Singh & Associates, Founder Manoj K. Singh, successfully represented GBPL in an Arbitration matter against NHAI. The arbitration was relating to the dispute arising out of the Concession Agreement related to New Four Lane Gwalior Bypass of the length 42.033 KM on NH-75 in the State of Madhya Pradesh on Build-Operate- Transfer on Annuity Basis (Project).

In 2006, NHAI floated an NIT for the Project. GBPL was awarded the Project on a Semi Annuity amount of INR 26.53 Crores, and the parties executed a Concession Agreement (CA) on 9.10.2006. The Commencement Date was fixed as 7 April 2007. GBPL’s case is that NHAI failed to adhere to its obligations as set forth in the CA (mainly providing encumbrance free land and ROW), on account of which the construction work could not get completed on the Scheduled Project Completion Date, i.e. 8.10.2009. The complete stretch of land and ROW was handed over to GBPL only on 6.02.2012, whereas as per the CA, NHAI was obligated to provide the same by 6.04.2008.

It was also the case of GBPL that despite GBPL achieved the Provision Completion of the Project on 15.11.2011 and also completed the construction on 30.06.2013 and NHAI started the toll operation of the project Highway with effect from 1.07.2013 (however, NHAI declared the final COD as 30.04.2014), NHAI delayed the payment of Annuity and further coerced GBPL to enter into two Supplementary Agreements dated 18.12.2012 and 01.07.2015, respectively. Even after signing of the Supplementary Agreements, NHAI delayed the payment of Annuity. Additionally, although NHAI started the Toll Operations from 00.00 hours of 1.07.2013, however, the final Commercial Operation Date (COD) was declared by NHAI only on 30.04.2014.

As disputes arose between the parties, GBPL invoked the Arbitration Clause and thereafter, due to the failure of NHAI to appoint its Arbitrator also sought the Hon’ble Delhi High Court’s intervention for the appointment of Arbitrator on behalf of NHAI.

The final award dated 14.08.2018 has now been pronounced by the Hon’ble Arbitral Tribunal. In the Final Award dated 14.08.2018, the Hon’ble Tribunal held that it is NHAI, which has majorly contributed towards the delay in handing over the land and ROW and therefore, has breached the terms of the CA. The Hon’ble Tribunal has also agreed with the contention of GBPL that the execution of the Supplementary Agreements did not bar GBPL from raising its claims in accordance with law. The Hon’ble Tribunal, as a consequence, allowed various Claims of GBPL inclusive of applicable interest totaling around Rs.500 Crores.

This award is one of the first of its kind. This case will also boost the contractors working in the Road Infrastructure projects and who has/is suffering losses on various counts due to the default of the Authority in providing ROW. In India, it is a common fact that the Authority conceptualize the project, without even confirming the land availability and later on face problems in acquiring land for the project, which delays the project. NHAI also in its 19th Report by Committee on Public Undertakings 2017-18 has identified the delays relating to land, as one of the major problems in road sectors. Due to this delay, the project cost also becomes much higher than the projected cost and the same forces the developer(s) to take the extra financial burden to complete the project. However, this Award will definitely boost the infrastructure industry to raise dispute(s) against the failure of the Authority to provide ROW on time.

The team led by Manoj K. Singh, Founding Partner, Nilava Bandyopadhyay, Senior Partner, and Rahul Pandey, Principal Associate advised and represented GBPL in the arbitration. On the other-hand, NHAI was represented by Chiramel & Co.