compensation of INR 25,000/- for mental agony and litigation costs of INR 10,000/- were awarded, with enhanced interest liability in the event of default. The decision reiterates that manufacturing cannot evade liability where defects persist. Complaints remain unresolved, and that failure in after-sales service obligations independently constitutes an actionable deficiency under consumer law.
4. Insolvency & Bankruptcy
4.1. Banking & Finance
4.1.1. Supreme Court holds admission of claim by Resolution Professional does not amount to acknowledgement of debt
In Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd., the Supreme Court of India held that admission of a creditor’s claim by a Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP) does not constitute an acknowledgement of debt under Section 18 of the Limitation Act, 1963. The dispute arose when Omkara Asset Reconstruction Pvt. Ltd. sought to rely on the RP's admission of its claim in an earlier CIRP to argue that such admission extended the limitation period for initiating fresh insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016. The National Company Law Appellate Tribunal accepted this position and held that the application was within the limitation. Setting aside the NCLAT’s view, the Supreme Court clarified that the role of the RP is purely administrative, limited to collation and verification of claims, and does not involve adjudication of liability. The Court observed that admission of a claim by the RP is merely an entry or recording of a claim and is akin to a reference to an existing debt, which cannot be equated with a conscious acknowledgement of liability required under Section 18. The Court further reiterated that the limitation for initiating CIRP is governed by Article 137 of the Limitation Act and runs from the date of default. An acknowledgement capable of extending limitation must be clear, unequivocal, and made within the subsisting limitation period by the debtor itself. This ruling significantly impacts insolvency litigation strategy by clarifying that administrative acts within CIRP cannot revive time-barred debts, thereby reinforcing strict limitation discipline under the IBC.
4.2. Banking and Finance
4.2.1. Supreme Court holds corporate guarantee qualifies as financial debt under IBC
The Supreme Court has held that a corporate guarantee furnished by a company to secure borrowings of another entity constitutes a “financial debt” within the meaning of Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (‘IBC’). The case arose from insolvency proceedings involving a company that had issued guarantees in favour of lending for loans extended to its group entities. The lending sought recognition as financial crediting in the CIRP of the guarantor company. However, both the NCLT and NCLAT had declined to treat such guarantee-based liabilities as financial debt. The Supreme Court held that a corporate guarantee, particularly when backed by underlying financial arrangements such as loan facilities involving consideration for the time value of money, squarely falls within the ambit of “financial debt”. The Court emphasised that the liability of a guarantor is coextensive with that of the principal borrower, and such obligations are enforceable under law. The Court further clarified that the definition of financial debt under the IBC is broad and includes liabilities arising from guarantees in respect of borrowings. Consequently, lending holding such guarantees is entitled to be treated as financial crediting and participate in the Committee of Crediting. This ruling strengthens creditor rights in group financing structures and ensures that guarantee-backed obligations are fully recognised within the insolvency framework, thereby enhancing recovery mechanisms for lending.
4.2.2. Supreme Court flags systemic delays by NCLT in approving resolution plans and calls for nationwide data
In AVJ Heights Apartment Owner Association v. IIFL Finance Ltd. & Anr., the Supreme Court of India expressed serious concern over prolonged delays by the National Company Law Tribunal (NCLT) in approving resolution plans under the Insolvency and Bankruptcy Code, 2016 (‘IBC’), terming the situation “very unfortunate” and detrimental to the effectiveness of the insolvency framework. The issue came to light during proceedings in which approval of a resolution plan had remained pending for nearly 2 years before the NCLT. Taking note of this systemic problem, the Supreme Court observed that such delays undermine the core objective of the IBC, which is to ensure time-bound resolution of insolvency. The Court highlighted that delays in approval of resolution plans not only erode asset value but also frustrate stakeholders, including creditors and homebuyers. The Court further noted that a significant number of resolution plan approval applications were pending across NCLT benches, with delays extending from several months to multiple years, largely due to infrastructural constraints, shortage of members, and procedural inefficiencies. In response, the Supreme Court directed the NCLT Principal Bench and the Insolvency and Bankruptcy Board of India (IBBI) to furnish nationwide data on pending approval applications, including the duration of pendency and the reasons for delay. The Court also indicated that the issue requires urgent systemic intervention, potentially at an institutional level, to ensure that the insolvency process remains effective and aligned with legislative intent. This development is significant, as it signals heightened judicial scrutiny of institutional delays in insolvency proceedings and may lead to structural reforms to improve efficiency and timelines under the IBC.
Disclaimer
The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.
For further queries or details, you may contact:
Mr. Anuroop Omkar
Partner, AK & Partners
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