The NHAI should avoid challenging arbitral awards against it “mechanically and casually” as it derails infrastructural projects and raises the amount to be paid to contractors.
Justice Prathiba M Singh said there is an urgent need for the National Highway Authority of India (NHAI) to take a policy decision on the way to resolve its disputes with contractors.
“There is a need for the NHAI not to challenge arbitral awards mechanically and casually, specially where objections to the award are not strong or substantial,” said Justice Singh, adding “challenges being raised to awards in this manner also results in derailment of infrastructural projects“.
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Justice Singh said by casually challenging the arbitral awards against it, the NHAI deprives both the contractor of timely payments as well as adds to that additional amounts payable on account of interest to the contractor.
The Judge also directed the court’s registry to communicate the order to the NHAI chairman.
The court’s order came on two separate petitions, one by the NHAI and other by contractor Gammon India Ltd, both challenging parts of the same arbitral awards passed against them.
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Gammon had entered into a contract with the NHAI for widening a nearly 140-km stretch NH-5 in Odisha from two lane to four/six lane and strengthening bridges and flyovers on it between Chandikhole and Baleshwar.
The court, in its 56-page judgment, said the entire mechanism of Dispute Resolution Board and Arbitral Tribunal would be set at naught if the DRB’s every recommendation and every award of the tribunal is challenged.