High Court Must Not Order Further Cross‑Examination Where Arbitral Tribunal Gave Sufficient Opportunity

A bench of Justice Pamidighantam Sri Narasimha and Justice Manoj Misra heard appeals by Serosoft Solutions challenging the High Court's exercise of its supervisory jurisdiction under Article 227 of the Constitution, which had directed an arbitral tribunal to grant Dexter Capital an additional opportunity to cross‑examine a key witness despite the tribunal having declined the request.

The Court allowed the appeals, held that the High Court erred in interfering with the arbitral process, and set aside the impugned orders. The Supreme Court emphasised the twin statutory obligations under the Arbitration and Conciliation Act: the tribunal's duty to ensure "equality" and a full opportunity to present one's case under Section 18, and the duty on judicial authorities to exercise restraint in intervening in arbitral proceedings. The Court, in its reasoning, observed: “The first principle that governs ‘conduct of arbitral proceedings’ under Chapter V of the Act is the obligation of equal treatment of parties. Under Section 18 of the Act, it is the statutory duty of the Arbitral Tribunal to ensure that the parties are treated with equality and each party is given full opportunity to present its case. At the same time, there is yet another statutory obligation, which is imposed on the judicial authorities. That is the statutory incorporation of judicial restraint in interfering with matters governed under Part I of the Act … This objection of restraint on the judicial authority is overriding and notwithstanding anything contained in any other law for the time being in force.” The Court noted that the tribunal had recorded that the attempt to cross‑examine the witness should be limited and had held “that far and no further.” Finding no perversity in the tribunal’s order, the Supreme Court concluded that the High Court should not have directed further cross‑examination and directed the arbitral tribunal to resume and conclude proceedings expeditiously.

Background

The dispute arose out of a Client Service Agreement between a startup software company and a capital advisory services provider, the latter claiming unpaid fees and invoking arbitration. After constitution of the tribunal (Section 11 application allowed on 08.05.2023), witness examination spanned several dates. The claimant (respondent before the Court below) examined two witnesses (CW-1, CW-2); cross‑examination of the claimant’s witnesses was completed, and the claimant then cross‑examined the counterparty’s witness RW‑1 across sessions that included 9 questions on 09.12.2023, an extensive session on 10.02.2024 (during which 104 questions were recorded), and a further session on 01.10.2024 (28 questions), after consensual extension of the tribunal’s mandate pursuant to Section 29A. On 03.10.2024 the claimant filed an interlocutory application for further time to complete cross‑examination; the tribunal rejected it by order dated 09.10.2024, observing delays, lack of preparedness and declining further opportunity so as to preserve the time‑bound process. The claimant challenged that order under Article 227; the High Court, while recognising that interference was ordinarily unwarranted, directed the tribunal to grant further opportunity in view of exceptional circumstances and relied on earlier guidance that interference was permissible only where an order was “completely perverse.” The appellant challenged the High Court’s direction before the Supreme Court.

The Supreme Court examined the record and concluded that the tribunal had already afforded ample opportunity — the claimant’s cross‑examination of RW‑1 had exceeded twelve hours — and that the High Court did not identify any perversity in the tribunal’s order. The Court set aside the High Court’s orders (CM(M) 3711/2004 and CM Appl. 63047/2024 dated 25.10.2024), allowed the appeals and directed the arbitral tribunal to proceed to finalise the arbitral proceedings as expeditiously as possible. No other interim relief was granted.

Case Details: Case No.: 2025 INSC 26; Civil Appeal Nos. 51-52 of 2025 arising out of SLP (C) Nos. 26441-26442/2024 Case Title: Serosoft Solutions Pvt. Ltd. v. Dexter Capital Advisors Pvt. Ltd. Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]