Serosoft Solutions Pvt. Ltd. versus Dexter Capital Advisors Pvt. Ltd

Civil Appeal Nos. 51-52 OF 2025 Arising out of SLP (C) Nos. 26441-26442/2024

In the instant case, the Hon’ble Supreme Court reaffirmed its commitment to the principles of arbitration including autonomy, efficiency, and limited judicial interference.

A dispute arose from a Client Service Agreement (“Agreement”) entered into between the Appellant and the Respondent under which the Respondent was required to provide capital advisory services to the Appellant. Subsequently, a dispute arose between the Appellant and the Respondent relating to the 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. As such, Respondent invoked the arbitration clause contained in the said Agreement, and initiated arbitration proceedings.

During the course of the arbitration proceedings, Respondent filed an Interlocutory Application before the Hon’ble Arbitral Tribunal seeking extension of time for cross examination of the Appellant’s witness (RW-1). The Arbitral Tribunal refused to grant more/additional time to the Respondent to conduct the cross examination on account of delays and inefficiency and came to the conclusion that sufficient opportunity had already been provided.

As such, the Respondent approached the Hon’ble High Court under Article 227 of the Constitution of India. The Hon’ble High Court directed the Arbitral Tribunal to allow further cross-examination setting aside the decision of Arbitrator. Being aggrieved by the Hon’ble High Court order, the Appellant filed an Appeal in the Hon’ble Supreme Court.

The Supreme Court allowed the said Appeal and set aside the order dated 25.10.2024 passed by the Hon’ble High Court holding that the Arbitral Tribunal had granted sufficient opportunities for cross-examination. The Court noted that the Respondent/Claimant had extensively cross-examined RW-1 for over 12 hours, exceeding reasonable limits. The High Court failed to demonstrate any perversity in the Tribunal’s decision, which is a necessary prerequisite for interference under Article 227. The Court reiterated that excessive judicial intervention weakens the efficiency of arbitration and should be discouraged.

Accordingly, the Supreme Court reinstated the Tribunal’s decision, instructing it to resume and conclude the proceedings without further delay. The Supreme Court reinforces judicial restraint in arbitral matters and upholds the principle of minimal court interference, reaffirming that High Court intervention under Article 226/227 is permitted only in rare cases of clear perversity in the Tribunal’s order.