High Court under Article 226 cannot entertain an Arbitrable dispute unless the issue is related to the public interest

In a recent case, the Supreme Court observed that a High Court in its jurisdiction under Article 226 of the Constitution should not entertain a dispute that is arbitrable unless it involves an issue of public interest.

The Bench made this observation while considering Rapid Metrorail Gurgaon Limited’s appeals against Punjab and Haryana High Court order in a writ filed by Haryana Mass Rapid Transport Corporation.

In the instant case, there was an arbitration clause, but the High Court entertained the writ. The Supreme Court noted that the High Court entertained the writ as there was a fundamental issue of public interest( hardships faced by commuters)

The Bench observed that High Court’s interference was justified as the metro line would have been disrupted without it. The Bench clarified that High Courts in the jurisdiction under Article 226 should not entertain an arbitrable dispute. The Bench noted that there were other remedies available under Arbitration and Conciliation Act.

Hon’ble Court disposed of the Appeal and issued the following directions:-

  • HSVP should deposit 80% of the due amount within three months from the date of order.
  • Deposit should be maintained in the Escrow Account subject to NCLAT’s order or any other competent authority.
  • RMGSL and RMGL can pursue remedies mentioned in the Concession Agreement.
  • Once compliance is complete, RMGSL and RMGL should hand over all relevant documents to HSVP.

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