SEPCO Electric Power Construction Corporation v. GMR Kamalanga Energy Ltd. 2025 INSC 1171 - Natural Justice - S.34 Arbitration Act
Arbitration and Conciliation Act 1996- Section 34,18 - Audi alteram partem as a fundamental juristic principle- When a party is unable to analyse, comment or argue on a contention raised by the other party, it will certainly be deemed as a breach of natural justice and thereby, also a violation of the most fundamental notions of justice - Such arbitral award is required to be set aside by the courts. (Para 105) The principles of natural justice, and the public policy of India are paramount and cannot be ignored or sidelined in an attempt not to frustrate the patent or latent commercial wisdom of the parties to seek an alternative means of dispute resolution. Such issues attack the root of the Indian legal system and the courts cannot be made a mere spectator to such gross violations. (Para 112)
Arbitration and Conciliation Act 1996- Section 34,37 - a court under Section 37 of the 1996 Act can only determine as to whether the concerned court under Section 34 has not travelled beyond the parameters of the scope therein. No independent evaluation is permitted on the merits of the award- (Para 71) While the initial probe is initiated during a recourse under Section 34 , and if it further affirms the award, a court exercising the mandate of Section 37 ought to employ caution and reluctance to alter with the concurrent findings. (Para 72)
Arbitration and Conciliation Act 1996- Section 20-In the absence of the express or implied choice of law, it is the law that has the closest as well as the most real connection with the arbitration agreement, that is applicable. when a seat of arbitration is India, it would only be the courts of India that would have exclusive jurisdiction to determine any disputes pertaining to the process of arbitration thereof - The parties to a dispute are always at liberty to choose the substantive law, procedural law, and the law of the arbitration agreement so applicable - The principle of party autonomy does not vest absolutely. Although the parties have a great deal of discretion in choosing the governing law, their choices cannot conflict with the mandatory provisions in the jurisdiction of the seat of the concerned arbitration. (Para 76-82)
Arbitration and Conciliation Act 1996- Section 34- It is the interpretation of an arbitral award which determines whether a contract or a specific provision thereof is considered part of the award or not. If a clear reliance is placed by the arbitrator on the contract, a presumption arises in favour of the incorporation, while a vague or general reference opposes such a presumption. (Para 98)
Arbitration and Conciliation Act 1996 -An arbitrator lacks the power to deviate from or to reinterpret the terms of the contract while making an award. The awards must be within the parameters of the agreement entered between the parties. (Para 91)
Case Info
SEPCO Electric Power Construction Corporation v. GMR Kamalanga Energy Ltd.; 2025 INSC 1171
Key Case Details
- Case name: SEPCO Electric Power Construction Corporation v. GMR Kamalanga Energy Ltd.
- Neutral citation: 2025 INSC 1171
- Coram: B. R. Gavai, CJI; Augustine George Masih, J.
- Judgment date: September 26, 2025
Caselaws and Citations
- Renusagar Power Co. Ltd. v. General Electric Co. — 1993 Supp 3 SCR 22; 1994 Supp (1) SCC 644
- Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. — (2003) 5 SCC 705
- Associated Engineering Co. v. Government of A.P. — (1991) 4 SCC 93
- MMTC Ltd. v. Vedanta Ltd. — (2019) 4 SCC 163
- UHL Power Co. Ltd. v. State of Himachal Pradesh — (2022) 4 SCC 116
- Reliance Infrastructure Ltd. v. State of Goa — (2024) 1 SCC 479
- South East Asia Marine Engg. & Constructions Ltd. v. Oil India Ltd. — (2020) 5 SCC 164
- Konkan Railway Corp. Ltd. v. Chenab Bridge Project Undertaking — (2023) 9 SCC 85
- Project Director, NHAI v. M. Hakeem — (2021) 9 SCC 1
- Associate Builders v. DDA — (2015) 3 SCC 49
- HRD Corporation v. GAIL (India) Ltd. — (2018) 12 SCC 471
- Ssangyong Engineering & Construction Co. Ltd. v. NHAI — (2019) 15 SCC 131
- Delhi Metro Rail Corp. Ltd. v. Delhi Airport Metro Express Pvt. Ltd. — (2024) 6 SCC 357
- Parsa Kente Collieries Ltd. v. RRVUNL — (2019) 7 SCC 236
- K. Sugumar v. HPCL — (2020) 12 SCC 539
- Narinder Singh & Sons v. Union of India — (2022) 18 SCC 690
- Larsen Air Conditioning & Refrigeration Co. v. Union of India — 2023 INSC 708; (2023) 15 SCC 472
- Government of India v. Vedanta Ltd. — (2020) 10 SCC 1
- Enercon (India) Ltd. v. Enercon GmbH — (2014) 5 SCC 1
- Gayatri Balasamy v. ISG Novasoft Technologies Ltd. — (2025) 7 SCC 1
Foreign authorities cited:
- Rock Advertising Ltd. v. MWB Business Exchange Centres Ltd. — [2018] UKSC 24
- Porter v. Magill — [2001] UKHL 67; [2002] 2 AC 357
- Charles Lim Teng Siang v. Hong Choon Hau — [2021] SGCA 43
- Vinergy International (Pvt.) Ltd. v. Richmond Mercantile Ltd. FZC — [2016] EWHC 525 (Comm)
- Gilbert-Ash (Northern) Ltd. v. Modern Engineering (Bristol) Ltd. — [1974] AC 689
- Additional English cases: R v. Abadom [1983] 1 WLR 126; English Exporters Pty Ltd v. Eldonwall [1973] 1 Ch 415; Chaplin v. Hicks [1911] 2 KB 786; Soteria Insurance Ltd v. IBM UK Ltd [2022] EWCA Civ 440
Statutes and Laws Referred
- Arbitration and Conciliation Act, 1996 — Sections 18, 20, 21.4 (contract clause choosing 1996 Act), 28(1)(b)(i), 28(3), 31(7)(b), 34(1)-(4),(5)-(6), 37(1)(c),(2).
- Commercial Courts Act, 2015 — Section 13.
- Indian Contract Act, 1872 — Sections 62 (novation/alteration), 63 (waiver/remission).
- Indian Evidence Act, 1872 — Section 115 (estoppel) referenced contextually.
- Constitution of India — Article 142 (discretionary power).
- International instruments and principles:
- UNCITRAL Model Law (1985) — Article 34 (model for Section 34).
- New York Convention (enforcement context).
- Contractual governing law:
- Laws of England as lex contractus per Section 25.2 of the Amended CWEETC Agreement.
- Exclusion of CISG via contract clause.
- Doctrines referenced:
- Audi alteram partem, Wednesbury reasonableness, kompetenz‑kompetenz, actus curiae neminem gravabit, allegans contraria non est audiendus.
Although the parties have a great deal of discretion in choosing the governing law, their choices cannot conflict with the mandatory provisions in the jurisdiction of the seat of the concerned arbitration.#SupremeCourt https://t.co/ObseMq1b1y pic.twitter.com/jWvDubquAL
— CiteCase 🇮🇳 (@CiteCase) September 26, 2025
Swasti Chaturvedi