Jiya Lal Bhardwaj, Judge

The respondents-State/applicants have preferred these applications under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act, 1996’), seeking direction to refer the parties to mediation in view of Clause 53 of the Pre-Implementation Agreement (hereinafter referred to as ‘PIA’) dated 15.03.2011, thereby upholding the sanctity of the Arbitration Agreement voluntarily executed between the petitioner and the respondents/applicants.

2. For the sake of convenience and for deciding both applications, the facts of CWP No.1816 of 2018, are taken.

3. Before considering the application for referring the dispute to the Arbitrator, the prayers made in the writ petition are reproduced hereunder:-

“a) Issue a writ of mandamus declaration or any other appropriate writ, order or direction holding the action of the respondents in failing to decide the representation dated 16.09.2017 of the petitioner seeking withdrawal from the Reoli-Dugli Hydro Electric Power Project in District Lahaul & Spiti, Himachal Pradesh as violation of Article 14 of the Constitution of India and;

(b) Issue a writ of mandamus or any other appropriate writ, order or direction declaring that the Reoli-Dugli Hydro Electric Power Project in District Lahaul & Spiti, Himachal Pradesh has become techno-economically unviable and consequently direct the respondents to refund the petitioner the Upfront Premium Deposit of INR 84,00,00,000/- (Rupees Eighty Four Crores) as deposited by the petitioner on 08.11.2011 along with interest at the rate of 18% per annum from the date of deposit till the date of refund.

c) To pass a writ of mandamus directing the respondents to refund the upfront premium of Rs. 84,00,00,000/- (Rupees Eighty Four Crores) so deposited by the petitioner and quashing and setting aside the impugned Annexure P-B dated 23.11.2019 issued by respondent No.2 being illegal, unjust, arbitrary and against the provisions of natural justice.”

4. This Court had issued notice in the writ petition on 06.08.2018 to the respondents/applicants and the status quo as on that day was ordered to be maintained.

5. The respondents/applicants filed reply to the petition on 22.09.2018, and raised preliminary objection that the petition is not maintainable as the petitioner has not exhausted the remedy available to it, under Clause 53 of PIA, which provides that “any difference and/or disputes arising any time between the parties out of this PIA/IA or interpretation thereof shall be endeavored to be resolved by the parties hereto by mutual negotiations, failing which, the matter shall be referred to the Arbitrator to be appointed as per provisions of the Act, however, all disputes shall be settled within the jurisdiction of Courts of Himachal Pradesh.”

6. The record shows that the matter was heard by this Court on different dates and on 21.03.2024, learned senior counsel for the petitioner had concluded his arguments and at the request of learned counsel for the respondents/applicants, the matter was adjourned to 05.04.2024. Thereafter, on numerous occasions, the respondents/applicants sought time to argue the matter. However, instead of arguing the matter, the respondents/applicants filed application on 10.11.2025 seeking direction to refer the parties to arbitration, in view of Clause 53 of ‘PIA’ dated 15.03.2011.

7. It has been averred in the application that the petitioner is seeking refund of upfront premium of Rs.84 Crores deposited on 08.01.2011 along-with interest @18% per annum and as per order dated 21.03.2024, this Court had allowed the petitioner to amend the prayer clause, thereby permitting it to also seek the quashing of termination letter dated 23.11.2019, on the ground that the same is illegal, arbitrary and violative of the principles of natural justice.

8. It has further been averred that in the year 2008, the respondents/applicants had invited bids for setting up of 420 MW Hydro Electric Power Plant in