Hyderabad: Telangana high court has held that parties which agreed to an arbitration clause in a contract cannot later directly approach the HC to challenge the same process. It ruled that when the law provides a specific alternative remedy for dispute resolution, the court will not interfere in the matter, except in extremely rare and exceptional circumstances.A bench comprising Justices Moushumi Bhattacharya and Gadi Praveen Kumar recently delivered the verdict while dismissing two writ petitions filed by the Hyderabad Metropolitan Development Authority (HMDA) and Hyderabad Growth Corridor Limited (HGCL), challenging notices issued by Indian Council of Arbitration (ICA). The dispute centres on a 2007 concession agreement signed between HMDA and Hyderabad Expressway Limited (HEL) for the Build-Operate-Transfer (BOT) project related to the Outer Ring Road.Under the agreement, both parties had mutually agreed that any disputes arising between them would be resolved through arbitration as per the rules of ICA. However, HMDA later opposed the arbitration proceedings, citing changes in the consortium shareholding, the Corporate Insolvency Resolution Process (CIRP) proceedings, and unauthorised share transfers.In response, the ICA issued notices stating that such objections should be raised directly before the arbitration tribunal, prompting HMDA to approach the high court. Rejecting the petitioners’ contention, the bench observed that parties signing an arbitration agreement cannot subsequently claim that the process is being forced upon them.The bench emphasised that issues involving share transfers, consortium alterations, or alleged fraud fall within the purview of the tribunal, as the phrase “any dispute” in the contract covers these objections. The court further noted that, under the Arbitration and Conciliation Act, the tribunal has the authority to rule on its own jurisdiction.Describing the ICA as an arbitral institution rather than a state entity under Article 12 of the Constitution, the bench stated that the notices were purely procedural steps to initiate proceedings. Finding no gross illegality or patent lack of jurisdiction, the HC directed the petitioners to raise their objections directly before the tribunal and disposed of the petitions.
