Supreme Court Appoints Arbitrator for Luxury Sands

Authority: Supreme Court of India (Civil Appellate Jurisdiction)

Order Date: 07 August 2026

Case Overview

• Parties: Appellant K. Ramabhadran vs. Respondent M/S. Luxury Sands Kerala Private Limited and others.
• Background: A Memorandum of Understanding dated 24 June 2009 stipulated purchase of a metal crusher unit and approximately 35 acres of quarry land at Elanji, Ernakulam District for a total consideration of Rs 17.15 crore. The appellant paid an advance of Rs 10 lakhs. The performance deadline was initially 10 August 2009, later extended to 30 November 2009 by a supplementary MoU dated 06 November 2009, under which an additional advance of Rs 1 crore was paid, bringing total advances to Rs 1.10 crore. Clause 20 of the MoU provided that any dispute arising out of the MoU would be settled by arbitration.
• Dispute Trigger: It was later discovered that the respondents possessed only about 20 acres of the agreed‑upon land, not the 35 acres, preventing the appellant from completing the purchase within the extended timeframe.
• Initial Arbitration Attempt: The appellant filed Arbitration O.P. No. 266/2010 under Section 9 of the Arbitration and Conciliation Act, 1996, before the District Judge, Ernakulam, seeking an injunction against alienation of the property. The petition was dismissed on 17 April 2010 on the ground that there was no valid arbitration clause.
• High Court Proceedings: The appellant appealed (Arbitration Appeal No. 26/2010). The High Court, on 22 June 2023, clarified that the district court’s finding on the arbitration clause was only a prima facie opinion and not binding on subsequent proceedings.
• Renewed Arbitration Request: On 2 April 2024, the appellant issued a notice invoking arbitration, proposing a sole arbitrator and seeking a refund of the Rs 1.10 crore advances with interest at 18% per annum, together with damages and costs.
• Respondents’ Reply: On 16 April 2024, the respondents denied any breach, asserted that the claim was time‑barred, and reiterated that there was no valid arbitration clause.
• Section 11(6) Application: The appellant filed Arbitration Request No. 150/2024 under Section 11(6) of the Act before the High Court. The High Court dismissed the application on 30 June 2025, relying on Aslam Ismail Khan v. ASAP Fluids Pvt. Ltd (2025) 1 SCC 502, holding the claim to be hopelessly time‑barred.

Final Outcome

• The Supreme Court allowed the appeal and set aside the High Court order dated 30 June 2025.
• Hon’ble Mr. Justice A. M. Shaffique, former Judge of the Kerala High Court, was appointed as the Sole Arbitrator to adjudicate all disputes arising from the MoUs dated 24 June 2009 and 6 November 2009, including the limitation issue raised by the respondents.
• The seat and venue of the arbitration were fixed at Ernakulam, Kerala.
• The arbitrator was given liberty to fix his own fees.
• All pending applications, if any, were disposed of.

Topics: Arbitration, Contract Dispute