Abstract

Indian case laws have been historically inconsistent when addressing the non-arbitrability of different subjects. As such, the Supreme Court of India in the case of Vidya Drolia and Ors v Durga Trading Corporation took the opportunity to bring finality to the issue of how to determine non-arbitrability and who is empowered to make that determination. The Court expanded on several standards applied by the Supreme Court over the years and laid down a comprehensive fourfold test of non-arbitrability. It also determined that while arbitral tribunals should ideally decide non-arbitrability, a court may also do so while acting as an appointing authority, while ascertaining the validity of the arbitration agreement. This article analyses the impact of this decision on arbitration in India, both in terms of the immediate and future application of the fourfold test, and the newfound power of courts to scrutinize arbitration agreements while acting as an appointing authority.