Narsi Creation Pvt. Ltd. and Anr. vs. State of Uttar Pradesh and Ors.
Background
A 2012 Special Leave Petition had already been disposed of by the Supreme Court, referring the underlying dispute to arbitration as per an MoU between the parties, and directing status quo until the Arbitral Tribunal took up the matter. The arbitration proceeded; despite being served notice, the applicant did not appear, and the Tribunal passed a status quo order in 2015 to which the applicant's counsel (who was present) raised no objection. Years later, the applicant filed fresh Miscellaneous Applications in the already-disposed-of SLP, seeking to vacate that status quo order and undo rights of the original SLP petitioner in the disputed project: effectively trying to bypass the ongoing arbitration.
Decision Breakdown
The Supreme Court held that the reliefs sought were issues already pending before the Arbitral Tribunal, and since no arbitral award had yet been passed, courts should not interfere in arbitral proceedings at this stage, consistent with the Arbitration and Conciliation Act, 1996 and settled case law. The Court specifically disapproved of the practice of filing fresh applications in an already-disposed-of SLP as a way to sidestep the arbitration process, saying such practice should be discouraged and not entertained. The applications and pending interlocutory applications were dismissed, with parties directed to raise all issues on merits before the Arbitral Tribunal and to place a copy of the order before it to resume the arbitration, while maintaining the tribunal's 2015 status quo order.
Lesson Learnt
Once a dispute has been referred to arbitration, parties cannot use miscellaneous applications in a closed Supreme Court case as a shortcut to reopen or interfere with the arbitration before an award is passed: such issues must be raised before the Arbitral Tribunal itself.