The court found that the contract in question is in the nature of a commercial contract and cannot be enforced specifically under the Specific Relief Act. The Tribunal held that NHAI's exercise of power under Article 37 was legal and not arbitrary.

JUDGMENT

Sanjeev Narula, J. (Oral). - The present appeals under Section 37 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the cAcf] impugn the order of Arbitral Tribunal dated 24th August, 2021, whereby: (i) an application filed under Section 17 of the Act by the Claimant - i.e., Panipat Jalandhar NHAI Toll way Pvt. Ltd. [hereinafter referred to as PJNTPL] has been dismissed; and (ii) a modification application filed by National Highways Authority of India [hereinafter referred to as 'NHAF] has been disposed of with certain directions merging into the order of interim measures, pending arbitration.

2. The facts of the case have been noted extensively by the Arbitral Tribunal. Therefore, recounting the same all over again is neither necessary or useful for deciding the present appeals. It would suffice to summarize the controversy between the parties succinctly. The same is as follows:

2.1. Parties executed Concession Agreement dated 9th May, 2008 [hereinafter referred to as the 'C.A.'] in respect of 'Six-Laning of Panipat-Jalandhar Section of NH-1 From Km 96.00 to Km 387.10 (length of 291.10 Km) in the State of Haryana and Punjab to be executed as BOT (Toll) on DBFO Pattern under NHDC Phase-V', granted to PJNTPL by NHAI for a period of fifteen years.

2.2. Later, NHAI issued Notice to Cure on 13th October, 2020, followed by a Notice of Suspension dated 14th December, 2020 and finally by aTermination Notice dated 5th March, 2020, invoking the provisions and rights vested under Article 37 of the C.A. on the ground of non-curing of the defects as mentioned therein.

2.3. The aforesaid notices were impugned in a petition under Section 9 of the Act, which this very Court also had the occasion to deal with at the pre-reference stage. [1] In the said proceedings, initially, certain interim orders were passed.[2] Subsequently, in a challenge to an interim order, the Division bench dismissed the petition.[3] However, in an appeal before the Supreme Court, the petition was restored to the file of the court for fresh adjudication.[4] At that stage when this matter was heard by this Court,[5] taking note of the fact that an Arbitral Tribunal had been constituted, the petition under Section 9 was converted into one under Section 17 which was then directed to be considered by the Arbitral Tribunal.

[1] OMP (I) (COMM) 421/2020.

[2] Order dated 12th March 2021 in OMP (I) (COMM) 421/2020.

[3] Judgment dated 13th April 2021 in FAO(OS)(COMM) 55/2021.

[4] Order dated 27th April 2021 in Civil Appeal No. 1691 of 2021.

[5] Order dated 28th May, 2021 in OMP (I) (COMM) 421/2020.

2.4. Pursuant thereto, the Arbitral Tribunal passed an interim order on 1st June, 2021, making inter alia the following interim arrangement:

"3. It is ordered that so far as the order passed terminating the contract is concerned, the same would be subject to the final order passed on the Section 17 application. However, in the interregnum, and till the application under Section 17 is heard and disposed of, the collection of toll fee at the three toll plazas would be carried out by the Respondent by engaging M/s. Eagle Infra India Ltd. as an interim arrangement, which upon collection shall be deposited in the connected Escrow Account on actual collection basis. The representative of the Claimant would also be present in each of the toll plazas so as to ascertain the total collection made on each day in each of the toll plazas.

4. As the Respondent has been carrying out the operation and maintenance of the highway at present, which is required to be carried out under the Concession Agreement, a onetime withdrawal for meeting such expenses on maintenance will be permitted from the Escrow account which could be made by the Respondent but only upon certification of the the IC / Independent Engineer. The accounts thereof regarding the nature and amount of withdrawal shall be placed before this Tribunal for information and necessary action if any within a week from the da