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IN THE HIGH COURT OF DELHI
Rajiv Shakdher, Jasmeet Singh, JJ.
National Highways Authority of India - Appellant
Versus
Supreme Panvel Indapur Tollways Private Limited - Respondent
FAO(OS) (COMM) 52 of 2022 & CM No. 10331 of 2022
Decided On : 21-03-2022




The court reinforced arbitration principles, emphasizing the arbitral tribunal's autonomy and the need for judicial restraint regarding the merits of ongoing arbitration disputes.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Dispute regarding termination of Concession Agreement - Respondent sought stay on termination notice, but the court restrained only coercive actions and not the termination itself - Arbitral tribunal constituted to resolve disputes. (Paras 3, 6, 8)

(B) Judicial discretion - Court clarified that their observations would not impact the merits of the case, emphasizing the arbitral tribunal's independence in deciding the issues before it. (Paras 4, 6)

Facts of the case:
The case revolved around a Concession Agreement dated 21.01.2011 between the appellant and respondent, with a notice of termination issued due to disputes leading to the respondent's petition under Section 9 of the Arbitration Act. The court had previously stayed coercive actions following the termination notice. (Paras 3, 6)

Findings of Court:
The matter was referred to the arbitral tribunal for resolution, with parties permitted to advance their claims without impacting the case's merits, while interim measures were suggested for ongoing tender processes. (Paras 8, 5)

Issues: The central issues concerned the legitimacy of the termination notice and the implications for the ongoing arbitration proceedings. (Paras 5, 6)

Ratio Decidendi: The court ruled that it would not interfere with the arbitral tribunal's decision-making and the parties are free to present their case, demonstrating the judiciary's respect for arbitration as an alternative dispute resolution mechanism. (Paras 4, 7)

Result: Appeal disposed of as per terms set forth, with pending applications closed.

Table of Content
1. disputes and previous orders regarding termination notices. (Para 2 , 3)
2. contentions regarding the implications of the stay order. (Para 4 , 5)
3. direction to arbitral tribunal for dispute resolution. (Para 6)
4. conclusion and disposal of the appeal. (Para 7)
5. temporary measures pending arbitral tribunal's decision. (Para 8 , 9)

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (Oral)--On the previous date, i.e., 16.03.2022, we had heard the learned counsel for the parties at some length, and, thereafter, captured, in a sense, the lay of the land.

2. For the sake of convenience, the relevant part of the order dated 16.03.2022 is set forth hereafter:

    "1. This appeal is directed against the order dated 08.02.2022, passed by the learned single judge in OMP(I)(Comm) No.382/2021.

    2. To be noted, this order was passed in a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 [in short, "the Act"] by the respondent.

    3. The record shows that the petitioner and the respondent, inter alia, entered into a Concession Agreement dated 21.01.2011 [in short "CA"].

    3.1. It appears that the disputes arose between the parties which led to the appellant serving upon the respondent, a notice of intention to terminate the CA. This notice was issued on 16.10.2020.

    3.2. This was followed by a termination notice dated 17.11.2021. It is this step, which impelled the respondent to approach the Court in a Section 9 petition.

    3.3. The learned single judge, via order dated 23.11.2021, directed the appellant not to take coercive steps, pursuant to the termination notice dated 17.11.2021.

    3.4. The impugned order i.e., the order dated 08.02.2022, which followed this order i.e., the order dated 23.11.2021 was, concededly, passed, based on an oral clarification sought on behalf of the appellant. The relevant observations made in the impugned order of the learned single judge are captured in paragraphs 5 to 7. For the sake of convenience, the same are extracted hereafter:

    "5. Pertinently, the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 has been preferred by the petitioner seeking stay of respondent's communication dated 17.11.2021 and thereby, restraining the respondent from any coercive action upon it. In this light, this Court vide order dated 23.11.2021 had restrained the respondent to take any coercive action pursuant to its communication dated 17.11.2021. It is made clear that vide order dated 23.11.2021, this Court has not stayed the termination of the contract, as has been mentioned in Para-16 of communication dated 17.11.2021, however, stayed the consequence, which are mentioned in Para-17 thereof.

    6. The arbitral tribunal has already been constituted and nothing survives for consideration in the present petition. Accordingly, parties are directed to appear before arbitral tribunal for redressal of their disputes. At the request of learned counsel for the petitioner, the present petition be listed before the arbitral tribunal as an application filed under Section 17 of the Act, which shall be considered in accordance with the law. Till the time the application under Section 17 of the Act is decided by the Tribunal, the directions given in Para-8 of the order dated 23.11.2021 shall remain in force. However, once the tribunal commences the hearing on the said application and proceed to decide the same, it shall be at liberty to modify or alter the order dated 23.11.2021 passed by this Court, if so required.

    7. Needless to say, all the issues have been kept open for parties to be agitated before the tribunal and the arbitral tribunal is free to consider and decide the same under appropriate provisions of law, uninfluenced by any observations made in any order in this petition."

    4. Mr. Parag P Tripathi, learned senior counsel, who appears on behalf of the appellant, says that the appellant is aggrieved by that portion of the impugned order, whereby

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