The main legal point established in the judgment is the Court's authority to modify the impugned order of the Arbitral Tribunal and issue specific directions regarding the conclusion of the hearing on the cure notice, the passing of a reasoned order, and the consideration of the representation, as well as setting aside the direction that further steps shall be taken by the Appellant only with the leave of the Arbitral Tribunal.

1. This is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (‘Act’) filed by the Appellant, Government of NCT of Delhi (‘GNCTD’) against an interim order dated 21st May, 2016 passed by the Arbitral Tribunal (‘AT’) in an application under Section 17 of the Act filed by the Respondent, Rosmerta HSRP Ventures Private Limited (‘RHVPL’).

2. The background to the present appeal is that pursuant to the notification dated 28th March, 2001 issued by the GNCTD under Section 41 (6) of the Motor Vehicles Act 1988 (‘MV Act’) read with Rule 50 of the Motor Vehicles Rules 1989, the Petitioner entered into a Concession Agreement (‘CA’) with the Respondent for a term of 15 years on 25th April, 2012 for execution of the High Security Registration Plates (‘HSRP’) project. According to the Appellant, several complaints were received by it regarding violations and irregularities committed by the Respondent in the execution of the HSRP project. On 10th March, 2014 a show cause notice (‘SCN’) was issued by the Appellant to the Respondent under Clause 10.1 of the CA asking to show cause why the proceedings for termination of the contract be not initiated against the Respondent.

3. In the meanwhile, the Respondent filed OMP No. 186 of 2014 in this Court under Section 9 of the Act in which the following order was passed on 26th March, 2014:

“Learned ASG informs that the Respondent has passed a show cause notice to the Petitioner giving 60 days cure period. He states, on instructions, that the Respondent shall act in terms of the contract.

In view of the said position, nothing survives in this petition and the same is accordingly disposed of as such.”

4. A reply was submitted to the Respondent on 15th May, 2014 inter alia stating that no breach of the contract was committed by it and in any event the breach, if any, stood already cured. Admittedly, no further steps ensued. On 19th September, 2014 the Respondent invoked the arbitration clause as stipulated under Clause 13.3 of the CA and sought reference of the dispute to arbitration.

5. On 16th January, 2015 the Respondent filed an application under Section 17 of the Act before the AT inter alia praying that an ad interim order restraining the Appellant from suspending the HSRP Project in the GNCTD or terminating the CA during the pendency of the arbitral proceedings. Further, an interim order was sought for a direction to the Appellant to “continue performing its obligations under the CA and permit the Claimant to continue performing its obligations under the agreement.” The other interim reliefs sought were to restrain the Respondent from taking steps from holding a fresh tender/auction or from taking any coercive steps against the Respondent in relation to the CA and deviating in any manner from the terms of the CA. A reply was filed by the Appellant to the above application.

6. On 16th January, 2015 the AT issued procedural directions to the parties and laid down the schedule with regard to the filing of the statement of claim, statement of defence and rejoinder. The statement of claim was to be filed by the Respondent on 16th February, 2015. However, it was filed on 11th March, 2015. The prayers in the claim were as under:

"(a) pass an award declaring that the show cause notice dated 10th March 2014 issued by the Respondent as null and void and illegal;

(b) pass an award declaring that the claimant is not in breach of the Concession Agreement dated 25th April 2012; and

(c) direct the payment of cost to the claimant;

(d) pass such other and further orders as this Hon’ble Court may deem fit and proper in the circumstances of the case.”

7. On 13th March, 2015, the Appellant filed an application before the AT under Section 16 of the Act in which it was contended that the AT did not have the jurisdiction to entertain the claim. The contention of the Appellant was that in order to clothe the AT with jurisdiction, it was incumbent on the Claimant to show that there were disputes betw