Bombay HC – Doctrine of Severability Applied to Arbitral Claims and to Split the Arbitral Award in Arenel case

By the judgment dated 8.9.2025, the Section 34 Court has set-aside the arbitral award dated 2.12.2019 in favour of the claimant for refund of USD 165,102.10 with interest, costs, etc.

The claimant – foreign company manufacturing biscuits and sweets in Zimbabwe – had MoU with the respondent for packaging materials.

However, the disputes about the packing materials not complying with contractual specifications and emitting odour were referred to the arbitration.

The Arbitrator allowed the claim of the claimant and rejected the counter claim vide Award dated 2.12.2019.

However, the Single Bench allowed section 34 petition vide judgment dated 8.9.2025.

The Division Bench in section 37 appeal held that there is no reason to interfere with section 34 judgment.   However, the award in favour of the claimant for USD 43,500.25 in respect of payment made to the respondent for 5^th invoice was restored and rest of the Award was quashed.

Judgment dated 9.3.2026 of the Division Bench High Court of Bombay (OS) in Commercial Arbitration Appeal (L) No.30982 of 2025 in Commercial Arbitration Petition No.349 of 2020 of Arenel Private Limited   Vs.  M/s. Aakash Packaging with connected matter.