The principles of party autonomy, jurisdictional competence, and judicial scrutiny of arbitrability have consistently shaped the development of arbitration in India. One recurring tension is whether parties who consent to arbitration can later challenge the process or the award on the ground that the subject matter was legally non-arbitrable.
The Supreme Court, in Sanjit Singh Salwan & Ors. v. Sardar Inderjit Singh Salwan & Ors. (2025) addressed this question in the context of disputes concerning a charitable trust. The Court examined whether parties, after voluntarily submitting their disputes to arbitration and securing a consent decree based on the award, could subsequently repudiate the same on the ground of non-arbitrability under Section 92 of the Code of Civil Procedure (CPC).
This judgment not only clarifies the interaction between consent, estoppel, and arbitrability but also adds significant depth to Indian arbitration jurisprudence.
Factual Background
The dispute arose among trustees of the Guru Tegh Bahadur Charitable Trust. The respondents filed a suit for perpetual injunction to restrain the appellants from interfering in the affairs of a school managed by the Trust.
- The Trial Court, applying Section 92 CPC, rejected the plaint, holding that the matter related to trust administration and was barred.
- In appeal, during pendency, the parties mutually agreed to arbitration and appointed a sole arbitrator, who passed an award on 30.12.2022.
- The award settled management arrangements, and both sides filed a joint application before the District Court, affirming their acceptance of the award. On 27.01.2023, the appellate court disposed of the matter in terms of the award, treating it as a compromise decree.
This decree attained finality as it was never challenged.
However, when the appellants later sought to enforce the award (first through execution proceedings, then under Section 9 of the Arbitration and Conciliation Act, 1996), the respondents shifted stance, arguing that the subject matter was non-arbitrable under Section 92 CPC. Both the Commercial Court and the High Court accepted this contention, declaring the award a nullity.
Aggrieved, the appellants approached the Supreme Court.
Issues Before the Supreme Court
- Whether parties who voluntarily consented to arbitration and acted upon the award could later challenge it as non-arbitrable?
- Does the doctrine of estoppel by conduct and election prevent such repudiation?
- What is the effect of a compromise decree based on an arbitral award?
Appellants’ Contentions
- The award had merged into a consent decree, which attained finality. Parties were estopped from questioning its validity.
- Respondents, by their conduct of accepting the award and securing disposal of their appeal on that basis, could not approbate and reprobate.
- Even if the award was technically non-arbitrable, equity required enforcing the decree, else the appellants would be left without remedy.
- Reliance was placed on precedents such as:
Suzuki Parasrampuria Suitings Pvt. Ltd. v. Official Liquidator of Mahendra Petrochemicals Ltd. (2018) 10 SCC 707
Mumbai International Airport Pvt. Ltd. v. Golden Chariot Airport (2010) 10 SCC 422
Karam Kapahi v. Lal Chand Public Charitable Trust (2010) 4 SCC 753
Indore Development Authority v. Manoharlal (2020) 8 SCC 129
Respondents’ Contentions
- Matters relating to public trusts fall within Section 92 CPC, making them inherently non-arbitrable.
- An arbitral award passed without jurisdiction is a nullity, which can be challenged at any stage.
- The appellate order disposing of the case was not a true consent decree but only an administrative disposal of appeal.
- Reliance was placed on:
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. (2011) 5 SCC 532
Vimal Kishor Shah v. Jayesh Dinesh Shah (2016) 8 SCC 788
Prem Singh v. Birbal (2006) 5 SCC 353
State of Rajasthan v. Surendra Mohnot (2014) 14 SCC 77 (for the principle that there can be no estoppel against law).
Supreme Court’s Analysis
1. Conduct and Estoppel
The Court noted that the respondents:
- Initially pleaded that Section 92 CPC did not apply.
- Voluntarily agreed to arbitration.
- Accepted the award and sought disposal of appeal on its basis.
- Never challenged the consent decree.
Having done so, they later adopted a diametrically opposite stance, claiming non-arbitrability. The Court held this to be impermissible:
“It would be impermissible for the respondents to take such opposite stand… Having specifically pleaded maintainability and then consenting to arbitration, they are estopped from challenging the award on non-arbitrability grounds.”
