In the Matter National Highways Authority of India v. GVK Jaipur Expressway Pvt Ltd In a petition submitted by the responding party under Section 34 of the Arbitration Act contesting the arbitral award dated 02-11-2019, a review had been brought under Section 37 of the Arbitration and Conciliation Act, 1956 against the judgment pronounced by the Single Judge setting aside the arbitrary award because it is in contravention of the agreement’s clear provisions.
The Respondent and NHAI entered into a Concession Agreement for the expansion of a 2-lane to 6-lane split carriageway facility on the NH-8 segment between Jaipur and Kishangarh in Rajasthan. Due to the necessity to build the ETC system with one toll lane in each way, the project was not finished. The Respondent was instructed to draught and submit a plan for the development of additional toll lines at the Jaipur Toll Plaza during a project review meeting. In opposition, the Respondent claimed that adding further facilities would violate the terms of the Concession Agreement. The Appellant asked the Respondent to produce information on the property that was intended to be bought as well as a scientific map showing the locations of the right-of-way, current toll plazas, and new toll lanes that were being considered. The Respondent asked an Independent Consultant to assess the viability of the provided estimate in accordance with the Concession Agreement and urged the applicant to submit a Change of Scope Notice. In a Statement of Claim, the Respondent sought to recover Rs. 5,43,07,356 plus 18% interest annually. The Arbitral Tribunal found that the NHAI was within its rights to withhold the order required according to the Concession Agreement and dismissed the Respondent’s allegations. According to the provisions of section 34 of the Arbitrator Act, the Respondent contested the arbitral award; when it was overturned, the current appeal was submitted.
- whether the addition of new toll lanes to the Toll Plaza would amount to a change in the agreement’s parameters.
- whether the Appellant’s obligations went beyond simply making more land available to cover any related costs.
Analysis of Court order
The conclusions of the majority of the Arbitral Tribunal are a position that is reasoned and logical, according to a division bench of the Delhi High Court’s Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, and involvement by a court under Section 34 of the Arbitration Act was not required.
The Respondent must maintain continuous traffic flow under normal operating conditions, the Court concluded, and the erection of toll booths cannot be viewed as additional work necessitating a change in scope. A court shouldn’t interfere with the arbitration award’s ability to exercise power under Section 34 of the Arbitration Act since the arbitral tribunal’s justification is tenable. Clauses 18.1 and 18.4 of the Concession Contract and the Arbitral Award demonstrate that the bulk of the Arbitral Tribunal’s arguments are reasonable arguments.
The Court determined that the concession agreement is not legislation or law defending national interests and that the arbitral tribunal would not be in violation of basic policy under Indian law if it did not consider the argument. The agreement’s clause 18.4 was not taken into consideration, which is neither incorrect nor unlawful. The majority decision from February 11, 2019, gave a credible position, and the conclusions in that award should not have been overturned by a court under Section 34 of the Arbitration Act, according to the Court, which overturned the challenged award.
CASE NAME – National Highways Authority of India v. GVK Jaipur Expressway Pvt Ltd.FAO (OS) (COMM.) 32//2022