Date: August 24, 2026
Legal / Strategic Disclosures
Supreme Court Order Details
The Hon'ble Supreme Court of India passed an order dated August 11, 2026, in the matter of Special Leave Petition No. 8020 of 2021 (Kirloskar Brothers Limited Vs. Atul Chandrakant Kirloskar & Ors.) with SLP No. 8221 of 2021 and SLP No. 13070 of 2021.
The Court disposed of all petitions and directed constitution of a three-member Arbitral Tribunal to adjudicate disputes arising from a Deed of Family Settlement (DFS) dated September 11, 2009, executed among members of the Kirloskar family.
Arbitral Tribunal Constitution
The Hon'ble Supreme Court appointed:
- Justice Nitin Madhukar Jamdar, former Chief Justice of Kerala High Court, as nominee Arbitrator on behalf of Kirloskar Brothers Limited
- Justice K.R. Shriram, former Chief Justice of Madras and Rajasthan High Courts, as nominee Arbitrator on behalf of contesting Respondents
The nominee Arbitrators are to jointly appoint the Presiding Arbitrator, preferably within four weeks. The seat of arbitration shall be Pune.
Background of Dispute
The dispute arises from a Deed of Family Settlement dated September 11, 2009, executed among members of the Kirloskar family (Sanjay Kirloskar, Atul Kirloskar, Vikram Kirloskar, Rahul Kirloskar, and late Gautam Kulkarni) for themselves and their respective family members. The DFS formalized separation of businesses and group companies of the Kirloskar Group among different family branches.
Clause 20 of the DFS contains an arbitration clause for "any issue arising out of interpretation of this DFS including schedules thereto."
The company's case alleges that Kirloskar Oil Engines Ltd. (Respondent No. 21) acquired La-Gajjar Machineries Pvt. Ltd. (Respondent No. 22) in breach of non-compete obligations under Clause 15 of the DFS. Additional disputes concerned Sanjay Kirloskar's non-reappointment to the board of Respondent No. 23-company, which holds Kirloskar Group trademarks.
Legal Proceedings History
- June 2017: Parties attempted mediation before Dr. Vijay Kelkar
- May 2018: Mediation concluded without resolution
- June 2018: Kirloskar Brothers Limited and Mr. Sanjay Kirloskar instituted Special Civil Suit No. 798/2018 before Civil Judge, Senior Division, Pune, seeking specific performance of DFS, damages, injunction restraining competing business, and reliefs concerning reconstitution of Respondent No. 23 company's board
- December 7, 2020: Civil Judge rejected application for arbitration reference
- May 3, 2021: Bombay High Court allowed appeal and referred disputes to arbitration
- August 11, 2026: Supreme Court disposed of SLPs and directed arbitration
Key Court Directives
The Hon'ble Supreme Court clarified that:
- All contentions on arbitrability, including true scope of Clause 20 of DFS and whether non-signatory Respondents are bound by arbitration agreement, are left open
- These issues shall be decided by Arbitral Tribunal as preliminary issue before proceeding to merits of claims
- Observations made by Bombay High Court in impugned Judgment shall have no binding effect on Arbitral Tribunal
- All issues shall be decided on their own merits
Financial Impact Assessment
The company states: "The financial impact, if any, of the aforesaid proceedings cannot be presently ascertained. The Company will keep the stock exchanges informed of any further material developments in the matter."