Arth Micro Finance v. Shivalik Small Finance Bank reinforces that the Arbitration and Conciliation Act, 1996, for all the procedural freedom it gives tribunals once properly constituted, remains built on the single non-negotiable requirement of genuine party consent. Businesses relying on arbitration clauses should treat proof of consent to a specific tribunal as essential documentation, not a formality, and should recognise that an unaddressed bias objection at the appointment stage can later unravel every order a tribunal issues, however urgent or far-reaching.
Read together with TRF Ltd. and Perkins Eastman, this ruling confirms that Indian courts are increasingly willing to look past the formal existence of an arbitration clause and ask whether both parties genuinely agreed to the tribunal deciding their dispute. Where that consent cannot be established, the Supreme Court has now made clear, the arbitration never began in the eyes of the law, regardless of how far it appeared to progress before the defect was uncovered.