IIT Mandi cannot be dragged into Contractor–CPWD arbitration: HP High Court
Photo used for indicative purpose only. Source: Internet
Shimla, Dec 30,
The Himachal Pradesh High Court has refused to interfere with an arbitral tribunal’s decision declining to implead IIT Mandi as a party in an ongoing arbitration dispute between Central Public Works Department (CPWD) and M/s Supreme Infrastructure India Limited. Justice Ajay Mohan Goel dismissed IIT Mandi’s challenge to the arbitrator’s April 18, 2025 order, noting that the institution was neither a signatory nor directly involved in the construction contract underlying the dispute.
The petition arose from a Memorandum of Understanding under which CPWD undertook construction of the institute’s Kamand campus. When the contractor initiated arbitration solely against CPWD—claiming nearly ₹689 crore— IIT Mandi sought to join the proceedings, citing potential financial liability falling upon it. The arbitrator had rejected this plea, observing that the institute’s concern that an award “shall cause serious prejudice” was “not good enough” to justify impleadment in arbitration.
Upholding this view, the High Court emphasized the existence of two distinct contracts—one between IIT Mandi and CPWD, and another between CPWD and the contractor. “The contractor/private respondent herein is not a signatory” to the MOU with IIT Mandi, the Court said, adding that the petitioner was “neither a party nor a signatory” to the construction agreement forming the basis of arbitration.
While acknowledging that IIT Mandi “has a substantial interest in the dispute,” the Court found no legal basis to compel its participation as a respondent. The order notes that the institute’s possible financial exposure “is not a ground to implead it in a contractual dispute between the contracting parties.”
The Court further endorsed the arbitrator’s view that CPWD was fully capable of protecting both its own and IIT Mandi’s interest, remarking that “there is nothing on record to suggest that it will not protect… the best of its ability in the arbitral proceedings.”
With these findings, the Court dismissed the writ petition and allowed the arbitration between CPWD and the contractor to proceed without IIT Mandi’s participation.
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