The Apex Court made an observation that while exercising its jurisdiction under Article 226, the High Court is bound to not entertain a dispute which can be settled through the mode of Arbitration. Only the matters which involve a fundamental issue of public interest should be entertained under Article 226.
The bench made this observation in the case of Rapid MetroRail Gurgaon Limited v Haryana Mass Rapid Transport Corporation, where the appellant had filed for an appeal against the order of Punjab and Haryana HC.
In the instant case, the respondent had filed writ petitions in order to challenge the termination notices which had been issued by the appellant. Even though there was an arbitration clause, the HC entertained the writ petition filed by the respondent.
The bench justified that the HC might have been concerned with the fundamental issue of public interest, which was the hardship that had been caused to the commuters who used to prefer rapid metro for the purpose of mass transport to Gurgaon.
The bench also noted that in case of non-interference by HC, the consequences could’ve been disastrous. The bench also stated that there are remedies under the Arbitration and Conciliation Act, 1996- either interim directions can be sought from a court having jurisdiction (Section 9) or from the Arbitral Tribunal itself (Section 17).
The apex court, however, passed directions and disposed of the writ petitions filed by the respondents.
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