[Kshitij Saruparia is an Advocate and a graduate of NALSAR University of Law, Hyderabad, and Apeksha Kachhawaha is an Associate at ASV Legal LLP, Delhi and a graduate of MNLU, Nagpur]
In May 2026, the Supreme Court of India directed a state-owned road corporation to pay up on a twelve-year-old arbitral award within three months. The tribunal had rendered the award in 2014. Between 2014 and 2026, the award wound through a district court, a High Court, a special leave petition (SLP), a review petition, and another SLP. The losing party, the Madhya Pradesh Road Development Corporation, did not dispute the award’s existence. It disputed jurisdiction, then interest, then jurisdiction again, this time invoking a 2018 precedent that had not existed when the original challenge was filed. The award holder, a Malaysian-backed special purpose vehicle (SPV) that had financed an infrastructure concession in 2003, collected nothing.
The Supreme Court in MPRDC v. Jabalpur Corridor Pvt. Ltd. (2026 INSC 590) dismissed the appeal and ordered payment. But it went further. Justice JK Maheshwari opened the judgment with an institutional admission: courts had sometimes “failed arbitration in India”. Judicial interference in alternative dispute resolution had been, the Court said, “a cure without a disease”. In paragraph 74, the bench named the mechanism: a hesitancy in some courts, rooted in suspicion of the arbitral process, which produced re-examination of evidence and re-interpretation of contracts under sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (hereinafter the “Act”).
The question this post addresses is a narrow one: what does that observation actually do? It is not whether the observation will transform lower court practice — the history of section 34 jurisprudence gives little reason for optimism on that front — but whether it does anything at all beyond its immediate disposal of the case. The answer is yes, but it is more limited than the judgment’s rhetoric suggests.
The Obiter Question, Correctly Framed
The observations in MPRDC under consideration in this post are not part of its ratio. The case turned on three holdings: (i) issue estoppel barred MPRDC from relitigating a jurisdictional question that had already reached the Supreme Court; (ii) section 34 does not permit merits review; and (iii) a contractually agreed pre-award interest rate is not a public policy violation. The cure without a disease formulation preceded all of that. A section 37 court that wants to reappraise evidence can technically disregard it.
The more precise question is not whether the observation is binding — it is not — but whether it operates on the interpretive environment in which binding law is applied. That is a different question, and it has a more defensible answer.
Indian courts, as a matter of observable practice, do not treat Supreme Court obiter as invisible. Passages that are not necessary to the decision are regularly quoted in subsequent proceedings, not as binding propositions but as indicators of judicial attitude — signals about how the Court expects lower courts to approach statutory text. The mechanism is not legal compulsion. It is reputational and argumentative: a lower court that departs from Supreme Court framing invites the inference that it has misread the statute’s purpose, and practitioners invoking that framing gain a rhetorical and, at the margin, a doctrinal foothold.
A Decade of Instruction Without Compliance
The context for that assessment is a recognisable pattern. In Associate Builders v. DDA (2014) 4 SCC 696, the Supreme Court set out the limited scope of section 34 clearly: no reappraisal of evidence, no substitution of the tribunal’s contract interpretation, and intervention only on the enumerated grounds. Five years later, in Ssangyong Engineering v. NHAI (2019) 15 SCC 131, the Court engaged in the same undertaking again. The patent illegality ground, introduced by the 2015 amendment, had expanded in practice beyond its statutory limits. Ssangyong narrowed it back to the face of the award.
Then in April 2025, a five-judge Constitution Bench in Gayatri Balasamy v. ISG Novasoft Technologies (2025 INSC 605) held that courts could not modify awards under section 34, except to sever discrete errors from an otherwise valid award. The reasoning was explicit: allowing modification would convert section 34 into an appellate jurisdiction the statute never created.
MPRDC sits at the end of this sequence. Each prior judgment articulated the correct statutory position. Each was followed by continued lower court conduct that required another correction. The pattern does not demonstrate that the Court’s doctrinal statements are ineffective — Associate Builders and Ssangyong are routinely cited by benches that stay within the statutory limits. It demonstrates that a subset of courts has not absorbed the instruction, and that those courts generate disproportionate appellate traffic. Whether that subset shrinks after MPRDC depends on factors no single judgment can control.
