{"id":56241,"date":"2016-07-15T18:30:57","date_gmt":"2016-07-15T13:00:57","guid":{"rendered":"http:\/\/www.scconline.com\/blog\/?p=56241"},"modified":"2016-09-13T12:27:03","modified_gmt":"2016-09-13T06:57:03","slug":"disputes-between-government-owned-corporations-should-not-go-through-long-expensive-trails-but-be-quickly-resolved-by-way-of-arbitration","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2016\/07\/15\/disputes-between-government-owned-corporations-should-not-go-through-long-expensive-trails-but-be-quickly-resolved-by-way-of-arbitration\/","title":{"rendered":"Disputes between Government Owned Corporations should not go through long expensive trials but be quickly resolved by way of Arbitration"},"content":{"rendered":"

Supreme Court<\/strong>: Considering the sad state of affairs of long drawn expensive and cumbersome trials to resolve disputes between two Government owned corporations and the fact that one of the parties in the case at hand had with considerable tenacity opposed the move aimed at a quick and effective resolution of the conflict and resultant quietus to the controversy by a reference of the disputes to arbitration in terms of the Arbitration and Conciliation Act, 1996, the bench of T.S. Thakur, CJ and R. Banumathi, J. referred the matter for adjudication to Justice K.G. Balakrishnan, Former Chief Justice of Supreme\u00a0Court, who is hereby appointed as Sole Arbitrator to adjudicate upon all claims and counter claims which the parties may choose to file before him.<\/p>\n

In the present case, the parties had entered into a contract for construction of a Coal Handling Plant and a Clause in the Contract provided for adjudication of disputes between the parties by way of arbitration. Disputes between the parties were referred for resolution in terms of the \u201cpermanent in-house administrative machinery\u201d set up by the Government. Both the parties, upon being dissatisfied with the awards, challenged the award in appeals filed before the Law Secretary, Department of Legal Affairs, Ministry of Law and Justice in terms of the in-house mechanism provided by the Government. The appellant then filed a civil suit before the High Court of Delhi alleging that the Arbitral award passed by the appellate authority was according to the appellant illegal and vitiated by errors apparent on the face of the record, hence, liable to be set aside.<\/p>\n

Discussing the question of remanding the case to the Civil Court, the Court noticed that an arbitral award under the Permanent Machinery of Arbitration may give quietus to the controversy if the same is accepted by the parties to the dispute. In cases, however, a party does not accept the award, as is the position in the case at hand, the arbitral award may not put an end to the controversy. Such an award being outside the framework of the law governing arbitration will not be legally enforceable in a court of law. Just because a Government owned company has resorted to the permanent procedure or taken part in the proceedings there can be no estoppel against its seeking redress in accordance with law. Making reference to a sole arbitrator for adjudication of all outstanding disputes between the two corporations, the Court held that the alternative to such arbitration is a long drawn expensive and cumbersome trial of the suit filed by the appellant before a civil court and the difficulties that beset the execution of an award made under a non-statutory administrative mechanism and that both these courses are unattractive with no prospects of an early fruition. [NORTHERN COALFIELD LTD v. HEAVY ENGINEERING CORP. LTD, 2016 SCC OnLine SC 697<\/a>, decided on 13.07.2016]<\/p>\n","protected":false},"excerpt":{"rendered":"

