Rakia Imran
On 20th January 2025, a Bench comprising Justice Subramanium Prasad of the Delhi High Court observed that revisiting the same issue contradicts public policy, and courts must ensure that litigants are not subjected to repetitive litigation. This statement was made while adjudicating the petition filed under Section 11 (appointment of arbitrator) of the Arbitration and Conciliation Act, 1996 by Jaiprakash Associates.
The contention arose due to delays in the construction process of the Dulhasti Hydro Electric Project on the Chenab River in Jammu and Kashmir. Initially, the project was said to have allotted another contractor. It was later undertaken by Jaiprakash Associates Limited, which signed a contract with NHPC Ltd in 1997. The project, stated for completion within 33 months, faced significant delays and was completed only in 2007. Jaiprakash Associates Limited (petitioner) sought ₹360.56 crores as additional costs for extended site occupation but NHPC Ltd rejected the claim. When the matter was arbitrated, the tribunal awarded ₹60 crores despite the lack of evidence for the petitioner’s claims, justifying the decision with “good conscience and reasonable estimation.”
The High Court invalidated the award in 2023, citing contradictions in the tribunal’s reasoning. Following this, Jaiprakash Associates, represented by Senior Advocate Lovkesh Sawhney and Advocate Rohit Kumar, sought the constitution of a new arbitral tribunal, arguing that the core dispute remained unresolved. The company relied on the Arbitration and Conciliation Act, which provides for fresh arbitration if an award is set aside.
Arguing against the petition, Advocate Gauhar Mirza (Partner), Hiral Gupta (Principal Associate), Sukanya Singh (Senior Associate), Rohit Rahar (Associate) and Devarshi Mohan (Associate) from Cyril Amarchand Mangaldas who represented NHPC Ltd, stated that the claims had already been adjudicated and the petition was filed in bad faith. It emphasized that reopening the matter would waste resources and that arbitration should not be a tool to revive “dead claims.” The High Court dismissed the request for fresh arbitration, underlining the significance of finality in disputes and referring to the Supreme Court’s judgment in SBI General Insurance Co. Ltd. v. Krish Spinning, 2024.
The Court further said, “Allowing such claims to go forward would be a waste of resources and an improper use of the arbitration process, which is meant to resolve only those disputes that are legally viable”. Stressing the referral court’s obligation to avoid forcing arbitration on non-arbitrable matters, the Court rejected the Section 11 petition for the appointment of an arbitrator.
Case Name: M/S Jaiprakash Associates Limited v. M/S NHPC Limited
Case Number: ARB.P. 1061/2023
Bench: Justice Subramanium Prasad