Reliance Infrastructure bags Rs 16.14 crore arbitration award against NHAI

Mumbai: Reliance Infrastructure has bagged a Rs 16.14 crore arbitration award against National Highway Authority of India, a small win for the company which has Rs 8,000 crore of claims with different government agencies.
With this win, Reliance Infrastructure has won a total of six arbitration awards amounting to around Rs 6,300 crore in cases of Delhi Metro Rail Corporation (DMRC), Goa Power Plant and NHAI Roads. The company now has over Rs 8,000 crore of claims under advanced stages of arbitration for engineering, procurement and construction (EPC) projects, Mumbai Metro and road jobs, a company statement said.

Reliance Infrastructure said Tuesday that a three-member arbitration tribunal ordered NHAI to pay Rs 16.14 crore by February 10, 2019 to the company. NHAI will have to pay interest of 12% per annum on the amount if it does not pay by the deadline. This order is in addition to a Rs 200 crore arbitration award the company bagged earlier in August for the same NHAI project for cost over-run and loss of revenue.

“The need for current arbitration arose due to cost over-run in consultant fees during construction, delayed payment of grant and additional expenses due to change in law on TD Toll Road Private, a wholly owned subsidiary of Reliance Infrastructure, which NHAI did not reimburse as per the terms of the concession agreement,” the company said in the statement.

TD Toll Road has designed, built and is operating an 87-km-long 4-lane national highway, NH45, connecting Trichy and Dindigul in Tamil Nadu. The project construction work was completed and commercial operation started in January 2012.

Many construction firms have funded large cost and time overruns on their own balance sheets in the absence of timely compensation from client. With a multi-year dispute resolution process, these companies are dependent on relief from the courts after PSUs and other government authorities challenge binding arbitration awards all the way to the Supreme Court. Industry says that these clients mechanically appeal all the way up to the apex court, thereby making a mockery of the dispute resolution process.