HC Upholds Rs 2.96 Bn Arbitral Award in Favour of JITF

A bench comprising Chief Justice Sheel Nagu and Justice Sanjiv Berry ruled that government bodies cannot seek special treatment under the Arbitration and Conciliation Act, 1996, and are required to comply with the same legal standards as private parties while seeking a stay on arbitral awards.

JITF had entered into a contract in 2011 with the two municipal corporations for a solid waste management project covering the Jalandhar and Ferozepur clusters. Following disputes between the parties, the matter was referred to arbitration.

In January 2022, the arbitral tribunal directed the Jalandhar Municipal Corporation to pay Rs 2044.4 million and the Moga Municipal Corporation to pay Rs 922.9 million, along with applicable interest. While both civic bodies challenged the award and sought a stay, the High Court had earlier ruled that the stay would remain valid only if the entire award amount was deposited.

As neither corporation deposited the amount despite multiple opportunities, their objections were dismissed in January 2024. The subsequent appeals have now also been rejected, with the court observing that arbitration is intended to provide a speedy and fair resolution, and government entities cannot evade statutory obligations after entering commercial contracts.