Kochi: The Kerala High Court ordered that all arbitration proceedings invoking the National Highway Act, 1956, pending before the District Collectors be kept on hold until further orders.

“In the interest of justice, we believe that the proceedings now pending before the District Collector have to be kept on hold until a further decision is taken. Therefore, we direct that all the District Collectors of the state appointed as an Arbitrator invoking the National Highway Act shall not dispose of the pending reference until this Court passes further orders.”

The Bench of Justice A Muhamed Mustaque and Justice P Krishna Kumar ordered this after noting that many of the cases were disposed of without allowing parties 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 be unable to attend to each pending case.

The court, however, clarified that the litigants can 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 referring the arbitration to the Kerala High Court Arbitration Centre. The court informed us 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, the arbitration fee is completely waived, and only a nominal administration fee has to be paid.
(With LiveLaw inputs)