In Brief
NTPC contracted with SPML for installation services. After project completion, NTPC withheld performance guarantees, linking their release to disputes under other contracts. SPML obtained a court order and reached a settlement agreement releasing the guarantees. SPML then repudiated the settlement and sought arbitration, alleging economic duress. The Supreme Court held that the claims were raised as an afterthought and lacked bona fides. Applying the limited pre-referral scrutiny under the Arbitration Act, the Court found the claims manifestly frivolous and untenable, and set aside the High Court's order referring the matter to arbitration.
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