Q: Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Q: Can a landlord unilaterally cancel a 99‑year registered lease deed by calling it a licence?

No. In Vivekananda Kendra v. Pradeep Kumar Aggarwalla [2026 INSC 199], the Supreme Court held that a registered instrument with clear lease terms cannot be treated as a licence. Such unilateral cancellation is invalid, and the lessee’s possession and rights must be protected.

Q: Does the usage of the word “can” instead of “shall” in a contract or statute make a difference?

Yes. The Supreme Court in Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. [2026 INSC 384] clarified that “shall” creates a binding obligation, while “can” (or “may” ) is optional and gives discretion. For entrepreneurs, this means that if your agreement says you can do something (like refer a dispute to arbitration or a council), you are free to choose whether to do so. But if it says you shall , you are legally bound to follow that procedure without exception.

Question 1

Is it necessary for MSMEs to opt for arbitration by the Micro and Small Enterprises Facilitation Council (MSEFC)?

dhiraj.sharma@justicum.com · Accepted Answer

No, it is not mandatory. Section 18(1) of the MSMED Act, 2006 states that any party may refer a dispute to the MSEFC. This means MSMEs have the option to use the Council for conciliation and arbitration, but they can also pursue other remedies such as civil courts or contractual arbitration. However, if a dispute is referred to the MSEFC, its process takes precedence and becomes binding under the Arbitration and Conciliation Act, 1996. [Pawwan Khanna vs Deepak Bagga-Del. HC. on 03-Jul-2026]

Question 2

Can a buyer insist that an MSME must arbitrate as per the arbitration clause in the agreement if the MSME has already approached the MSME Facilitation Council (MSEFC)?

dhiraj.sharma@justicum.com · Accepted Answer

No. Once an MSME refers a dispute to the MSEFC under Section 18 of the MSMED Act, 2006, the Council’s process of conciliation and arbitration takes precedence. The Supreme Court in Gujarat State Civil Supplies Corp. Ltd. v. Mahakali Foods Pvt. Ltd. (2022) held that the MSMED Act overrides contractual arbitration clauses. This means the buyer cannot compel arbitration under the agreement while MSEFC proceedings are pending.

Question 3

Can an MSME go to civil court during a pending case with the MSME Facilitation Council?

dhiraj.sharma@justicum.com · Accepted Answer

No. once a dispute is referred to the MSEFC, civil courts cannot entertain parallel proceedings. The Council has exclusive jurisdiction, and any challenge must be made after its award under the Arbitration and Conciliation Act. [Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. & Ors. (2022) 2 SCC 150]

Question 4

Is an arbitration clause valid if it allows one party to appoint a sole arbitrator of its own choice in case of a dispute?

dhiraj.sharma@justicum.com · Accepted Answer

No. The Supreme Court has consistently held — in TRF Ltd. (2017), Perkins Eastman (2019), and most recently in Bhadra International (2026, Constitution Bench) — that unilateral appointment clauses are invalid. They violate the principles of independence, impartiality, and equality under the Arbitration and Conciliation Act, 1996. Courts will step in under Section 11(6) to appoint an impartial arbitrator instead.

Question 5

If a court decree orders me to pay the balance sale consideration within three months, but I miss that deadline, can I still get the property through execution of the decree?

dhiraj.sharma@justicum.com · Accepted Answer

Yes, but only if you can prove continuous readiness and willingness to perform your part of the contract. In Habban Shah v. Sheruddin [2026 INSC 451] and Jayamma case [2026 INSC 651], the Supreme Court clarified that missing a deadline or filing late does not automatically bar relief. However, if you fail to show financial capacity and genuine intent at the relevant time, the decree or claim becomes inexecutable.

Question 6

What is the difference between a lease and a licence under Indian property law?

dhiraj.sharma@justicum.com · Accepted Answer

A lease transfers a legal interest in immovable property and grants exclusive possession for a fixed term with rent, whereas a licence merely gives permission to use property without transferring any interest. The Supreme Court in Associated Hotels of India Ltd. v. R.N. Kapoor (AIR 1959 SC 1262) held that the real test is whether exclusive possession is given: if yes, it is a lease; if not, it is a licence. Similarly, in Rajbir Kaur v. S. Chhokar (AIR 1988 SC 1845), the Court reiterated that substance prevails over labels — even if an agreement is called a “licence,” if it grants exclusive possession, it will be treated as a lease.

Question 7

Can a landlord unilaterally cancel a 99‑year registered lease deed by calling it a licence?

dhiraj.sharma@justicum.com · Accepted Answer

No. In Vivekananda Kendra v. Pradeep Kumar Aggarwalla [2026 INSC 199], the Supreme Court held that a registered instrument with clear lease terms cannot be treated as a licence. Such unilateral cancellation is invalid, and the lessee’s possession and rights must be protected.

Question 8

Does the usage of the word “can” instead of “shall” in a contract or statute make a difference?

dhiraj.sharma@justicum.com · Accepted Answer

Yes. The Supreme Court in Nagreeka Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd. [2026 INSC 384] clarified that “shall” creates a binding obligation, while “can” (or “may”) is optional and gives discretion. For entrepreneurs, this means that if your agreement says you can do something (like refer a dispute to arbitration or a council), you are free to choose whether to do so. But if it says you shall, you are legally bound to follow that procedure without exception.