HC Under Article 226 Should Not Entertain A Dispute Which Is Arbitrable Unless There Is An Issue Of Public Interest: Supreme Court

Team SoOLEGAL 2 Apr 2021 3:13pm

HC Under Article 226 Should Not Entertain A Dispute Which Is Arbitrable Unless There Is An Issue Of Public Interest: Supreme Court

On 26th March, 2021, Supreme Court was hearing an appeal which was filed by Rapid Metrorail Gurgaon Ltd.(RMGL) against the order which was passed by the Punjab and Haryana High Court in a writ petition filed by Haryana Mass Rapid Transportation Corporation (HSVP). Justice DY Chandrachud, Justice MR Shah and Justice Sanjiv Khanna after hearing the appeal was of the view that, High Court should not entertain any dispute which is arbitrable unless there is a fundamental issue of public interest.

In this case there was an arbitration clause but still the High Court had entertained the writ petition. According to the Supreme Court, the High Court was concerned about a fundamental public interest issue in which the inconvenience that would be caused to commuters who use the rapid metro as a mode of mass transportation in Gurgaon.

The Court had noted that, the interference of High Court was mandatory because if there was no interference of High Court then, it would have led to the disruption of rapid metro lines and it would also affect the general public. As a measure of caution Supreme Court had clearly stated that, High Court in its jurisdiction under Article 226 of Indian Constitution should not entertain a dispute which is arbitrable. The Court had also stated that, remedies are available under Section 9 and Section 17 of Arbitration and Conciliation Act, 1996.

The Court had directed that HSVP must within a period of six months from this present order deposit 80 percent of the debt due as per the reports of the auditors in the Escrow Account. The Court had also stated that, RMGL and Rapid MetroRail Gurgaon South Limited (RMGSL) on one hand and HSVP on the other hand can pursue their rights and remedies in pursuance of arbitration clause contained in the Concession Agreements on all 67 matters of Part F which is falling under the ambit of the arbitration agreement. The Court had also directed that, after following the above mentioned direction RMGL and RMGLS must execute and handover all the documents to HSVP which are necessary to accomplish the transfer of operation. By passing the above orders the Court had disposed of the appeal.


Tagged: Article 226   Supreme Court   Rapid Metrorail   Gurgaon   HSVP   Punjab and Haryana High Court   Justice DY Chandrachud   Justice MR Shah   Justice Sanjiv Khanna   High Court   Arbitration and Conciliation Act   Indian Constitution  
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