BGM AND M-RPL-JMCT (JV) versus EASTERN COALFIELDS LIMITED

Citation: [2025] 7 S.C.R. 1275 · Decided: 18-07-2025 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Dismissed

cites 3 · see the full citation network in Lexace

Judgment (excerpt)

[2025] 7 S.C.R. 1275 : 2025 INSC 874
BGM and M-RPL-JMCT (JV) 
v. 
Eastern Coalfields Limited
(Civil Appeal No. 9795 of 2025)
18 July 2025
[Pamidighantam Sri Narasimha and Manoj Misra,* JJ.]
Issue for Consideration
(i) Whether the question of existence of an arbitration agreement 
should be left for the arbitral tribunal to decide; (ii) whether clause 
13 of the General Terms and Conditions of the contract and relied 
upon by the appellant would constitute an arbitration agreement 
between the parties as contemplated u/s.7 of the Arbitration and 
Conciliation Act, 1996; (iii) whether clause 32 of Instructions to 
Bidders negates the existence of an arbitration agreement.
Headnotes†
Arbitration and Conciliation Act, 1996 – Sub-section (6-A) 
of s.11 – Existence of arbitration agreement – The appellant 
and the respondent entered into a contract relating to 
transportation/handling of goods – Dispute arose between the 
parties – Appellant relied on clause 13 of the General Terms and 
Conditions of the contract as arbitration agreement – However, 
respondent contended that clause 13 is bereft of the essential 
ingredients to constitute an arbitration agreement – According 
to the appellant, the Referral Court should straight away 
refer the matter and leave it to the arbitral tribunal to decide 
whether the arbitration agreement exists or not – Whether the 
question of existence of an arbitration agreement should be 
left for the arbitral tribunal to decide:
Held: 1. The argument of the appellant that Referral Court should 
straight away refer the matter and leave it to the arbitral tribunal 
to decide whether the arbitration agreement exists or not cannot 
be accepted. [Para 19]
2. In the instant case, the appellant is relying on just one clause in the 
contract which, according to the appellant, constitutes an arbitration 
agreement whereas according to the respondent, though the clause is 
not disputed, the same does not constitute an arbitration agreement 
* Author
1276
[2025] 7 S.C.R.
Supreme Court Reports
– In such circumstances, the Court while exercising power u/s.11 
would not have to hold a mini-trial or an enquiry into its existence 
rather a plain reading of the clause would indicate whether it is, or it 
is not, an arbitration agreement, prima facie, satisfying the necessary 
ingredients of it, as required by s.7 of the 1996 Act – In view of this 
Court, such a limited exercise would not transgress the limit set 
out by sub-section (6-A) of s.11 of the 1996 Act as introduced by 
2015 Amendment because the object of such an exercise (i.e., of 
examination) is to weed out frivolous claims for appointment of an 
arbitrator/ reference to an arbitral tribunal. [Paras 18, 19]
Arbitration and Conciliation Act, 1996 – s.11 – The appellant 
and the respondent entered into a contract – Dispute arose 
between the parties – Appellant sought to invoke arbitration 
through clause 13 of the General Terms and Conditions of the 
contract – High Court held that clause 13 does not constitute 
an arbitration agreement – Whether clause 13 of the General 
Terms and Conditions of the contract and relied upon by the 
appellant would constitute an arbitration agreement between 
the parties as contemplated u/s.7 of the Arbitration and 
Conciliation Act, 1996:
Held: 1. Any agreement, or clause in an agreement, requiring or 
contemplating a further consent or consensus before a reference 
to arbitration, is not an arbitration agreement. [Para 26]
2. In the instant case, clause 13 does not bind parties to use 
arbitration for settlement of the disputes – Use of the words “may 
be sought”, imply that there is no subsisting agreement between 
parties that they, or any one of them, would have to seek settlement 
of dispute(s) through arbitration – It is just an enabling clause 
whereunder, if parties agree, they could resolve their dispute(s) 
through arbitration – In view of this Court, the phraseology of clause 
13 is not indicative of a binding agreement that any of the parties 
on its own could seek redressal of inter se dispute(s) through 
arbitration – Therefore, the High Court was justified in holding that 
clause 13 does not constitute an arbitration agreement. [Para 31]
Arbitration and Conciliation Act, 1996 – Whether clause 32 of 
Instructions to Bidders negates the existence of an arbitration 
agreement:
Held: In the instant case, clause 32 does not exclude resolution 
of disputes through arbitration agreement – It only fixes j

Excerpt shown. Read the full judgment & AI analysis in Lexace.