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Delhi HC upholds tribunal decision in NHAI-HCC dispute over a road contract

LiveMint logoLiveMint 11-09-2017 Shreya Agarwal

New Delhi: The Delhi high court on Monday upheld an Arbitral Tribunal decision ordering the National Highways Authority of India (NHAI) to pay approximately Rs114.49 crore to Hindustan Construction Company Limited (HCC) in a dispute over a contract for buidling road connectivity to Paradip Port in Odisha.

Importantly, the high court also noted in its judgment that the very purpose of the alternative dispute redressal mechanism provided for in the Arbitration and Reconciliation Act is to ensure that disputes arising out of business agreements are dealt with in a speedy manner and appeals should not be mechanically made to all decisions of Arbitral Tribunals, making the high court a ‘Court of Appeal’.

In 2004, bids were invited by NHAI for development of road connectivity to the Paradip Port in Orissa and HCC was awarded the contract for a sum of approximately Rs327.76 crore. According to the contract, the development work undertaken by HCC was to be completed within 36 months.

This start date in the contract was 19 February, 2004, making the date of completion 18 February, 2007. However, the timeperiod of the contract was extended to 15 June, 2009, which HCC claimed was due to events it could not be held responsible for.

Possession of land needed for completion of the word, in an intersection at Chandhikhol could not be handed over to HCC by the decided date, and barring the work related to this intersection, the remaining work was admittedly completed by 15 June, 2009 by HCC, and a Substantial Completion Certificate was also issued by the engineer in this regard.

It is for the losses incurred for extension of time period related to this part of the assignment that HCC moved the arbitral tribunal.

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