The Supreme Court has said that the courts usually should not interfere with the arbitral proceedings, especially till the time an award is not passed.
The top court has disapproved the practice of filing applications in disposed of Special Leave Petitions (SLPs) for side stepping the arbitration process, and added that the said applications must not be entertained by the court.
The bench comprising of Justice Krishna Murari and Justice Sanjay Karol was dealing with an application filed in an SLP disposed of by the court by referring the parties to arbitration under an MoU executed between them.
The respondent in the SLP is the State of Uttar Pradesh, which has sought vacation of the status quo granted by the Arbitral Tribunal in the arbitration proceedings between the parties.
The counsel has also sought to vacate the rights of the petitioner with respect to the disputed project.
The court reckoned that despite being issued a notice, the applicant did not appear before the Arbitral Tribunal and thus, the arbitration proceedings commenced without its presence.
During the arbitration proceedings, the Tribunal also passed an order for maintaining status quo with respect to the disputed project till the disposal of the matter.
The court observed that even after the counsel was available for the applicant in the arbitral proceedings, it raised no objection to the same,
The bench took note that now, after a lapse of several years, the applicant sought vacation of the status quo granted by the Tribunal.
The Court while observing that the reliefs sought by the applicant were already pending adjudication before the Arbitral Tribunal, in which no arbitral award had been passed regarding the same,saoid that 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 added that it opines the 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.
The court thus dismissed the application.