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2025 Supreme(Online)(SC) 25

SUPREME COURT OF INDIA
HON'BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA, HON'BLE MR. JUSTICE MANOJ MISRA
SEROSOFT SOLUTIONS PVT LTD – Appellant
Versus
DEXTER CAPITAL ADVISORS PVT LTD – Respondent
C.A. No.-000051-000052 - 2025



The High Court improperly intervened in arbitration proceedings, as the Tribunal had already provided sufficient opportunities for cross-examination, emphasizing the need for judicial restraint.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 18 - Supervisory jurisdiction of High Court under Article 227 - The High Court improperly intervened in arbitral proceedings by allowing further cross-examination of a witness despite the Tribunal's rejection of such a request - The Tribunal provided ample opportunity for cross-examination, and the High Court's decision lacked justification for interference. (Paras 12, 14, 16)

(B) Judicial restraint - The High Court must exercise caution in interfering with the arbitral process, only intervening in cases of clear perversity and avoiding excessive judicial interference. (Paras 14, 15)

Facts of the case:
The appellant and respondent entered into a Client Service Agreement leading to arbitration due to payment disputes. The Tribunal had allowed sufficient cross-examination opportunities, which the High Court later interfered with.

Findings of Court:
The Tribunal had given ample opportunity for cross-examination, and the High Court's interference was unwarranted.

Issues: The main issue was whether the High Court correctly exercised its supervisory jurisdiction in allowing further cross-examination despite the Tribunal's earlier ruling.

Ratio Decidendi: The court held that the Tribunal had already provided adequate opportunity for cross-examination, and the High Court's interference was unjustified, emphasizing the need for judicial restraint in arbitration matters.

Result: Appeals allowed and High Court orders set aside.

J U D G M E N T

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. The appellant and the respondent are parties in a pending arbitration. The question for consideration is whether the High Court has correctly exercised its supervisory jurisdiction under Article 227 in granting the respondent/claimant one more opportunity to cross- examine appellant/respondent’s witness, despite the Arbitral Tribunal rejecting such a prayer.

3. The brief facts leading to the present appeals are as follows. The appellant/respondent, a startup company providing educational software and related services, and the respondent/claimant, a provider of capital advisory services to various companies, entered into a Client Service Agreement. Under this agreement, the respondent/claimant was to provide advisory services to the appellant/respondent. Disputes arose between the parties with respect to non-payment of fee for the services rendered by respondent/claimant to appellant/respondent company, prompting respondent/claimant to invoke dispute resolution mechanism through arbitration.

4. Following the constitution of the Arbitral Tribunal, proceedings commenced, and parties submitted their respective statements of claim and defence. The Tribunal, by its order dated 06.09.2023 formulated the specific issues for consideration that needed to be addressed, by the parties to proceedings.

Following the said order, respondent/claimant side produced two witnesses CW-1 and CW-2. The counsel for the appellant/respondent cross-examined CW-1 on 17.11.2023 and asked about 22 questions on that day. However, due to time constraints, the cross-examination was deferred and rescheduled for 21.11.2023. On that date, the cross-examination of CW-1 was completed. On that very day cross of CW-2 was taken up and completed over the course of two sessions.

5. After the cross-examination of respondent/claimant’s witnesses got concluded, cross-examination of appellant/respondent’s witness RW-1 commenced. This is where the trouble began.

6. On 09.12.2023 a total of 9 questions were put to RW-1, as is evident from the record of proceedings of the Tribunal. The cross- examination of RW-1 was then deferred to 10.02.2024.

6.1 On 10.02.2024, though the cross commenced at 11 am and continued till 07:00 p.m., respondent/claimant’s counsel sought permission of the Tribunal to defer the cross-examination of RW-1 to some other day and sought an additional hour for completing the cross- examination of RW-1. By its order dated 10.02.2024 the Tribunal acceded to respondent/claimant’s request for additional one hour of cross-examination. The Tribunal’s order notes that the case was reluctantly adjourned to 06.04.2024 for conclusion of the cross.

7. It is alleged that, due to various applications for discoveries and interrogatories filed by the respondent/claimant, the cross- examination of RW-1 was cancelled on 06.04.2024. The proceedings kept on being delayed and the parties consensually extended the mandate of the Tribunal by 6 months which was due to expire on

16.05.2024 as per Section 29A of the Act. Ultimately, the proceedings resumed with cross-examination of RW-1 on 01.10.2024, where a total to the Tribunal to grant further opportunity to the 28 questions were put to him. The Tribunal in the record of proceedings noted that the cross-examination of RW-1 stands concluded and accordingly, the witness was discharged.

8. After two days, i.e. on 03.10.2024, respondent/claimant moved an Interlocutory Application before the Tribunal seeking extension of time for cross-examination of RW-1. Tribunal heard the parties on the said application and by its order dated 09.10.2024 noted that arbitral proceedings were time bound and in fact the extended mandate was also to expire soon. The Tribunal also noted that despite exhausting twice the allotted time for cross-examination of RW-1, the respondent/claimant’s approach reflected lack of preparedness and a non-serious attitude. With this view of the matter the

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