The Supreme Court observed that arbitration often leads to litigation at every stage, highlighting issues with shifting hearings abroad despite Indian venues. NMDC Steel’s case shows the need to strengthen confidence in domestic arbitration locations.
New Delhi: The Supreme Court of India on Tuesday highlighted growing concerns in the country’s arbitration system, observing that arbitration today often leads to litigation at every stage [NMDC Steel v. Danieli].
A Bench comprising Chief Justice of India Surya Kant and Justices Ujjal Bhuyan and N Kotiswar Singh made the remarks while hearing objections to an International Court of Arbitration (ICA) tribunal’s decision to shift the hearing of a dispute from India to London.
“The problem in arbitration is now that at every stage it generates litigation,”
CJI Kant said, pointing out a key issue in the way arbitration is currently being handled in India.
The Bench was examining a situation where an arbitration agreement specifically fixed Hyderabad as the venue, but hearings were conducted in Delhi and the final sitting was scheduled at the International Dispute Resolution Centre (IDRC) in London.
The Court noted that the arbitration clause, the International Chamber of Commerce (ICC) terms of reference, and Article 18 of the ICC Rules all clearly confirmed Hyderabad as the designated venue.
The judges questioned how the entire process had moved across different jurisdictions without even a single hearing taking place at the agreed location.
NMDC Steel Limited had approached the Telangana High Court in October 2025, challenging an order passed by the arbitral tribunal in an ICC arbitration. The tribunal had decided on September 15, 2025, to shift the closing hearing from New Delhi to the IDRC in London.
Earlier, on October 7, 2025, a Division Bench of Justices Moushumi Bhattacharya and Gadi Praveen Kumar had granted limited interim protection to NMDC. The High Court noted several prima facie concerns about the tribunal’s reasoning.
These included: the arbitration agreement clearly designating Hyderabad, India as the venue; the tribunal’s order not reflecting NMDC’s proposal of Hyderabad as an alternative; under Section 20 of the Arbitration and Conciliation Act and Article 18 of the ICC Rules, the convenience of the parties takes precedence over the convenience of the tribunal; and most parties being India-based, making it “inconceivable” that no venue in New Delhi or Hyderabad could host the hearing.
The High Court described the move to London as potentially perverse and, prima facie, beyond the tribunal’s authority.
However, it did not stay the arbitration and only restrained the tribunal from finalising London bookings based on an email instructing parties to confirm reservations by 6 PM on October 5, 2025. The Court left the question of maintainability open.
Subsequently, when the respondents submitted additional correspondence showing NMDC’s participation in an earlier evidentiary hearing in London and messages indicating openness to Singapore or London as alternative venues, the High Court’s perspective changed. On November 20, 2025, the same Bench dismissed the writ petition on grounds of maintainability.
At the Supreme Court hearing, the judges questioned why domestic venues were not considered after the tribunal argued that hotels in Delhi were expensive.
They asked,
“What is the problem that you first enter into an agreement for India then you try to wriggle out only because of the luxury of certain members,”
emphasising that India has multiple cities capable of hosting large arbitration hearings.
The Bench further indicated that it did not want to issue any ruling that could unsettle the Indian arbitration ecosystem, stressing the importance of promoting confidence in domestic venues.
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CJI Kant added,
“The international arbitration community may think that Indian courts are very conservative. We don’t want that kind of message to be given.”
The Supreme Court asked the parties to return with proposals for a suitable Indian venue that would allow the scheduled December hearings to proceed. The matter is expected to be taken up again tomorrow.
NMDC was represented by Solicitor General Tushar Mehta along with Advocates Nidhi Mittal, Gurjas Narula, and Jaya Choudhary. The respondents were represented by Senior Advocate Shyam Divan.
Case Title:
NMDC STEEL LIMITED VERSUS DANIELI AND C. OFFICINE & ORS.
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