The National Highways Authority of India (NHAI) has secured a major legal victory after an arbitral tribunal awarded it ₹1,202 crore in a long-running dispute related to the Tumkur–Chitradurga six-laning highway project in Karnataka. The award is one of the largest arbitration wins for the highway authority and strengthens its position in enforcing contractual obligations under public-private partnership (PPP) infrastructure projects.
The dispute involved IRB Infrastructure Developers, the concessionaire responsible for developing the highway under the Build-Operate-Transfer (BOT) model. The project was awarded during 2010-11, with the concession agreement scheduled to remain in force until June 2037.
Under the terms of the agreement, the concessionaire was required to pay an annual premium of ₹140 crore to NHAI, with the amount increasing by 5 per cent every year. However, according to NHAI, the developer repeatedly defaulted on premium payments, prompting the authority to withdraw the premium deferment facility in August 2019, as permitted under the concession agreement.
Following arbitration proceedings, the tribunal ruled in favour of NHAI, awarding the authority ₹1,202 crore. The decision is expected to reinforce contractual discipline in India’s highway sector, particularly for BOT projects where timely premium payments and adherence to concession agreements are essential for project sustainability.
Apart from the Karnataka case, NHAI has also received relief in another arbitration matter related to a highway project in Assam, further strengthening its legal position in ongoing infrastructure disputes.
The arbitration victory is significant for NHAI as it demonstrates the authority’s commitment to protecting public assets and ensuring compliance with concession agreements. It also sends a strong message that contractual obligations in infrastructure projects will be strictly enforced.
