This appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996, was filed by the National Highways Authority of India (NHAI) to challenge an ex-parte ad-interim status quo order passed by an Arbitral Tribunal. The Delhi High Court examined whether the Tribunal was justified in granting blanket interim protection without providing reasons, considering urgency, or hearing the opposing party. Noting that the Solicitor General of India undertook that no debarment order would be passed prior to the upcoming Tribunal hearing, the High Court set aside the ex-parte order and directed both parties to conclude arguments on the Section 17 application by a fixed timeline.
- Background of Dispute: An Engineering, Procurement, and Construction (EPC) contract was awarded to the Respondent by NHAI on January 19, 2024, for constructing an access-controlled section of the Vadodara-Mumbai Expressway. Following performance disputes and settlement agreements, NHAI terminated the contract on January 17, 2026, and later issued a show cause notice on July 6, 2026, to declare the Respondent a “Non-Performer” and initiate debarment proceedings.
- Tribunal’s Impugned Order: On July 28, 2026, the Respondent filed a Section 17 application before the Arbitral Tribunal seeking to stall the termination effects and restrain debarment. Without waiting for NHAI’s response or hearing them, the Tribunal passed an ex-parte status quo order on July 30, 2026.
- Appellant’s Contentions: The Solicitor General argued that the Tribunal’s order lacked reasoning, failed to establish a prima facie case or urgency, and bypassed core tripartite principles for interim relief. Furthermore, an email from a co-arbitrator revealed they had never consented to the ex-parte order.
- High Court Observations:
- The High Court noted that the impugned order was passed without any reasoning, urgency, or consideration of a prima facie case.
- It observed that seeking expansive, final-stage reliefs (such as challenging a contract termination that occurred back in January 2026) within a Section 17 application raises serious doubts.
- Taking note of the Solicitor General’s fair statement that no debarment/blacklisting order would be passed before August 12, 2026, the Court found the continuation of the ex-parte protection unnecessary.
- Directions Issued:
- The ex-parte ad-interim order dated July 30, 2026, passed by the Arbitral Tribunal was set aside.
- Pleadings concerning the Section 17 application were ordered to be completed by August 11, 2026.
- The Arbitral Tribunal was requested to hear and decide the Section 17 application independently on its merits on August 12, 2026, without granting any adjournments.
