Arbitration clause no bar for writ jurisdiction

Ruling in Union of India v Tantia Construction Pvt Ltd the Supreme Court held that “the constitutional powers vested in the high court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities.” As such, the apex court has ruled that the existence of an arbitration clause does not by itself bar the writ jurisdiction of a high court and the Supreme Court under articles 226 and 32 of the constitution respectively.

Tantia Construction, a contractor working on the construction of a railway bridge over the Ganges, had approached Patna High Court for a writ to quash an August 2008 order by a deputy chief engineer of East Central Railways, which is part of the country’s state-owned rail network. The order required Tantia Construction to execute works of a larger quantity than originally agreed upon and was challenged the order on the ground that the entire work could not be thrust on the firm at its own risk and cost.

A writ issued by Patna High Court was upheld by a division bench of the court. This triggered an appeal to the Supreme Court by the government that argued that the terms of the contract allowed it to vary the nature of the work. The government also argued that the courts could not interfere in the dispute as there was an arbitration clause.

The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.