Supreme Court Upholds High Court Order, Refers Dispute to Arbitration in KVIC Case.


26 September 2025 Arbitration Law >> Business & Commercial Law  

On September 26, 2025, the Supreme Court of India, headed by Justices J.B. Pardiwala and K.V. Viswanathan, disposed of Special Leave Petitions (C) Nos. 26634-26635/2025 filed by the Khadi and Village Industries Commission (KVIC) against KVIO Ventures Private Limited. The petitions challenged a Bombay High Court order dated July 22, 2025, in COM.ARB.P(L) No. 19757/2025 and IA(L) No. 19841/2025 relating to a dispute regarding a concession agreement.

Appearing on behalf of KVIC were Senior Advocate Neeraj Kishan Kaul, along with Advocates Shwetasree Majumder, Rahul Ray, Aditya Verma (Advocate-on-Record), and others, who argued against the High Court decision. The respondent KVIO Ventures was represented by Senior Advocate Navin Pahwa, assisted by Advocates Bishwajit Dubey, Karan Khetani, Vivek Sharma, and Kaustubh Rai (Advocate-on-Record). The Supreme Court allowed KVIC's exemption application from filing official translations and heard the case.


 

 
 
 

The conflict revolved around a fresh Request for Proposal (RFP) released by KVIC, which was held by the High Court to possibly overlap with the scope of work defined in Article 2 of the concession agreement with KVIO. The High Court, in paragraph 35 of the order, mentioned that the new RFP, by extending an invitation to third parties for overlapping activities with the scope of the agreement, may dilute KVIO's sole rights under Clauses 6(a) and 17.2(i). KVIC opposed this, stating that the said redesign and redevelopment activity under the new RFP did not clash with the agreement.

The Supreme Court refused to intervene in the High Court's order but granted permission to KVIC to file its objections with the arbitrator. The Court ordered KVIC to approach the arbitrator with an application to make it clear that the scope of the new RFP is not in contravention of the concession agreement or prejudicial to the rights of KVIO. The arbitrator was directed to investigate this matter on his own, uninfluenced by the observations of the High Court.

Realizing the intricacy involved in the dispute, the Supreme Court requested the arbitrator to speed up the proceedings and finalize them within two months from September 26, 2025. The Court reiterated that the arbitrator should carefully evaluate the scope of work as submitted by KVIC. All the pending applications stood disposed of, marking the closure of the proceedings.

This judgment points to the courts' inclination to settle contractual issues through arbitration while ensuring that the parties are able to clarify their stand. It also emphasizes the need for speedy arbitration to deal with time-sensitive commercial issues.