Introduction:

In Roadway Solutions India Infra Limited v. National Highway Authority of India (O.M.P. (I) (COMM.)-1/2026), the Vacation Bench of the Delhi High Court, presided over by Justice Madhu Jain, passed an important interim order under Section 9 of the Arbitration and Conciliation Act, 1996, restraining the National Highways Authority of India (NHAI) from acting upon its Notice of Intention to Terminate (NITT) issued against the contractor and from invoking insurance surety bonds aggregating to approximately ₹104 crores. The dispute arose out of a high-value infrastructure contract relating to the development of a package of the Delhi–Mumbai Expressway, a project of national importance. The petitioner, Roadway Solutions India Infra Limited (RSIL), approached the High Court seeking urgent protection, contending that the termination notice and threatened encashment of surety bonds were arbitrary, retaliatory, and aimed at masking NHAI’s own contractual defaults, particularly its failure to provide the contractually agreed extent of unencumbered Right of Way (RoW). The Court, while conscious of the public utility nature of the project, found that a strong prima facie case and balance of convenience existed in favour of granting interim protection to prevent irreversible financial harm pending adjudication of disputes through arbitration.

Background of the Dispute:

The contractual relationship between RSIL and NHAI commenced in January 2024, when the parties entered into an agreement for execution of a specific package on the Delhi–Mumbai Expressway. A central obligation cast upon NHAI under the agreement was to hand over at least 90% of the Right of Way in a contiguous stretch of not less than five kilometres, enabling smooth and uninterrupted execution of construction activities. However, from the early stages of the project, disputes arose regarding the availability and contiguity of land. RSIL repeatedly complained that the RoW handed over was fragmented and fell substantially short of the contractual requirement, making it impossible to deploy resources efficiently and meet progress milestones. In an attempt to salvage the project and avoid termination, the parties entered into not one but three settlement agreements over time. Each settlement sought to recalibrate obligations and timelines, acknowledging delays and impediments on both sides. Under the third settlement agreement, NHAI specifically undertook to clear hindered land, while RSIL agreed to achieve 10% expenditure or progress by 25 November 2025, with an additional grace period of 30 days. Despite these arrangements, disputes resurfaced when RSIL alleged that NHAI continued to overstate the availability of land and failed to provide the required contiguous stretches, thereby frustrating performance even under the revised terms.

Arguments on Behalf of the Petitioner:

Appearing for RSIL, Senior Advocate Gopal Jain mounted a detailed challenge to NHAI’s Notice of Intention to Terminate dated 23 December 2025. It was submitted that NHAI had, for the first time, candidly admitted before the Court that actual land availability was only 82.4%, contrary to its earlier assertions of 94.85%. This admission, according to the petitioner, went to the root of the dispute and demonstrated that NHAI had been in persistent breach of its primary obligation. Counsel further highlighted that a fresh joint verification of the site was conducted on 8th and 9th December 2025, which revealed an additional hindered length of 425 metres, bringing down effective land availability to 81.2%. These figures, it was argued, conclusively established that the contractual precondition of 90% contiguous RoW had never been fulfilled. The petitioner also submitted that despite these constraints, RSIL had met and exceeded its obligations under the third settlement by achieving expenditure and progress of 19.34%, well above the stipulated 10%, and had duly informed NHAI of the same. It was contended that RSIL was compelled to issue its own Notice of Intent to Terminate on 18 December 2025 due to NHAI’s continuing defaults, and that NHAI’s subsequent termination notice was a counterblast aimed at pre-empting RSIL’s claims and shifting blame. Emphasis was placed on the imminent threat of encashment of insurance surety bonds worth approximately ₹104 crores, which, if permitted, would cause grave, irreparable, and irreversible financial injury to the petitioner, rendering the arbitration proceedings nugatory.

Arguments on Behalf of the Respondent:

Opposing the grant of interim relief, counsel for NHAI argued that the project in question was one of immense public importance, forming part of a critical national infrastructure corridor, and that courts ought to exercise restraint in interfering with contractual actions such as termination in such projects. It was submitted that delays and disputes adversely impacted public interest and that continuation of a non-performing contract would be detrimental to timely completion of the expressway. NHAI contended that RSIL had failed to achieve the required progress milestones within the agreed timelines and that the issuance of the Notice of Intention to Terminate was in accordance with contractual provisions. The respondent further argued that bank guarantees and insurance surety bonds were independent contracts and that their invocation could not ordinarily be restrained except in cases of egregious fraud or irretrievable injustice, which, according to NHAI, were absent in the present case. On this basis, it was urged that no interim protection should be granted and that NHAI should be permitted to act in terms of the contract.

Court’s Analysis and Judgment:

After considering the rival submissions, the Delhi High Court adopted a cautious yet protective approach. Justice Madhu Jain acknowledged the public utility nature of the project but observed that this consideration alone could not justify permitting actions that might cause irreversible prejudice to one party before disputes were finally adjudicated. The Court took note of the petitioner’s prima facie case that NHAI had failed to provide the contractually mandated extent of contiguous RoW, and that even as per NHAI’s own admissions and joint verification reports, land availability fell significantly short of 90%. The Court also found merit in the petitioner’s submission that encashment of insurance surety bonds aggregating to around ₹100–104 crores would result in grave and irreparable loss, which could not be adequately compensated later, particularly if the petitioner were to succeed in arbitration. Balancing the competing considerations of public interest, contractual rights, and the need to preserve the subject matter of arbitration, the Court restrained NHAI from acting upon its Notice of Intention to Terminate and from invoking the insurance surety bonds until the next date of hearing. The order thus ensured that the status quo was maintained, preventing irreversible consequences while leaving the merits of the dispute to be decided in appropriate proceedings.