NHAI Successfully Defends Major Arbitration Case to Safeguard Public Funds in National Highway Projects
- Against claims of around Rs. 3,177 crores raised by the concessionaire, the Arbitral Tribunal awarded only Rs. 46 crores plus applicable interest to settle the case
Achieving a significant legal and financial milestone, NHAI has secured a favorable outcome in the arbitration proceedings pertaining to Bareilly Highways Project Limited (BHPL), a concessionaire promoted by M/s Era Infra Engineering Limited for 151 km long Bareilly – Sitapur BOT (Toll) project in Uttar Pradesh which was terminated by NHAI in May 2019. The Arbitral Tribunal substantially upheld the position of NHAI, thereby safeguarding public resources and reaffirming the contractual framework governing National Highway projects.
The three-member Arbitral Tribunal examined claims and counterclaims arising out of the concession agreement for the project. The Concessionaire had raised 30 claims aggregating to around Rs. 3,177 crores. After detailed consideration, the Tribunal allowed only three claims amounting to Rs. 46 crore plus applicable interest, while rejecting majority of the claims.
Arbitration Tribunal upheld the Supplementary Agreement (SA) dated 30th March 2015 and decided that project delays were concurrent and majority of the Concessionaire’s claims were rejected. NHAI also filed counterclaims, including claims relating to financial losses and public inconvenience. While these counterclaims were not allowed by the Tribunal, NHAI successfully defended itself against the overwhelming financial claims raised by the Concessionaire, resulting in a substantial protection of public funds.
In a series of recent notable legal wins, NHAI has successfully defended various arbitration cases. In June 2026, arbitration case related to Tumkur–Chitradurga 6 laning Project in Karnataka, was awarded in favour of NHAI for Rs. 1,202 crores. Also in April 2026, two arbitration cases in Panipat–Jalandhar Highway Project involving Concessionaire’s claims of around Rs. 8,375 Crores and counterclaims of NHAI for Rs. 2,888.64 Crores were settled for Rs. 819.96 Crores in favour of NHAI. Similarly in May 2026, arbitration case related to 6 laning of Kamrej–Chalthan section of NH-48 in Gujarat in which claims of around Rs. 174.49 crore raised by the contractor, was settled for only Rs. 54 lakhs by the Arbitral Tribunal.
The successful outcome of arbitration cases underscores NHAI’s focus on robust contractual management and effective legal strategy. It also reinforces NHAI’s resolve to ensure effective utilisation of public funds while maintaining transparency and contractual discipline in the development and management of National Highway infrastructure.
