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2026 Supreme(Sikk) 16

2026 SHC 39
IN THE HIGH COURT OF SIKKIM AT GANGTOK
A. MUHAMED MUSTAQUE, CJ, BHASKAR RAJ PRADHAN, J.
TT Energy Private Limited – Appellant
Versus
The Principal Chief Engineer-cum-Secretary, Gangtok – Respondent
W.A. No. 4 of 2026
Decided On : 29-04-2026

Advocates Appeared:
For the Appellants : M.G. Ramachandran, Mani Gupta, Pranav Malhotra, Srishti Khindaria, Udwipt Verma, Parvin Manger
For the Respondents: Aarohi Bhalla, Thinlay Dorjee Bhutia, Sujan Sunwar

An arbitration clause survives under the doctrine of separability, precluding writ jurisdiction for factual disputes. Furthermore, parties cannot contractually curtail an arbitral tribunal's statutory power to grant interim relief, rendering such restrictive clauses unenforceable.

Headnote:(A) Constitution of India - Article 226 - Arbitration and Conciliation Act, 1996 - Sections 12, 17 - Scope of arbitration - Writ jurisdiction - Arbitration clause embedded in a contract survives for the purpose of dispute resolution by virtue of the doctrine of separability - High Court would not exercise extraordinary jurisdiction where effective alternate dispute resolution via arbitration is available - Clause in agreement seeking to restrict powers of arbitral tribunal regarding interim relief is unenforceable as it contradicts statutory mandates under the Act - Arbitral tribunal is vested with powers to issue necessary interim orders as provided under the governing Act. (Paras 7, 10)

Facts of the case:
The appellant challenged a lower court order dismissing a writ petition on the ground that the dispute regarding the continuation and execution of an infrastructure project should be resolved through arbitration as provided in the agreement. The respondent contended that the project was abandoned and the contract was no longer in force, leading to factual disputes. The parties eventually consented during these proceedings to submit the dispute to an independent arbitrator.

Findings of Court:
It was held that the existence of an arbitration clause precludes the invocation of the extraordinary writ jurisdiction of the High Court to determine disputed facts. Furthermore, specific contractual provisions attempting to limit an arbitral tribunal's statutory authority to grant interim relief are legally invalid and unenforceable. The court directed that all proceedings be conducted in accordance with the governing arbitration legislation.

Issues: Whether a writ petition is maintainable in the presence of an arbitration clause and whether contractual provisions limiting an arbitrator's statutory power to grant interim relief are enforceable.

Ratio Decidendi: The doctrine of separability ensures that an arbitration clause survives independently of the main agreement's existence. Parties cannot contractually divest an arbitral tribunal of powers granted under governing statute, particularly regarding the authority to issue protective or interim measures, as such restrictions are contrary to law.

Result: Appeal disposed of with the appointment of a sole arbitrator.

Table of Content
1. procedural history and subject matter of the dispute. (Para 1 , 2 , 3 , 6)
2. disputed questions of fact are appropriately resolved through arbitration rather than writ jurisdiction. (Para 4 , 5 , 7)
3. contractual clauses seeking to limit the statutory powers of the arbitral tribunal under section 17 are unenforceable. (Para 8 , 9 , 10)
4. court-directed appointment of an arbitrator and procedural stipulations. (Para 11 , 12 , 13 , 14)

JUDGMENT :

Bhaskar Raj Pradhan, J.

1. The present writ appeal has been preferred by the appellant assailing the judgment dated 09.04.2026 passed by the learned Single Judge of this Court in WP(C) No. 68 of 2025.

2. By the impugned judgment, the learned Single Judge after examining several judgments of the Supreme Court, without examining the merits of the case, came to the following conclusion:

10. It is therefore no more res integra that the arbitration clause cannot be ousted merely on the ground that the Court has powers to exercise its extraordinary jurisdiction under Article 226 of the Constitution.

11. In light of the foregoing discussions, it needs no reiteration that an arbitration clause was inserted in the IA and an Arbitrator selected by the contending parties. Be that as it may, regardless of the IA subsisting or not (as the dispute between the parties pivots on this point), the arbitration clause, which as already discussed, if it is embedded in the contract survives for the purpose of resolution of disputes between the parties, in view of the concept of separability which is therefore applicable to the instant case.

12. It may be noted that no discussions on the merits of the matter have ensued.

13. In conclusion, the Writ Petition is not maintainable and is disposed of accordingly.”

3. The writ petition had sought directions to quash the Request for Proposal (RFP) No. 022/Power/IPP/2025- 26/03 dated 19.09.2025 issued by the respondent no.1 for development of 99 MW Ting-Ting Hydroelectric Project and to direct the respondents to implement the project as per the existing Implementation Agreement dated 03.09.2008 with the petition.

4. The learned Senior Counsel for the appellant submits that the writ petition was maintainable as the Implementation Agreement dated 03.09.2008 between the parties was still in subsistence when the above RFP was issued.

5. The learned Additional Advocate General on the other hand contends that pursuant to the closure of the 99MW Ting-Ting Hydroelectric Project vide notification dated 08.02.2012, the appellant invoked the arbitration clause of the Implementation Agreement pursuant to which an Arbitrator was appointed on 22.08.2015. However, they did not pursue the matter any further which indicated that they had abandoned the project.

6. We have heard Mr. M.G. Ramachandran, learned Senior Counsel for the appellant as well as Mr. Aarohi Bhalla, learned Additional Advocate General for the State respondents.

7. We notice that the Implementation Agreement, which according to the appellant still subsists, had an Arbitration clause. Although, both the learned Senior Counsel for the appellant as well as the learned Additional Advocate General for the State respondents sought to place various facts in the present dispute, we are of the view that these factual disputes can be effectively examined in the arbitration proceedings and it may not be correct to examine it in the present writ appeal against the impugned judgment which has not examined the merits of the case. We are of the view that the Writ Court rightly did not delve into the merits of the divergent views of the parties in the writ proceedings. What compelled the State respondents to order closure of the hydroelectric project in the year 2012 and why the appellant did not pursue the arbitration proceeding initiated by them in the year 2014 are disputed questions of facts which we cannot effectively examine in the present writ appeal.

8. When we expressed our disinclination to interfere with the impug

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