KINETIC GREEN ENERGY AND POWER SOLUTIONS LIMITED v. SAERA ELECTRIC AUTO LIMITED

2026 INSC 1057 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.13117 OF 2026 ARISING OUT OF SLP (CIVIL) NO. 31162 OF 2026

KINETIC GREEN ENERGY AND POWER SOLUTIONS LIMITED ... APPELLANT

VERSUS

SAERA ELECTRIC AUTO LIMITED ... RESPONDENT

JUDGMENT

1. Leave granted.

2. The present appeal arises from an order dated 20 th August 2026 passed

by the Division Bench of the High Court of Karnataka at Bengaluru in

COMAP No.396 of 2026, whereby the High Court, at the first hearing

of the appeal, stayed the order dated 6th August 2026 passed by the

Commercial Court, Bengaluru in Com. A.A. No. 279 of 2026 under

Section 9 of the Arbitration and Conciliation Act, 1996. The

controversy between the parties has its origin in three agreements

executed on 26th August 2025, namely, the Manufacturing Agreement, Signature Not Verified

Digitally signed by NEHA GUPTA the Supply and Distribution Agreement and the Intellectual Property Date: 2026.09.25 17:11:34 IST Reason:

Agreement. Under the Manufacturing Agreement, the respondent was

to exclusively undertake the manufacture of vehicles for the appellant

in accordance with the agreed specifications. The agreement contained,

inter alia, provisions concerning exclusivity and non-compete

obligations. The agreement stipulated its Effective Date and prescribed

a contractual term of twenty years. The parties thereafter proceeded

under the contractual framework which contemplated, amongst other

things, subsequent purchase orders and commencement of sales at a

later stage.

3. A dispute subsequently arose concerning the manufacture and sale by

the respondent of vehicles under the Mayuri brand, including Mayuri

Rattan, as also certain vehicles proposed to be introduced by it. The

appellant's case was that the vehicles in question were within the

contractual field of exclusivity and non-compete obligations and that

their continued manufacture, marketing and sale would defeat the very

protection which the agreements were intended to secure. The

respondent, on the other hand, contended that its Mayuri vehicles

constituted a pre-existing business, that the contractual definition of

"Vehicles" was narrower than that asserted by the appellant, and that

the agreements did not operate in the manner suggested by the

appellant. It was also contended that the contemplated commercial

arrangement had not really commenced, there having been no purchase

order for manufacture and no substantial monetary consideration

having passed between the parties. It was against this background that

the appellant approached the Commercial Court under Section 9 of the

Arbitration and Conciliation Act, 1996.

4. The Commercial Court considered the agreements, the material placed

by both parties and their respective submissions. It framed, amongst

others, the questions whether the appellant had established a

prima facie case and whether the balance of convenience and

irreparable injury justified interim protection. Both questions were

answered in the affirmative. The Commercial Court thereafter

directed, inter alia, that the respondent be restrained from taking steps

towards the launch, manufacture, marketing, supply, distribution or

sale of new vehicles or products similar to the vehicles contemplated

under the Manufacturing Agreement, and from continuing or taking

further steps towards manufacture, marketing, distribution and sale of

the existing Mayuri branded auto-shaped three-wheeler electric

vehicles, including Mayuri Rattan L5 Auto and similar variants. The

interim measures were expressly made operative for three months

or until constitution of the arbitral tribunal, whichever was earlier.

5. The respondent carried the matter in appeal under Section 37 of the

Arbitration and Conciliation Act, 1996. At the first hearing, the High

Court recorded that the arrangement between the parties was in the

nature of a joint venture, that the joint venture had not "taken off", and

that there did not appear to be any tangible consideration which had

flowed pursuant to the agreement. The High Court also noticed that the

respondent had been manufacturing certain models for several years,

some of which had been launched as early as 2023. On that reasoning,

the High Court stayed the order of the Commercial Court till the next

date of hearing. At the same time, the High Court directed that the

respondent would not launch any new vehicle and would maintain

accounts of all "auto-shaped vehicles" manufactured by it along with

their models.

6. At the time of hearing, the learned Senior Advocates appearing for the

parties, in unison, requested this Court to appoint a sole Arbitrator to

adjudicate the disputes arising between them in relation to the three

agreements. This Court had asked the parties to mutually discuss and

suggest a name for appointment as Arbitrator. Though the Arbitral

Tribunal was originally contemplated to consist of three arbitrators, the

parties have agreed before this Court that it may consist of a sole

arbitrator. The parties have submitted that Justice R.V. Raveendran,

former Judge of this Court, may be appointed as the sole Arbitrator to

adjudicate the disputes between them. The parties have further

submitted that they would file an application under Section 17 of the

Arbitration and Conciliation Act, 1996, before the learned Arbitrator

seeking appropriate relief, as permissible in law, and have requested

that the orders passed by the Commercial Court and the High Court be

set aside / modified.

7. Having heard the learned counsels appearing for the parties, we are of

the opinion that the constitution of an Arbitral Tribunal to adjudicate

the disputes between the parties would be the appropriate course of

action at this stage. Accordingly, we request Justice R.V. Raveendran,

former Judge of this Court, to kindly act as the sole Arbitrator in the

matter. We direct the parties to appear before the learned Arbitrator

Justice Sri R.V. Raveendran on the date as may be notified by the

Arbitral Tribunal.

8. Having appointed the learned Arbitrator and the Arbitral Tribunal

having thus been constituted, the parties shall be at liberty to file the

necessary application under Section 17 of the Act before the Arbitral

Tribunal seeking appropriate interim measures, as permissible in law.

Consequently, we modify the impugned order passed by the High

Court in paragraph No.12 which is to the effect “however, the appellant

will not launch any new vehicle” by substituting the same “that the

respondent herein will not launch or manufacture the vehicles as

described in Annexures - A and B of the agreement dated 26 th August,

2026 read with Clause 1.1 – specifications and vehicles as indicated

therein” which shall be operative till orders are passed on the

application that may be filed under Section 17 of the Arbitration and

Conciliation Act, 1996. It is made clear that the remaining portion of

the order in paragraph No.12 remains undisturbed and learned

Arbitrator would examine the application filed under Section 17 of the

Arbitration and Conciliation Act, 1996 being uninfluenced by the

observations made under the impugned orders.

9. Accordingly, the order dated 6th August 2026 passed by the

Commercial Court, Bengaluru, in Com. A.A. No. 279 of 2026 under

Section 9 of the Arbitration and Conciliation Act, 1996, and the order

passed by the Division Bench of the High Court of Karnataka at

Bengaluru in COMAP No. 396 of 2026 dated 20 th August 2026,

whereby the High Court, at the first hearing of the appeal, stayed the

aforesaid order dated 6th August 2026 passed by the Commercial Court,

are hereby set aside / modified. The High Court shall consign the

records of COMAP No.396/2026 to file in the teeth of this order.

10. With the aforesaid directions, the appeal stands disposed of. Pending

application(s), if any, shall stand disposed of.

(ARAVIND KUMAR)

(VIPUL M. PANCHOLI)

NEW DELHI; SEPTEMBER 24, 2026.