Practice Of Filing Applications In Disposed Of SLPs In Order To Side-Step Arbitration Process Should Be Discouraged: SC

The Supreme Court has observed that the practice of filing applications in disposed of Special Leave Petitions in order to side-step the arbitration process should be discouraged.

“We are further of the opinion that this practice of filing applications in disposed of SLPs in order to side-step the arbitration process should be discouraged, and such applications must not be entertained by this Court”, Justice Krishna Murari and Justice Sanjay Karol remarked.

The Court made this observation while dealing with applications filed in a Special Leave Petition, which was disposed of by the Court in August 2012. While disposing of the matter, a direction was issued for the same to be referred to arbitration. In the same order, a further direction was also issued by the Court to maintain status quo till the Arbitrators entered reference.

Subsequently, the arbitration proceedings commenced and even after notice was served to the applicant herein, they did not appear before the Tribunal. During the arbitration proceedings, the Tribunal passed an order for maintaining status quo till the disposal.

The applicant now sought to vacate the status quo granted by the tribunal, and further vacate the rights of the SLP petitioner.

Advocate Shaquir Ali appeared for petitioners whereas Advocate Vignesh Singh appeared for Respondents.

“In the present case at hand, the reliefs sought by the applicant through the present applications are issues that are already pending adjudication before the Arbitral Tribunal, and no award has been passed regarding the same as of now. The provisions of the Arbitration and Conciliation Act,1996, as well as a catena of judicial pronouncements of this Court have time and again stated that the courts normally ought not interfere with arbitral proceedings, especially till the time an award is not passed.”, the Court observed.

Thus, the Court dismissed the applications. The Court kept it open for the parties to raise all issues on merits before the Arbitral Tribunal.

Cause Title- Narsi Creation Pvt. Ltd. and Anr. v. State of Uttar Pradesh and Ors.

Click here to read/download Order