The Supreme Court of India, through a bench comprising CJI Surya Kant, Justice Joymalya Bagchi, and Justice V. Mohana, has held that disputes arising under agreements that operate in distinct fields are amenable to their own independent dispute resolution clauses, even where an earlier technical licence agreement prescribes arbitration seated in a foreign jurisdiction. Disposing of two petitions filed under Section 11 of the Arbitration and Conciliation Act, 1996, the Court referred the disputes to domestic arbitration and appointed Justice Ramesh Deokinandan Dhanuka, former Chief Justice of the Bombay High Court, as the sole arbitrator.
Background of the Dispute
Petitioner No. 1, Shubham Equipment Private Limited (SEPL), is an Indian company based in Thane, Maharashtra, engaged in cleaning drinking water tanks under the brand names ‘TANCLEAN’ and ‘SHUBHAM’, with Petitioner No. 2, Sunil Suresh Uplap, as one of its main promoters. Respondent No. 1, Rothwell Water Company Limited (RWCL), is a South Korean entity holding multiple patents in Biological Nutrient Removal Process technology for wastewater treatment, headed by its promoter and President, Keonho Lee (Respondent No. 2). Respondent No. 3, Rothwell Business International Private Limited (RBIPL), is a wholly owned subsidiary of RWCL incorporated in Pune by Keonho Lee, his daughter Ryouree Lee, and Sayaji Krishnarao Shinde.
The contractual relationship between the parties evolved through three separate instruments:
- Technical Collaboration Licence Agreement (30.01.2019): RWCL granted SEPL an exclusive, royalty-bearing licence for wastewater treatment patents. Under Clause 12.1, disputes were to be referred to arbitration in Seoul under the Law of the Republic of Korea.
- Joint Venture Agreement and Share Holding Agreement (01.10.2021): Executed between Uplap (representing the ‘Indian Group’) and Lee (representing the ‘South Korean Group’) to create a joint venture company, Rothwell Water (India) Private Limited (RWIPL), for sewage treatment plants under the ‘ROTHWELL’ brand. Article 43 stipulated arbitration in Mumbai under Indian law, while Article 25 contained a supersession clause confirming it as the entire agreement on the subject matter.
- Memorandum of Understanding (01.02.2023): Executed following a sub-contract between JWIL Infra Ltd. and RWCL for the Municipal Corporation of Greater Mumbai’s Bhandup project. SEPL undertook liaison, customs clearance, logistics, and port handling services. Clause 9 provided for arbitration in Mumbai under the Arbitration and Conciliation Act, 1996, and Clause 10.8 superseded prior agreements regarding the subject matter.
Tensions arose on October 11, 2024, when SEPL issued a termination notice for the JVA, citing breaches of the non-compete covenant (Article 24.1) via the incorporation of RBIPL, business losses stemming from rejected projects due to delayed technical inputs, and unpaid dues of Rs. 4,24,35,647/- out of decanter systems worth Rs. 15,27,72,420/- procured under the MoU. SEPL demanded Rs. 20,00,00,000/- for business loss and Rs. 4,24,35,647/- under the MoU.
RWCL disputed the termination on October 28, 2024, asserting that the controversy was directly linked to the 2019 Licence Agreement and governed by its Korean arbitration clause. Subsequent arbitration notices issued by SEPL on November 28, 2024, under Article 43 of the JVA and Clause 9 of the MoU led to the filing of Section 11 petitions before the Supreme Court. A prior referral to mediation by the Court failed to yield a settlement.
Submissions of the Parties
Appearing for the Respondents, Senior Counsel Sudhanshu Choudhari argued that the JVA and MoU were intrinsically intertwined with their “mother agreement”—the Licence Agreement of 2019. He submitted that Clause 12.1 of the Licence Agreement, providing for arbitration in Korea, must prevail. He noted that RWCL had already issued an arbitration notice on August 8, 2025, alleging breaches of the exclusivity clause under the Licence Agreement. Furthermore, it was argued that RBIPL was an independent non-signatory entity that could not be bound by the arbitration agreements, and that the Petitioners had failed to pursue amicable settlement prior to invoking arbitration.
Countering these submissions, Senior Counsel C.U. Singh, appearing for the Petitioners, argued that the JVA and MoU operated independently of the Licence Agreement, as explicitly established by Article 25 of the JVA and Clause 10.8 of the MoU, both of which contained supersession clauses. He further contended that RBIPL was a wholly owned subsidiary of RWCL formed in direct contravention of the non-compete covenant in Article 24.1 of the JVA to compete unfairly with the joint venture entity, rendering it a necessary party to the reference.
Court’s Analysis and Findings
Delivering the judgment for the bench, Justice Joymalya Bagchi highlighted the narrow confines of the referral court’s jurisdiction under Section 11(6-A) of the 1996 Act, citing the precedent in In re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, (2024) 6 SCC 1.
The Court observed:
“Section 11(6-A) of the 1996 Act prescribes the principle of minimal judicial intervention by restricting the scope of inquiry to prima facie existence of the arbitration agreement. Once the prima facie existence of an arbitration agreement is adduced before the Referral Court, it ought to appoint an arbitrator and refer the parties to arbitration.”
Examining the three contracts, the bench found that each agreement operated in a distinct commercial sphere: the Licence Agreement governed the licensing of patents; the JVA established a corporate entity for sewage treatment plants; and the MoU concerned liaison, logistics, and handling services for specific municipal works.
The Court held:
“Thus, the License Agreement, JVA and MoU prima facie operate in different fields and the disputes arising exclusively under the JVA and MoU are amenable to the dispute resolution clauses engrafted therein and not the clause in the License Agreement.”
Addressing the Respondents’ contention that the claims overlapped with the ongoing Korean arbitration under the Licence Agreement, the bench clarified that such overlap cannot prevent a reference at the threshold:
“Mr. Choudhari’s argument that the disputes pertaining to the JVA and MoU cannot be adjudicated in isolation and overlap with claims under the License Agreement in respect whereof his clients have already raised a dispute for arbitration in Korea, would fall within the jurisdiction of the arbitrator vis-à-vis the scope and ambit of disputes amenable to arbitration under the JVA/MoU, and cannot constitute a ground to refuse a reference at the threshold.”
Regarding the status of the non-signatory subsidiary, RBIPL, the Court noted:
“Similarly, the other issue that RBIPL is an independent non-signatory entity which is not bound by the arbitration agreement is a contentious one as RBIPL is a wholly owned subsidiary of RWCL (a signatory) and is alleged to have been incorporated by RWCL in derogation of the terms of the JVA. Given this situation, such issue needs to be relegated to the arbitrator for appropriate adjudication.”
Decision
Finding that valid arbitration agreements existed in both the JVA and the MoU, the Supreme Court allowed the arbitration petitions and appointed Justice Ramesh Deokinandan Dhanuka, former Chief Justice of the Bombay High Court, as the sole arbitrator. The arbitrator was granted liberty to determine his own fees, with no orders passed as to costs.
Case Details
Case Title: Shubham Equipment Private Limited & Anr. vs. Rothwell Water Company Limited & Ors.
Case No.: Arbitration Petition (Civil) No. 7 of 2025 with Arbitration Petition (Civil) No. 8 of 2025
Bench: CJI Surya Kant, Justice Joymalya Bagchi, and Justice V. Mohana
Date: October 08, 2026
