Share on LinkedInShare on LinkedIn

ARTICLE · 08 MAY 2026

Supreme Court Confirms: No Arbitration Without Agreement, Participation Does Not Confer Jurisdiction

The Supreme Court has reaffirmed foundational principles of arbitration law in a landmark decision involving a municipal octroi collection contract dispute.

IndiaLitigation, Mediation & Arbitration

The Supreme Court has upheld a Bombay High Court decision setting aside an arbitral award, reaffirming foundational principles of arbitration law: jurisdiction cannot be unilaterally imposed, participation in defective proceedings does not cure jurisdictional nullity, and state authorities lack power to foist arbitration on parties governed by concluded contracts. The judgment in M/s Bharat Udyog Ltd. v. Ambernath Municipal Council offers critical guidance on the interpretation of dispute resolution clauses, the limits of statutory intervention, and the doctrine of estoppel in arbitration.

Factual Background

In March 1994, the Ambernath Municipal Council (Municipal Council), a statutory body constituted under the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, issued a tender for the collection of octroi for one year commencing 1 April 1994. The tender specified a reserve price of Rs. 6,74,00,000, below which offers would not be considered.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See more popular content from