SC Appoints Sole Arbitrator in a 3-Agreement Commercial Dispute, Modifies Interim Protection Order

By substituting interim court injunctions with consensual sole-arbitrator proceedings, the Supreme Court has cleared the path for a streamlined resolution in high-stakes commercial disputes involving non-compete and manufacturing exclusivity terms.

A Division Bench comprising Justice Aravind Kumar and Justice Vipul M. Pancholi heard an appeal challenging a High Court order that stayed commercial court protection in a commercial dispute arising out of three inter-linked agreements.

Having appointed the sole arbitrator upon the mutual consent of the parties, the Supreme Court permitted the litigants to seek appropriate interim remedies under Section 17 of the Arbitration and Conciliation Act, 1996. The Apex Court added that “Having appointed the learned Arbitrator and the Arbitral Tribunal having thus been constituted, the parties shall be at liberty to file the necessary application under Section 17 of the Act before the Arbitral Tribunal seeking appropriate interim measures, as permissible in law. Consequently, we modify the impugned order passed by the High Court in paragraph No.12 which is to the effect “however, the appellant will not launch any new vehicle” by substituting the same “that the respondent herein will not launch or manufacture the vehicles as described in Annexures - A and B of the agreement dated 26th August, 2026 read with Clause 1.1 – specifications and vehicles as indicated therein” which shall be operative till orders are passed on the application that may be filed under Section 17 of the Arbitration and Conciliation Act, 1996. It is made clear that the remaining portion of the order in paragraph No.12 remains undisturbed and learned Arbitrator would examine the application filed under Section 17 of the Arbitration and Conciliation Act, 1996 being uninfluenced by the observations made under the impugned orders.”

Background

The contractual dispute originated from three distinct agreements entered into on August 26, 2025: a Manufacturing Agreement, a Supply and Distribution Agreement, and an Intellectual Property Agreement. The Manufacturing Agreement assigned exclusive vehicle manufacturing obligations to the respondent for a term of twenty years alongside strict non-compete covenants. Conflict erupted when the respondent initiated manufacturing and marketing under its 'Mayuri' brand, including Mayuri Rattan.

The appellant instituted proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, Bengaluru, which granted interim protection restraining the respondent from manufacturing and distributing these auto-shaped electric three-wheelers. The High Court of Karnataka, hearing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, stayed the Commercial Court's order at the first hearing, reasoning that the arrangement was an unexecuted joint venture without tangible consideration.

Aggrieved, the appellant approached the Supreme Court. During arguments, both parties consented to refer the matter to former Supreme Court Judge, Justice R.V. Raveendran, as sole arbitrator, leading to the modification of the interim order and disposal of the appeal.

Case Details:
Case No.: Civil Appeal No. 13117 of 2026 (Arising out of SLP (Civil) No. 31162 of 2026)
Neutral Citation: 2026 INSC 1057
Case Title: Kinetic Green Energy and Power Solutions Limited v. Saera Electric Auto Limited

Source: 2026 CaseBase(SC) 8078