NHAI has secured a major legal victory after an arbitral tribunal awarded it Rs 1,202 crore in a contract dispute (Fille photo).
In a major arbitration case, the National Highways Authority of India (NHAI) last week secured a Rs 1,202-crore arbitral award in its favour in a dispute with IRB Chitradurga Tollway Pvt Ltd over the six-laning of the Tumkur-Chitradurga section of NH-4 in Karnataka.
The project was executed on a build-operate-transfer (BOT) basis under an agreement signed in August 2010 for a 26-year concession period, including 912 days of construction. It was completed in July 2014, and the IRB was required to pay an annual premium of Rs 140 crore, with a 5% annual escalation.
However, the conflict with IRB started when NHAI withdrew the premium deferment benefit in August 2019. The government had introduced a Premium Deferment scheme for “stressed projects” to defer premium payments due to the revenue shortfalls as a result of global economic slowdowns.
Following this, the dispute reached the arbitral tribunal. IRB sought restoration of the premium deferment, claiming an amount of Rs 95 crore, and a 138-day extension of the concession period, citing force majeure events such as Covid-19 pandemic, the 2016 demonetization policy, and a transporter’s strike in 2018.
NHAI filed counterclaims of Rs 679 crore in premium dues up to November 2022 and Rs 96 crore towards unpaid revenue share for the Tumkur Bypass.
On June 25, the tribunal ruled in favour of NHAI, awarding Rs 1,202 crore towards outstanding premium dues to be paid by IRB up to June 2026.
In another case, the Delhi High Court granted partial relief to NHAI in a dispute relating to the construction of the 30-km long Bijni-West Bengal Border four-laning project in Assam. The court reduced the NHAI’s liability from around Rs 162 crore, as awarded by the arbitral tribunal, to Rs 35.91 crore.
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Among government departments, NHAI handles the highest number and very high value cases. Currently, the authority is a party in 140 arbitration cases, where the contractors have made claims of around Rs 1.2 lakh crore and NHAI has filed counterclaims of Rs 65,000 crore.
A senior official of NHAI said the authority has leveraged artificial intelligence (AI) to analyse more than 150 arbitral awards.
“Our in-house AI system helps in identification of successful legal strategies that we use in the pleadings in ongoing disputes. The authority is doing regular monitoring and review of high-value arbitration cases by chairman and senior officers,” said the official.