Supreme Court: Clause 'May Be Sought' Through Arbitration Is Not An Arbitration Agreement

In a latest judgment titled BGM and M-RPL-JMCT (JV) v. Eastern Coalfields Limited, 2025 INSC 874, the Supreme Court of India ("Court") interpreted the following portion of clause 13, titled "Settlement of Disputes" of the contract between the parties, and held it not to be a binding arbitration agreement:

"In case of parties other than Govt. Agencies, the redressal of the dispute may be sought through ARBITRATION AND CONCILIATION ACT, 1996 as amended by AMENDMENT ACT OF 2015".

Relevant Facts

The appellant impugned the order passed by the Calcutta High Court, in Arbitration Petition No. 745 of 2023, whereby a petition under Section 11, Arbitration and Conciliation Act, 1996 ("ACA"), seeking appointment of an arbitral tribunal on the strength of the above-quoted clause, was dismissed.