Arbitration and Conciliation Act – High Court Cannot Interfere under Article 227 to Grant Further Cross-Examination Once Tribunal Has Concluded
Case Name: Serosoft Solutions Pvt. Ltd. v. Dexter Capital Advisors Pvt. Ltd.
Citation: Civil Appeal Nos. 51–52 of 2025 (arising out of SLP (C) Nos. 26441–26442 of 2024); 2025 INSC 26
Date of Judgment: 3 January 2025
Bench: Justice Pamidighantam Sri Narasimha and Justice Manoj Misra
Held: The Supreme Court held that the High Court erred in exercising its supervisory jurisdiction under Article 227 of the Constitution to grant a claimant one more opportunity to cross-examine a witness after the Arbitral Tribunal had concluded such cross-examination. It reiterated that judicial interference with arbitral proceedings is permissible only where the Tribunal’s order is perverse on the face of the record or reflects bad faith. Prolonged cross-examination spread over multiple hearings already provided sufficient opportunity, and the High Court’s intervention undermined the efficiency and finality of arbitration.
Summary: The dispute arose from a client service agreement under which the respondent (Dexter Capital) was engaged to provide advisory services to the appellant (Serosoft Solutions), a startup in the education sector. When disputes over unpaid fees arose, arbitration was invoked. The Tribunal framed issues on 06.09.2023 and heard witnesses on both sides. The respondent’s witnesses were cross-examined extensively across two sessions. The appellant’s witness (RW-1) was cross-examined first on 09.12.2023, then for a full day on 10.02.2024 when 104 questions were asked, and finally on 01.10.2024 for more than two hours, after which the Tribunal recorded that the cross-examination was concluded.
On 03.10.2024, the respondent sought yet another opportunity to cross-examine RW-1. The Tribunal, by order dated 09.10.2024, rejected this, noting that over 12 hours had already been consumed, that the Tribunal’s mandate under Section 29A was close to expiry, and that the respondent’s counsel showed lack of preparedness. The respondent challenged this under Article 227 before the Delhi High Court, which directed that one further opportunity be given.
The Supreme Court found that the High Court had no justification for interfering. It emphasized that Section 18 of the Arbitration and Conciliation Act, 1996 ensures equal treatment of parties and full opportunity, but this had already been provided. Referring to the Delhi High Court’s own precedent in Kelvin Air Conditioning & Ventilation Systems Pvt. Ltd. v. Triumph Realty Pvt. Ltd. (2024), it observed that Article 227 powers should be used only in cases of glaring perversity or bad faith. Here, the Tribunal’s order was well-reasoned and consistent with the need for expeditious arbitration.
Decision: The Supreme Court allowed the appeals, set aside the Delhi High Court’s order dated 25.10.2024 in CM(M) 3711/2024 and CM Appl. 63047/2024, and restored the Tribunal’s order dated 09.10.2024 rejecting further cross-examination. It directed the Tribunal to resume proceedings and conclude the arbitration expeditiously.