The Supreme Court on Monday referred a dispute arising out of a government contract to mediation for resolution of the claims and counter-claims between the parties, without expressing any view on the merits of the controversy.

The matter was heard by a CJI-led Bench, which noted that issues relating to termination notices, extension of time, performance bank guarantees, and the effect of earlier consent orders involved disputed questions of fact and contractual interpretation. The Court observed that such disputes particularly those concerning prolongation costs, escalation, loss of profits, and the scope of contractual clauses would ordinarily be examined in arbitral proceedings.

Considering the nature of the dispute and the submissions made, the Bench found it appropriate to first explore an amicable resolution through mediation. The parties agreed to participate in the mediation process, with the Court clarifying that all rights, claims, and defences would remain expressly open if the mediation does not result in settlement.

The Solicitor General of India, Tushar Mehta, appeared for the petitioner authority, while Senior Advocate Mukul Rohatgi represented the private respondent.

The Court made it clear that the reference to mediation would not prejudice the parties in any subsequent arbitration or legal proceedings.