Facts Of The Case:
The petitioner, Balaji Steel Trade, entered into a Buyer and Seller Agreement (BSA) dated 06.06.2019 with respondent no. 1, Fludor Benin S.A., for the supply of cottonseed cake, containing an arbitration clause specifying arbitration in Benin. An Addendum was later executed. Subsequently, respondent no. 1 assigned its supply obligations. The petitioner then entered into separate Sales Contracts with respondent no. 2 and High Seas Sale Agreements (HSSAs) with respondent no. 3—both containing arbitration clauses providing for arbitration in India under Indian law. Disputes arose concerning the supply quantity. Respondent no. 1 initiated arbitration in Benin. The petitioner, instead of participating, filed an anti-arbitration injunction suit before the Delhi High Court, which was dismissed. Concurrently, the petitioner filed the present petition under Section 11 of the Arbitration Act, seeking the appointment of a sole arbitrator in India for a composite arbitration involving all three respondents under the “group of companies” doctrine, arguing the BSA was novated by the later contracts. Meanwhile, the Benin arbitration concluded, rendering a final award.
Procedural History:
The procedural history of this case is as follows. After disputes arose, respondent no. 1 initiated arbitration proceedings in Benin in April 2023. The petitioner, Balaji Steel Trade, responded by filing an anti-arbitration injunction suit (CS (Comm) No. 544 of 2023) before the Delhi High Court in August 2023, seeking to restrain the Benin arbitration. Pending the High Court’s decision, the petitioner simultaneously filed the present Arbitration Petition No. 65 of 2023 under Section 11(6) of the Arbitration Act before the Supreme Court, seeking appointment of an arbitrator in India. The Benin Commercial Court appointed a sole arbitrator in July 2023, who rendered a final award in May 2024. Subsequently, the Delhi High Court dismissed the anti-arbitration injunction suit in November 2024. The Supreme Court then heard and ultimately dismissed the Section 11 petition in November 2025.
READ ALSO:Law is a Force for Justice, Not Absurdity: Supreme Court on Rent Arrears Eviction Case
Court Observation:
The Supreme Court made key observations. It held the BSA was the “mother agreement” with Benin as the juridical seat and its law as the curial law, making the arbitration an international commercial arbitration outside Part I of the Indian Arbitration Act. The Court found the subsequent Sales Contracts and HSSAs were separate, ancillary agreements that did not novate or supersede the BSA’s arbitration clause. It ruled that Indian courts lack jurisdiction under Section 11 to appoint an arbitrator for a foreign-seated arbitration. The Court further held the petitioner was barred by issue estoppel due to the Delhi High Court’s prior dismissal of the anti-arbitration suit on identical issues, and that the “group of companies” doctrine was inapplicable as there was no mutual intent to bind the non-signatory respondents.
Final Decision & Judgement:
The Supreme Court dismissed the Arbitration Petition. It held that the arbitration clause in the principal Buyer and Seller Agreement (BSA), which designated Benin as the seat and Beninese law as the governing law, was valid and binding. Consequently, Part I of the Indian Arbitration Act, including Section 11, was inapplicable, and Indian courts had no jurisdiction to appoint an arbitrator. The subsequent contracts with other respondents did not novate this core agreement. The petition was also barred by issue estoppel due to the Delhi High Court’s prior ruling, and the “group of companies” doctrine was found inapplicable. Parties were to bear their own costs.
Case Details:
Case Title: BALAJI STEEL TRADE vs. FLUDOR BENIN S.A. & ORS. Citation: 2025 INSC 1342 Petition No.: Arbitration Petition No. 65 of 2023 Date of Judgement: November 21, 2025 Judges/Justice Name: Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar