The Supreme Court clarified that an Arbitral Tribunal's jurisdiction encompasses all disputes arising from a contract unless expressly limited, and failure to issue a notice under Section 21 of the Act is not fatal to claims arising from an arbitration agreement.

JUDGMENT :

K.V. Viswanathan, J.

1. Leave granted.

2. The present appeal calls in question the correctness of the judgment dated 07.01.2025 passed by the Division Bench of the High Court of Kerala at Ernakulam in Arbitration Appeal No. 56/2012. By the said judgment, the Division Bench of the High Court upheld the order of the District Judge, Thiruvananthapuram, dated 22.06.2010 in O.P. (Arb.) No.238 of 2006, al beit, on different grounds. The District Judge had set aside the award of the Arbitrator as being beyond the scope of reference and against the terms and conditions of the contract and restored the decision of the Adjudicator. The Adjudicator had, by his order of 14.08.2004, decided four disputes and held in favour of the appellant insofar as dispute Nos. 1 and 3 were concerned and against the appellant in relation to dispute Nos. 2 and 4.

3. The principal reason assigned by the High Court was that the Arbitral Tribunal was appointed at the request of the respondent-State to adjudicate on dispute no. (1) alone and the appellant never intended to raise any dispute regarding dispute nos. (2) to (4) by issuing a separate notice under Section 21 of the Arbitration and Conciliation Act, 1996 [for short “the A&C Act”]. The reasoning of the High Court is set out hereinbelow:-

25. We must bear in our mind that the arbitral tribunal was appointed at the request of the State to adjudicate on dispute no. (1) alone. The appellant never intended to raise any dispute regarding point Nos. (2) to (4) by issuing a separate notice under Section 21 of the Act. The assumption that where one-party files an application and gets an arbitrator appointed, the other party can raise all such disputes under the contract before the arbitrator is baseless, especially when the law governing the arbitration specifically provides that the arbitrator can decide only such dispute referred before him and not otherwise. To hold otherwise will certainly do violence to the statute. Hence, we find that the arbitral tribunal had clearly exceeded the jurisdiction in deciding the entire disputes. Perhaps the appellant was under a mistaken impression with regard to its right to have the entire disputes opened for arbitration. We must also note that the State was never put on notice regarding the intention of the appellant to go for arbitration. Even assuming that the contention of the appellant that the State had unequivocally agreed to arbitrate on the entire disputes, the tribunal ought to have framed an issue or given its finding on the jurisdiction as envisaged under Section 16. In the absence of any finding in this regard by the tribunal, we are afraid that the award in question clearly crossed the contours of the law and thus rendering itself to be inexecutable and falling within the mischief of Section 34 of the Arbitration and Reconciliation [sic] Act, 1996.”

4. It is the correctness of this decision, which the appellant has questioned before us in this appeal by way of special leave.

5. The facts lie in a very narrow compass:-

5.1 Four packages of Road Maintenance Contract were awarded to the appellant as part of the Kerala State Transport Project (KSTP) for development of roads in Kerala in collaboration with the World Bank. The work was awarded through competitive bidding.

5.2 The four projects awarded to the appellant were the following:-

“1. RMC 01” Thiruvananthapuram – Kottarakkara Road (5.70 to 25 KM)

2. RMC 03: Thodupuzha – Kalur – Ounukal Road (0.00 to 20 KM)

3. RMC 08: Kozikode – Mavoor Road (0.00 to 10.50 KM)

4. RMC 12: Quilandy – Thamarassery Road (0.00 to 29.30 KM)”

5.3 Under the General