Delhi HC rules in favour of Reliance Infra in arbitral dispute with NHAI

Delhi HC

The Delhi High Court has ruled in favour of Reliance Infrastructure-owned TK Toll Road Private Limited (TKTR) in an arbitral dispute with the National Highway Authority of India Limited (NHAI), according to a filing with the BSE on August 11.

The court directed the NHAI to deposit  Rs 1,204 crore, which is the amount of arbitral award, along with the interest and permitted TKTR to withdraw the same on furnishing a bank guarantee, Reliance Infra said in the filing. The dispute between the NHAI And TKTR goes back to 2018.

In 2006, the NHAI invited bids to design, engineer, finance, construct, operate and maintain the Trichy - Karur highway on a Build, Operate and Transfer basis (BOT). Reliance Infra emerged as the winner of the bidding process in 2007 and it was scheduled to be completed in 2010. A supplementary agreement was executed between the parties in 2013, whereby both the sides gave up claims against each other for delay in completion of the project. The completion deadline was then shifted to February 2012.

However, disputes erupted yet again and eventually an arbitration started in 2018. In October 2022, the arbitrators ruled in favour of Reliance Infra, asking the NHAI to cough up over Rs 1,000 crore.

The NHAI challenged the arbitral award at the Delhi High Court, alleging that it was passed without any evidence and is based on conjectures and assumptions, shocking to known jurisprudence and is in gross contravention with fundamental public policy. It alleged that the arbitrators did not consider the fact that the claims were beyond the period of limitation and was time-barred.

Dismissing the plea, the high court held that the grounds for interference
in an arbitral award being extremely narrow, it cannot interfere in an award unless there is an error  apparent on the face of it. The court thus found no ground to interfere in the award and ruled in favour of Reliance Infra.