Kerala HC Asks District Collectors To Stay All Pending Arbitration Proceedings Under National Highways Act Unless Pursued By Litigants

“In the interest of justice, we are of the view that the proceedings now pending before the District Collector have to be kept on hold till a further decision is taken in this matter. Therefore, we direct that all the District Collectors of the State who have been appointed as an Arbitrator invoking the National Highway Act shall not dispose of the pending reference until further orders are passed by this Court.”

The Bench of Justice A. Muhamed Mustaque and Justice P. Krishna Kumar ordered thus after noting that many of the cases were disposed without giving parties an opportunity to adduce evidence. The Court also took into account that a large number of cases are pending before the District Collector. The Court observed that the Collector who is discharging other duties may not be in a position to attend each of the pending cases.

The Court however clarified that the litigants have the option to proceed with the arbitration by the District Collector and conclude the proceedings.

The Court observed that if the proceedings are not stayed it will cause grave injustice to the landowners as they won't be able to raise their genuine grievances regarding evaluation and compensation. The Court also pointed to the limited scope of challenging these awards under Section 34 of the Arbitration and Conciliation Act, 1996. The Court also said that there is a serious challenge regard appointing District Collector as arbitrator in the light of Paragraph 169, Clause (e) of Central Organisation for Railway Electrification v ECI SPIC SMO MSML (JV) A Joint Venture Company (2024)

Before concluding, the Court directed the Central Government to consider the possibility of referring the arbitration to Kerala High Court Arbitration Centre. The Court informed that there is a provision for reserved arbitration where one of the parties is the State/ Central Government. The Court added that in reserved arbitration, there is a complete waiver of arbitration fee and only a nominal administration fee has to be paid.

Case Title: Chandramohanan K. C. and Others v Union of India and Others

Case No: WA 1704 of 2023