NEW DELHI: The Delhi High Court has asked the National Highways Authority of India (NHAI) to avoid challenging arbitral awards against it “mechanically and casually” as it derails infrastructure projects and raises the amount to be paid to contractors.
While hearing two petitions, filed by the NHAI and by contractor Gammon India Ltd, both challenging parts of an arbitral award passed against them, Justice Pratibha M Singh said there was an urgent need for NHAI to take a policy decision on how it should resolve its disputes with contractors.
“There is a need for the NHAI not to challenge arbitral awards mechanically and casually, especially where objections to the award are not strong or substantial,” Justice Singh said.
By casually challenging arbitral awards against it, the NHAI deprives the contractor of timely payments and incurs additional payment on account of interest, the court said.
Gammon had entered into a contract with NHAI for widening a nearly 140-km stretch NH-5 in Odisha and strengthening bridges and flyovers on it between Chandikhole and Baleshwar.
The total value of the contract was Rs 144.56 crore. The agreement was signed in August 2001 and the project was to be completed in 33 months.Some of the claims made by the contractor were rejected by the engineer-in-charge, after which the matter was taken to the Arbitral Tribunal.
Of the six claims, two were awarded in the favour of NHAI and four were decided in favour of the contractor, prompting both to move the high court. The court dismissed both petitions.
The court said that the entire mechanism of Dispute Resolution Board (DRB) and Arbitral Tribunal would be set at naught if the DRB’s every recommendation and every award of the Tribunal was challenged.