Turning tide: NHAI hits fast track on arbitration with stricter monitoring
NEW DELHI: NHAI, which handles the largest number of arbitration cases among government agencies, appears to have seen a change in its fortunes in some recent results due to greater focus on quality of arbitrators, stricter monitoring of cases and use of artificial intelligence. Last week, an arbitration panel awarded Rs 1,202 crore in favor of NHAI in an IRB-related arbitration case, rejecting the concessionaire’s claims. These are among the largest awards ever received by NHAI in arbitration. In another major victory, the court recently dismissed claims worth Rs 8,375 crore made by Soma-Isolux in the Panipat-Jalandhar expressway project, while also awarding Rs 820 crore to NHAI on its counterclaims.
The agency’s artificial intelligence tool, Marg Sarthi, developed internally, analyzed 149 arbitration awards delivered over the past 10 years and identified the reasons behind the negative rulings, officials said. The results now help the court prepare more effectively for arguments and strengthen its defence. Currently, NHAI is involved in 140 arbitration cases in which companies have made claims worth around Rs 1.2 lakh crore, while the authority has filed counter-claims worth Rs 65,000 crore.
Between 2002 and 2025, the courts passed 760 arbitration awards and awarded nearly Rs 40,000 crore to highway contractors against claims worth around Rs 1 lakh crore, officials said. In addition, NHAI settled 321 cases, including some arbitration awards, through conciliation by paying about Rs 27,000 crore against claims worth Rs 1 lakh crore. The NHAI’s victory over the IRB in the long-running dispute over the six-lane Tumkur-Chitradurga project in Karnataka is of special significance, officials said.
The project, which was awarded in 2010-11 under the build-operate-transfer (BOT) model, required the concessionaire to pay an annual premium of Rs 140 crore, with an annual escalation of 5%. After repeated defaults, NHAI withdrew the installment deferral facility in 2019. Challenging the move, the concessionaire sought restoration of the deferment facility, demanded compensation of Rs 95 crore, and sought extension of the concession period by 138 days. NHAI has disputed these claims and filed counterclaims seeking unpaid premium dues and revenue shares. In a majority decision, the three-member bench dismissed the cash claims of the concessionaire, restricted the extension of the concession period to only 23 days, and awarded NHAI a sum of Rs 1,202 crore towards outstanding premium and revenue share dues up to June 2026. According to officials, the biggest reason identified by NHAI’s AI tool for losing cases is related to prolongation and idle resource claims.