Delhi HC: Arbitration Ordered in Oriental Foundry vs. Union of India Contract Dispute

Summary: Oriental Foundry Private Limited and the Union of India are in a legal disagreement over arbitration. The Delhi High Court has stepped in to appoint someone to help settle their arguments.

The Dispute Begins

The case is about a disagreement over a contract between Oriental Foundry Private Limited and the Union of India. It all started with a contract dated August 1, 2024, which included a rule about arbitration. When arguments started, Oriental Foundry wanted to appoint someone to help resolve the issue.

Arbitration Clause Details

The contract included a specific rule about arbitration mentioned in a letter from the Railway Board dated December 12, 2018. It stated that if there were disagreements, they would be resolved through arbitration. Depending on how much money was involved, either one or three retired Railway Officers would act as arbitrators.

“The contract will be governed by the arbitration clause with changes as specified in the Railway Board’s letter.”

Court's Role and Decision

On February 24, 2026, Justice Harish Vaidyanathan Shankar of the Delhi High Court decided that the issue should go to arbitration. The court appointed Mr. Shashank Garg, a Senior Advocate, to act as the arbitrator.

“Mr. Shashank Garg, Senior Advocate, is appointed as the Arbitrator to handle the disputes between the parties.”

Interim Relief Sought

Before the arbitration, Oriental Foundry asked for temporary help to keep things the same with certain bank guarantees. They wanted to make sure these guarantees weren't cashed in while waiting for arbitration.

Financial Stakes

The disagreement involves a lot of money, about seven crores. The court order also mentioned that Oriental Foundry and the Union of India would split the arbitrator's fees equally.

Summary of the Verdict

The court's decision ensures that the arbitration process will move forward, with all parties' rights and arguments remaining open for the arbitrator to decide. This step is important for resolving the ongoing disagreement between Oriental Foundry and the Union of India.

“All rights and arguments of the parties in relation to the claims/counterclaims are kept open, to be decided by the learned Arbitrator on their merits.”