Court permitted recourse to arbitration and barred coercive action for 45 days to enable a Section 9 application.

The petitioners challenged SECL’s order dated 25 March 2025 insofar as it sought recovery of an additional financial impact of ₹19.13 crore, and challenged the invocation of a bank guarantee on the same date.

They also sought repayment of the amount realized under the guarantee, release of security, and payment of outstanding dues.

An interim order had been granted on 6 May 2025.

During the hearing, petitioners’ counsel accepted that the dispute could be pursued through arbitration under Clause 13 of the General Conditions of Contract (GCC), while seeking continuation of interim protection until an application under Section 9 of the Arbitration and Conciliation Act, 1996 was filed.

Whether the petitioners should be permitted to pursue the contractual dispute through arbitration rather than obtain adjudication of the claims in the writ petition.

Whether protection should be granted to enable the petitioners to seek interim relief under Section 9 of the Arbitration and Conciliation Act, 1996.

Clause 13 of the GCC provides for redressal through arbitration, under the Arbitration and Conciliation Act, 1996 as amended in 2015, in disputes involving parties other than Government agencies.

Section 9 of the Act provides a route to seek interim measures from the designated court; the court did not determine the merits of any such application and directed that it be considered independently.

The petitioners accepted the contractual arbitration mechanism, and the respondents did not object to their pursuing that remedy.

In light of that position, the Court disposed of the writ petition without deciding the legality of the recovery or bank-guarantee invocation.

It allowed time for the petitioners to approach the designated court under Section 9 and limited its protection to a direction against coercive action for 45 days.

Any Section 9 application was to be decided on its own merits, without influence from the High Court’s observations or directions.

The Court directed that no coercive action be taken against the petitioners for 45 days to enable them to seek that remedy.

It did not adjudicate the underlying claims or grant the requested refund, interest, or payment of dues.