Court Grants Interim Relief to Universal Tele Services, Permitting Tender Submission Amidst Ongoing Arbitration
In a significant development, the Madras High Court has appointed a sole arbitrator to adjudicate the disputes between Universal Tele Services and Bharat Sanchar Nigam Limited (BSNL). The disputes arose from the termination of agreements and subsequent debarment of Universal Tele Services by BSNL. The order was passed by Justice K. Kumaresh Babu on June 4, 2026.
The arbitration application was filed by Universal Tele Services seeking the appointment of a sole arbitrator to resolve the differences with BSNL. The court appointed Hon'ble Mr. Justice Thiru.V.Bharathidasan, a retired High Court Judge, to serve as the sole arbitrator. The arbitrator has been directed to promptly address the interim relief applications under Section 17 of the Arbitration and Conciliation Act, 1996, considering the exigencies of the circumstances.
In response to the applications filed by Universal Tele Services, the court granted interim relief, allowing the company to submit its tender. However, the processing of the tender will be conditional upon the orders of the arbitrator. The court emphasized the urgency of the matter, noting that the last date for tender submission is June 9, 2026, and requested the arbitrator to dispose of the interim relief applications by June 18, 2026.
The disputes between the parties stem from termination orders dated November 27, 2025, April 2, 2026, and April 20, 2026, as well as a debarment order dated April 20, 2026. Universal Tele Services sought interim injunctions to restrain BSNL from enforcing these orders and from invoking a performance bank guarantee amounting to Rs.8,74,000.
The court's order also addressed the need for clarification regarding disputes arising under different agreements covering distinct operational areas. Both parties agreed to allow the same arbitrator to resolve disputes jointly for the North and Central operation areas.
Justice K. Kumaresh Babu clarified that the court has not expressed any opinion on the merits of the case and that the parties are free to raise their contentions and take necessary applications to protect their rights. The arbitrator is entitled to fix the remuneration as per the schedule.
The court's decision underscores the importance of arbitration in resolving commercial disputes and highlights the judiciary's role in facilitating timely and efficient dispute resolution. The appointment of the arbitrator and the granting of interim relief are expected to provide a framework for resolving the disputes amicably.
Bottom line:-
Arbitration - Appointment of Sole Arbitrator to adjudicate disputes between parties arising from termination orders and debarment, with interim relief granted to prevent blacklisting and invocation of performance bank guarantee.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 - Sections 11(6), 17
Universal Tele Services v. Bharat Sanchar Nigam Limited, (Madras) : Law Finder Doc id # 2929677
