NHAI wins arbitration case against Gujarat highway contractor’s Rs 174 crore claim

New Delhi, May 8 (IANS) The National Highways Authority of India (NHAI) has won an arbitration matter related to the six-laning of the Kamrej–Chalthan section of NH-48 in Gujarat, leading to substantial savings of public funds.

Against claims of around Rs. 174.49 crore raised by the contractor, the Arbitral Tribunal awarded only Rs 54 lakh to settle the case, underscoring the importance of digital project monitoring, robust documentation and evidence-based contract management by the NHAI, according to an official statement issued on Friday.

During the arbitration proceedings, the NHAI presented detailed documentary and digital evidence before the arbitral tribunal. This included drone videography, digital project records, and technical documentation demonstrating that sufficient land was available for execution of the six-laning works and that substantial drainage work along the edge of the right of way had already been completed.

The evidence further established that the contractor had not undertaken key and challenging components of the project, including major structures and flyovers, which significantly contributed to the foreclosure of the contract.

The matter pertained to the National Highway project for widening of the 15-km-long Kamrej–Chalthan Section of NH-48 from four lanes to six lanes, which included implementation of long-term remedial measures for four black spots on the Kamrej–Bharuch Section. The project was awarded to the contractor SCIW–Unique Construction (JV) for development in engineering, procurement, and construction (EPC) mode in June 2016 at a bid cost of Rs 241.41 crore. The appointed date for commencement of work was declared on March 21, 2017, with 87.75 per cent land availability.

During execution, the contractor repeatedly cited land-related constraints, demonstrated slow progress and failed to execute the work in accordance with the contract provisions. Only simple work related to road and drainage was carried out, and the development of major structures and flyovers was not taken up for development. Owing to continued deficiencies in performance, the contract was mutually foreclosed on May 11, 2020, at a physical progress of around 49.79 per cent.

At the time of foreclosure, both parties had agreed that all claims were fully and finally settled, and the contractor had expressly undertaken not to raise any future claims. However, in 2022, the contractor initiated arbitration proceedings claiming around Rs. 174.49 crore against the NHAI, which was contrary to the terms of the foreclosure agreement.

Based on the submissions and evidence presented, the Arbitral Tribunal, in its award dated March 10, virtually rejected all claims made by the contractor. Against claims amounting to approximately Rs 174.49 crore, the Tribunal awarded only Rs 54 lakh in favour of the claimant.

The case highlights the critical role of digitisation and technology-driven project monitoring in infrastructure development and dispute resolution. The outcome also underlines the NHAI’s steadfast commitment to fix contractor accountability, prudent contract management and protection of public funds in the implementation of National Highway infrastructure projects across the country, the statement added.

–IANS

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