In Appeal Against Arbitral Tribunal’s Order U/s. 17 A&C Act, HC Would Not Supplant Tribunal’s Conclusions Based On Intricate Factual Examination: Delhi HC

The High Court made such observations while dismissing an appeal filed by a construction Company- Shamlaji Expressway Private Limited assailing an order of the Arbitral Tribunal whereby the order staying the suspension notice issued by National Highways Authority of India (NHAI) against the appellant Company was vacated.

The Single-Judge Bench of Justice Sachin Datta said, “It is also notable that the legal position is well-settled to the effect that while entertaining the appeal from an order passed by the Arbitral Tribunal under Section 17 of the A&C Act, this Court would not supplant the conclusions drawn by the Arbitral Tribunal, which are based on an intricate factual examination of the matter.”

Advocate Tejas Karia appeared for the petitioner while Advocate Manish Bishnoi appeared for the Respondent-Authority.

The arbitral proceedings in this case, emanated from a Concession Agreement entered into between the parties for the work of “six laning Shamlaji to Motachilodha (93.210 km section) of the NH-8” in the State of Gujarat (Project). The respondent-NHAI had granted to the petitioner the exclusive right over the license and authority to construct, operate and maintain the project during the construction period of 730 days from the Provisional Commercial Operation Date (PCOD). When the project was not completed by the scheduled date, a time extension was granted to the appellant. However, the entire project could not be completed till the extended time period.

In view of the apparent difficulties, the respondent/NHAI issued a suspension notice citing defaults on the part of the appellant. Thereafter, the appellant approached the High Court under Section 9 of the A&C Act seeking stay of suspension notice and also praying for grant of PCOD. A Single Judge Bench stayed the effect in operation of the suspension notice. Being dissatisfied with the said order dated, the respondent filed an appeal under Section 37(1)(b) before the Division Bench. The Division Bench ruled that NHAI would be at liberty to take over the complete site and structures and execute the balance remaining works.

The appellant filed an application under Section 17 for interim measures of protection. The Tribunal vacated the interim order of the Single Judge staying the effect and operation of the Suspension Notice. Aggrieved thereby, the appellant approached the High Court.

It was the petitioner’s case that while dealing with the appellant’s application under Section 17, there was no occasion for the Tribunal to vacate the stay operating on the suspension notice. Secondly, it was contended that the impugned order did not give any reason as to why the stay operating against the suspension notice was vacated.

The High Court opined that the Arbitral Tribunal’s order couldn’t be termed as unreasoned as it had noted in considerable detail the circumstances which led to and impelled the respondent to issue the suspension notice. The High Court noticed that elaborate arguments were addressed by the parties on the aspect of vacation of the stay of the suspension order and this aspect was also considered in the proceedings of the Arbitral Tribunal. Finding no merit in the appellant’s contention that there was no occasion for the Arbitral Tribunal to rule upon and/or to vacate the interim stay of the suspension notice, the Bench clarified, “The same set of facts which form the basis for denial of the appellant’s request for grant of provisional completion certificate, also constitute the factual substratum for taking suspension action against the appellant.”

Placing reliance upon its judgements in World Window Infrastructure Pvt. Ltd. v. Central Warehousing Corporation 2021: DHC: 3798 and Dinesh Gupta and Ors. v. Anand Gupta and Ors. 2020: DHC: 2786, the High Court reaffirmed that while entertaining the appeal from an order passed by the Arbitral Tribunal under Section 17 of the A&C Act, this Court would not supplant the conclusions drawn by the Arbitral Tribunal, which are based on an intricate factual examination of the matter.

As per the Bench, the view taken by the arbitral tribunal was based on a detailed factual examination. The Tribunal did consider all relevant aspects of the matter, including the adverse financial impact on the Appellant, of the vacation of stay on the suspension. It was found that the same did not outweigh the multiple factors which were set out in the impugned order. “The view taken by the arbitral tribunal cannot be said to be perverse or irrational. Moreover, the same is inherently subject to the final outcome of arbitration and without prejudice to the right of the appellant to claim appropriate final relief/s, including damages”, the Bench added.

Finding no merit in the appeal, the High Court dismissed the same.

Cause Title: Shamlaji Expressway Private Limited vs National Highways Authority of India (Neutral Citation: 2024: DHC: 7730)

Appearance:

Petitioner: Advocates Tejas Karia, Dr. Amit George, Abhishek Gupta, Suyuash Gupta, Prakhar Deep, Nishant Doshi, Anirveda Sharma, Mukesh Kumar, Meenakshi Sood, Arvind Singh and Nitya Nath

Respondent: Advocates Manish Bishnoi, Gunjan Sinha Jain, Muskaan Gopal and Khubaib Shakeel

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