On January 16, 1994, 2 human rights activists, Gopal Siwakoti and Rajesh Gautam filed a public interest petition in the Supreme Court under Article 16 of the Constitution which recognises the right to information as fundamental.

Siwakoti and Gautam went to court with the complaint that they were denied access to information and documents related to Arun III, even as the government was set to sign the agreement with the contractors of the project before the expiry of the deadline on January 27. They appealed that all papers on the project be made available to the people of Nepal, and that the government be prevented from entering into any agreement on the project that was likely to force financial liabilities updn the citizens.

In its judgement on March 8, 1994, the Court ruled that the ministry of water resources, the ministry of power and the Nepal Electricity Authority should immediately provide a list of all the documents relating to the Arun III project, and that all the documents required by the defendants be made available to them. The Court also ruled that the government was responsible for providing convincing reasons and ex0lanations to the Court in cases where it felt incapable of releasing any documents for public scrutiny.