What Paragraph 74 Does and Does Not Establish
Paragraph 74 of MPRDC identifies a cognitive disposition that produces the conduct the statute forbids. The Court names it directly: hesitancy rooted in suspicion, leading to re-examination of evidence and re-interpretation of contracts at sections 34 and 37. This is descriptive and explanatory as it identifies why some courts exceed their statutory jurisdiction, not what the jurisdictional limit is.
The descriptive observation has a doctrinal use, but a careful one. Under section 5 of the Act, judicial intervention is expressly restricted to what the Act permits. Paragraph 74 helps identify the conduct that section 5 is intended to prevent: a court entering section 34 proceedings oriented toward finding fault with the award rather than toward examining whether the statutory grounds for interference exist. That orientation does not itself violate section 5 — the statute regulates what courts do, not how they approach the task. But paragraph 74 supplies a basis for arguing that where a court has demonstrably re-examined evidence or reinterpreted contracts, the hesitancy the Supreme Court described has materialised into the conduct the Act forbids. The observation and the statute work together; neither alone would do the same work.
The connected point on section 37 is cleaner. The appellate court under section 37 does not review the award. It reviews whether the section 34 court acted within the Act’s limits. The bench in MPRDC cited Regenta Hotels v. Hotel Grand Centre Point (2026 LiveLaw (SC) 21) for the proposition that concurrent findings under sections 34 and 37 attract great deference and may only be disturbed where the award is palpably perverse. A section 37 court examining a section 34 decision that re-examined evidence is therefore not simply reviewing a lower court ruling on grounds it disagrees with. It is examining whether the section 34 court stayed within the jurisdiction the statute defines. Paragraph 74 names what staying outside that jurisdiction looks like in practice.
The Investor Dimension: Facts Without Overreading
The dispute in MPRDC involved a Malaysian-backed SPV financed through EXIM Bank Malaysia that could not collect an award for twelve years. That is a concrete enforcement failure, not an abstraction. The Court acknowledged it, cross-referencing State of U.P. v. Reliance Industries Ltd. (2026 LiveLaw (SC) 502) for the proposition that transactions involving foreign investments carry an inherent expectation of stability in the rule of law.
What can fairly be taken from this is limited. The Court connected excessive supervisory review to a concrete enforcement failure experienced by a foreign party. It invoked the rule-of-law expectation that foreign investors bring to Indian arbitration. What cannot be inferred from a passing cross-reference is a doctrinal shift in how section 34 grounds are assessed — investment stability is not a statutory criterion under section 34 or section 37, and the Court did not suggest it should become one. The significance lies in the factual framing, not in any new legal standard. A court inclined toward intervention now has a Supreme Court observation connecting that intervention to investor-facing consequences. Whether that observation carries weight in a given case is an empirical question, not a jurisprudential one.
What the Self-Critique Actually Changes
There is no structural reason to expect MPRDC to change lower court conduct in ways that Associate Builders and Ssangyong did not. The courts that engage in the behaviour paragraph 74 describes have been operating under clear Supreme Court instructions for over a decade. The cost of excessive intervention falls on the award holder. The court that intervenes excessively does not bear that cost.
What MPRDC does is narrower than doctrinal transformation, and more durable than symbolism. It adds one specific item to the practitioner’s toolkit: an institutional self-indictment, authored by the Supreme Court in a judgment, that names excessive supervisory review as a pathology the Court itself has recognised and that it attributes to identifiable judicial conduct. Previous restraint-of-review decisions argued the statutory position. MPRDC argues the statutory position and then explains what has gone wrong in practice and why. That combination of instruction-plus-diagnosis is not available from Associate Builders, Ssangyong, or Gayatri Balasamy alone.
The practical consequence is at the level of argument. A party resisting section 37 interference with concurrent findings can now put the Supreme Court’s own characterisation of that interference — a cure without a disease — in front of the appellate court, attributed to a judgment rendered by a two-judge bench of the Supreme Court in May 2026. That argument existed in substance before MPRDC. It did not exist in this form. Forms matter in litigation.
Whether India’s legislative process addresses the underlying problem directly is a separate question. The Act has been amended twice since 2015. Neither amendment directly constrained the appellate scope of section 34 courts in a way that removed the doctrinal ambiguity courts have exploited. The 2019 amendment narrowed the stay standard and introduced time limits, but the grounds for setting aside remain textually capacious enough for a determined court to find room. Until the statute forecloses the conduct that paragraph 74 of MPRDC describes, the Supreme Court’s self-critique will function as an argument, not a remedy.
– Kshitij Saruparia & Apeksha Kachhawaha
