As per the case facts NTPC Ltd appealed a High Court decision that allowed an application to form an Arbitral Tribunal arguing that a prior settlement agreement meant no disputes ... remained and the application was an abuse of process The reason for the appeal to the Supreme Court was to contest the High Court's decision to refer the matter to arbitration when NTPC believed all disputes were already resolved by a settlement agreement The question arose whether the High Court correctly allowed the application for an Arbitral Tribunal despite a pre-existing settlement agreement between the parties and thus whether the disputes were still arbitrable Finally the Supreme Court set aside the High Court's decision finding an error in allowing the application under Section of the Act The Court stated that the High Court should have applied a preliminary test to dismiss the ex-facie meritless litigation concluding that the arbitration claims were an afterthought and lacked good faith thereby allowing the appeal