2. Doctrine of Approbate and Reprobate
Citing Mumbai International Airport and R.N. Gosain v. Yashpal Dhir, the Court reiterated that the law does not permit a party to accept and reject the same instrument.
This doctrine, also expressed as “qui approbat non reprobate”, prevents parties from blowing hot and cold.
3. Estoppel Against Law v. Estoppel by Conduct
While generally there is no estoppel against law, the Court distinguished between legal nullity and conduct-based estoppel.
Even if an award touches non-arbitrable matters, once parties have:
- voluntarily submitted,
- accepted the award, and
- altered their position in reliance,
they cannot later repudiate.
The Court relied on Dhiyan Singh v. Jugal Kishore (AIR 1952 SC 145), where even an invalid award was enforced through estoppel because one party, by conduct, induced the other to act to its detriment.
4. Importance of Consent Decree
The compromise decree passed in appeal and unchallenged, continued to bind the parties. Its legal significance was ignored by the Commercial Court and High Court.
5. Remedy
By overturning the lower court decisions, the Supreme Court restored the appellants’ right to execution and clarified that parties who consent to arbitration cannot subsequently dispute its arbitrability.
Key Highlights of the Decision
Justice Augustine George Masih and Justice Atul S. Chandurkar stated:
In our view, non-suiting the appellants on the ground that the award dated 30.12.2022 was a nullity in view of the objection raised by the respondents has resulted in grave injustice to the appellants. If the impugned adjudication is accepted, the respondents would reap benefit from their act of approbation and reprobation. The respondents having succeeded in having a decree being passed on the strength of the arbitral award dated 30.12.2022 now cannot be permitted to contend that the award itself was a nullity. The justice of the case therefore requires that the appellants ought to be permitted to revive the execution proceedings that they had filed being Miscellaneous Case No. 122 of 2023.
These proceedings were withdrawn shortly after being filed to enable the appellants to file the application under Section 9 of the Act of 1996 and there was no adjudication of the same on merits. In our view, the appellants cannot be left remediless especially in the backdrop of the fact that the compromise decree was passed in the respondents’ appeal which remained unchallenged by them.
Doctrinal Significance
(a) Party Autonomy v. Non-Arbitrability
Traditionally, non-arbitrable disputes (e.g., criminal matters, matrimonial disputes, probate, trusts under Section 92 CPC) cannot be referred to arbitration (Booz Allen, Vimal Kishor Shah).
However, this judgment introduces a nuanced exception: once parties consciously elect arbitration, accept the award, and obtain judicial recognition, they cannot later invoke non-arbitrability as a defence.
(b) Estoppel by Conduct in Arbitration
The Court emphasised equitable estoppel over rigid application of non-arbitrability. This strengthens certainty in dispute resolution, discouraging strategic flip-flopping.
(c) Consent Decrees as a Shield
A compromise decree based on an arbitral award acquires independent enforceability. Unless challenged, it binds parties irrespective of later objections to jurisdiction.
Critical Appraisal
Strengths of the Ruling
- Prevents misuse of non-arbitrability as a post facto weapon.
- Promotes good faith and finality in dispute resolution.
- Recognises the binding force of compromise decrees.
Concerns
- Risk of diluting the strict bar on non-arbitrable disputes under Section 92 CPC.
- Future litigants may argue that estoppel overrides statutory prohibitions, creating doctrinal uncertainty.
- Courts must carefully distinguish between pure questions of jurisdiction and conduct-induced estoppel.
Conclusion
The Supreme Court in Sanjit Singh Salwan has clarified that consent to arbitration and acceptance of an award estops parties from later challenging it on non-arbitrability grounds, particularly when such an award is embodied in a consent decree.
This judgment reinforces the principle that litigation is not a game of chess, and parties cannot strategically shift positions to their convenience. While it does not erode the doctrine of non-arbitrability altogether, it emphasises that equity and consistency of conduct matter as much as jurisdictional principles.
For arbitration in India, this ruling is a milestone. It preserves the integrity of consensual dispute resolution and ensures that consent once given—and acted upon—cannot be lightly withdrawn.