Indian Golf Union and the Lingering Ghost of common law severability in India

Abstract

Abstract While India formally recognizes the doctrine of severability of an arbitration agreement from the contract, this recognition gets strained when subjected to novation, or invalidation of the contract. Until the enactment of the Arbitration and Conciliation Act 1996, the Supreme Court’s decision in Kishorilal validly held the field on the subject. However, the enactment of the Act muddled this clarity. The Act affirmed Kishorilal’s ratio on severability in the event of termination of contract, but reversed it in the event of novation. Yet, there are a series of decisions that have still chosen to rely upon Kishorilal—ignoring the effect of the Act. Therefore, severability has become the subject of great confusion under Indian law. The Calcutta High Court’s recent decision in Indian Golf Union brings this confusion to the forefront. We use this decision as a platform to trace the development of the doctrine under Indian law and propose a set of guiding principles to help demystify its application.