Gujarat High Court Temporarily Halts Arbitration Over Vapi Lakes Lease Agreements

The Gujarat High Court on Monday directed that no further proceedings be conducted in arbitration proceedings between Vapi Municipal Corporation and Shashijit Infra Projects Limited arising from lease agreements relating to Lakhamdev Lake, Dungra Lake, and Chala Lake in Vapi. The direction will remain in force until the next hearing before the Court on June 18.

Justice L.S. Pirzada passed the order while issuing notice in petitions filed by the Municipal Corporation challenging the continuation of the arbitration proceedings.

The court observed,

"As Special Civil Application no. 157 of 2026 is pending before this Court and the Civil Application no. 1 of 2026 in Special Civil Application no. 130 of 2026 moved by the respondent no. 1 is also pending and the next date of hearing is fixed on 18.06.2026, the respondent no. 2 may not proceed with the arbitration proceedings and not pass any order till the next date of hearing."

The petitions relate to arbitration proceedings initiated in connection with lease agreements dated January 30, 2020 concerning Lakhamdev Lake, Dungra Lake, and Chala Lake.

The Municipal Corporation approached the High Court seeking to quash a communication dated May 16, 2026 issued by the arbitrator. It also sought a stay on further arbitration proceedings.

Government Pleader appearing for the Municipal Corporation, submitted that Shashijit Infra Projects Limited had appointed the arbitrator unilaterally without the Corporation's consent.

Virk submitted that the arbitrator had issued a communication fixing June 2, 2026 as the next date of hearing before the Arbitration Centre at the Gujarat High Court campus. According to him, the communication stated that failure to file a written statement would result in closure of the Corporation's right to file its written statement.

The Municipal Corporation submitted that another civil application is already pending before the High Court. The matter is scheduled to be heard on June 18, 2026.

It was further submitted that another application had been filed by Shashijit Infra Projects Limited seeking directions to proceed with the arbitration proceedings.

The Municipal Corporation also contended that the arbitration proceedings were "non-est".

Relying on an earlier decision of the High Court in another connected matter, it was submitted that all existing and new matters would go before the Public Works Tribunal.

The Municipal Corporation urged the Court to grant protection. It submitted that otherwise the arbitration proceedings would continue ex parte. It further submitted that its right to file a written statement would be closed and prejudice would be caused to it.

After considering the submissions and the averments in the petitions, Justice Pirzada held that the petitions required consideration. The Court then issued a notice returnable on June 18, 2026.

The Court also directed that its order be communicated forthwith to the arbitrator.

For Vapi Municipal Corporation: Government Pleader G.H. Virk with Advocates Jagrat Shah, Chinmay M. Gandhi and Nikita C. Gandhi.