Supreme Court: Considering the sad state of affairs of long drawn expensive and cumbersome trials to resolve disputes between two Government owned <\/p>\n","protected":false},"author":3,"featured_media":154914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[3226,8131,3174,8121],"class_list":["post-56241","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-arbitration","tag-civil-suit","tag-contract","tag-government-owned-company"],"yoast_head":"\nDisputes between Government Owned Corporations should not go through long expensive trials but be quickly resolved by way of Arbitration | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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Supreme Court answers","author":"Apoorva","date":"June 6, 2023","format":false,"excerpt":"Supreme Court refused to give effect to the appointment of an officer of the Ministry of Law and Justice as an arbitrator.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"contract entered in name of president","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/contract-entered-in-name-of-president.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/contract-entered-in-name-of-president.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/contract-entered-in-name-of-president.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/06\/contract-entered-in-name-of-president.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":354770,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/07\/28\/supreme-court-parties-clear-intention-refer-disputes-to-arbitration-legal-news\/","url_meta":{"origin":56241,"position":2},"title":"\u2018Use of \u2018may\u2019 in alleged arbitration clause doesn’t indicate clear intention to refer dispute to arbitration\u2019; SC upholds Calcutta HC\u2019s verdict","author":"Sucheta","date":"July 28, 2025","format":false,"excerpt":"\u201cSimilarly, a clause which states that \"if the parties so decide, the disputes shall be referred to arbitration\" or \"any disputes between parties, if they so agree, shall be referred to arbitration\" would not constitute an arbitration agreement\u201d.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"clear intention to refer dispute to arbitration","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/clear-intention-to-refer-dispute-to-arbitration.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/clear-intention-to-refer-dispute-to-arbitration.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/clear-intention-to-refer-dispute-to-arbitration.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/07\/clear-intention-to-refer-dispute-to-arbitration.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":96101,"url":"https:\/\/www.scconline.com\/blog\/post\/2016\/12\/31\/high-level-committee-constituted-to-review-institutionalization-of-arbitration-mechanism-in-india\/","url_meta":{"origin":56241,"position":3},"title":"High Level Committee constituted to review Institutionalization of Arbitration Mechanism in India","author":"Saba","date":"December 31, 2016","format":false,"excerpt":"Justice Dispensing System in India has come under great stress for various reasons including huge pendency of cases in various courts. The injustice is particularly egregious in commercial disputes, where cases remain pending for years. Accordingly, arbitration provides an effective and efficient alternative window for dispute resolution. The Government of\u2026","rel":"","context":"In "Hot Off The Press"","block_context":{"text":"Hot Off The Press","link":"https:\/\/www.scconline.com\/blog\/post\/category\/news\/hot_off_the_press\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/12\/DSC_4762-e1474523869607.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/12\/DSC_4762-e1474523869607.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/12\/DSC_4762-e1474523869607.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/12\/DSC_4762-e1474523869607.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/12\/DSC_4762-e1474523869607.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":318200,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/23\/reference-to-document-in-contract-show-intention-incorporate-arbitration-clause-supreme-court\/","url_meta":{"origin":56241,"position":4},"title":"Reference to a document in contract should show intention to incorporate arbitration clause: Supreme Court reiterates","author":"Ridhi","date":"March 23, 2024","format":false,"excerpt":"Supreme Court concluded that the instant matter was not one of \u2018incorporation\u2019 but a case of \u2018reference\u2019 and clarified that a general reference would not have the effect of incorporating arbitration clause.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"arbitration clause in contract","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/arbitration-clause-in-contract.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":376032,"url":"https:\/\/www.scconline.com\/blog\/post\/2026\/02\/18\/arbivis-arbitration-state-owned-entities-msme-panel-discussion\/","url_meta":{"origin":56241,"position":5},"title":"ARBIVIS Partners LLP Law Offices to host a Panel Discussion on The State of Arbitration: Navigating an Arbitration involving State-Owned Entities and MSMEs","author":"Editor","date":"February 18, 2026","format":false,"excerpt":"ARBIVIS Partners LLP hosts a panel discussion on arbitration involving State-Owned Entities and MSMEs at the Global ADR Summit 2026.","rel":"","context":"In "Law Firms News"","block_context":{"text":"Law Firms News","link":"https:\/\/www.scconline.com\/blog\/post\/category\/news\/law-firms-news\/"},"img":{"alt_text":"Arbitration State Owned Entities MSMEs Panel","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/blog-33-15.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/blog-33-15.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/blog-33-15.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/blog-33-15.webp?resize=700%2C400&ssl=1 2x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/56241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=56241"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/56241\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/154914"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=56241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=56241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=56241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}