Kauser

In Kauser, a dispute concerned rectification of shares in the company’s register and alleged fraudulent transfer of shares. Petitioners sought stay of Company Bench proceedings in the High Court in order to proceed with arbitration. The High Court rejected this application; matter reached the Supreme Court.

Held: Courts should encourage and facilitate a pro-arbitration environment by not pre-empting the jurisdiction of arbitrators but supporting the arbitral process. The role of the courts is to adopt a resolute stance of noninterference, ensuring parties adhere to their agreement.

Court’s Observations:
“Courts should adopt a resolute stance of non-interference, encouraging arbitration and other forms of ADR, such as mediation, as the preferred modes of resolving disputes.”

“By respecting arbitration agreements and fostering an environment conducive to swift dispute resolution, courts can play a pivotal role in alleviating case backlogs.

“In enforcing an arbitration agreement, the courts’ role is not to pre-empt the jurisdiction of the arbitrators but to support the arbitral process.”

“Promoting arbitration is not merely a legal necessity but also an economic and commercial imperative for ensuring the country’s progress and prosperity.”