Shyam Divan Explodes Over “Mischief” in Supreme Court | Kapil Sibal Responds| Status quo ordered

Case Title- HARIDWAR HIGHWAYS PROJECT LIMITED Versus ERA INFRA ENGINEERING LIMITED AND ANR- SLP(C) No. 18198/2026 In today’s Supreme Court hearing, the Bench heard a significant challenge arising out of an ongoing arbitration dispute linked to an NHAI highway project, where the petitioner sought notice and interim protection against a High Court order passed in March 2026. Senior counsel appearing for the petitioner argued that the impugned order was difficult to understand and had allowed a third party, ERA Infra Engineering Limited, to intervene in an arbitration that had already progressed substantially with more than twenty hearings and where evidence was nearing completion. It was submitted that the petitioner is the claimant in arbitration against the National Highways Authority of India, and that a complete outsider to the arbitration could not be permitted to “parachute” into the proceedings midway and seek impleadment as a claimant. The hearing also centered on insolvency proceedings, with the petitioner pointing out that the company had entered CIRP on 4 November 2025 and was under a statutory moratorium. It was argued before the Court that despite being fully aware of the insolvency proceedings and the moratorium under the Insolvency and Bankruptcy Code, the third party failed to disclose these facts before the High Court and proceeded to obtain orders in the petitioner’s absence. Counsel strongly objected to the fact that several hearings took place without the claimant being represented and described the development as a serious procedural irregularity. According to the petitioner, the third party was attempting to claim rights over money recoverable from NHAI on a preferential basis despite not being a party to the arbitration agreement. The opposing side responded by explaining that the dispute arose from a consortium arrangement for a highway project, where a special purpose vehicle had been created as part of the tender conditions. It was argued that the SPV was directly connected to the project and therefore had a necessary interest in the arbitration. The Bench questioned both sides closely on the relationship between the principal contractor, the SPV, and NHAI, and examined whether the third party could legally seek participation in the arbitration. NHAI also clarified before the Court that its arbitration agreement existed only with the petitioner and not with the third party seeking intervention. After hearing detailed submissions, the Supreme Court directed that status quo be maintained in the arbitration proceedings and requested the arbitral tribunal not to proceed further until the matter is taken up by the Court. The Bench also made it clear that there should be no settlement or further movement behind the back of any party while the issue remains pending. The matter is now expected to be heard again in July, with the Court set to examine the larger questions involving arbitration, insolvency moratorium, consortium structures, and whether a third party can intervene in an advanced-stage arbitral proceeding.