17 Jul 2020
Delhi HC stays Arbitral Award against NHAI
GMR Pochanpalli Expressways has secured a stay order from the Delhi High Court on the Arbitral Award earlier made to the National Highways Authority of India (NHAI) by the Arbitral Tribunal. The subject matter of the issue relates to the National Highway Project for four-laning of the AdloorYellareddy-Gundlapochanpalli section of the NH-7.
The Delhi Court has stayed the Award of the Arbitral Tribunal, which had directed GMR Pochanpalli Expressways to carry out renewal work of the above-mentioned section by relaying the bituminous coat, a type of coat used to form a layer to protect roads from erosion, over the entire stretch of the road which forms part of NH-7 being developed by GMR (Hyderabad-Nagpur section).
The stay order has wide ramification for the industry. In this case, the NHAI has been insisting on the relaying of bituminous coat, every five years, even where the pavement riding quality is good and within permissible parameters as per the Concession Agreement. Later, if the High Court finally decides that GMR is not required to carry out the said renewal work every five years if the surface roughness of the pavement is within the permissible limit, it will be a huge relief to the concessionaires across the country who have to undertake unnecessary renewal work at an enormous cost. In this case, GMR has also claimed more than Rs 1 billion towards expenses it has incurred in the renewal work it undertook in the year 2014, which will also be the subject matter of consideration before the High Court.
The objection to Arbitral Award was filed by GMR Pochanpalli Expressways and was argued by Advocate Manoj K Singh, Founding Partner, Singh & Associates via videoconference and the argument was heard by Justice C Hari Shankar. Advocate Ankur Mittal represented NHAI.
The issue for consideration before the High Court is whether GMR is required to carry out regular periodic maintenance work every five years in the entire stretch of project highways even for stretches where the surface roughness index and pavement riding quality is well within accepted and agreed parameters. The roughness of the road surface relates to smoothness, and frictional properties of the pavement surface and is in turn related to safety, and ease of the driving path.
NHAI had been pressurising GMR to give a programme for carrying out the second periodic renewal work by June 15, 2020, and had threatened to carry out renewal work on its own at the cost of GMR and levy damages, in case GMR failed to act. There was a threat of cost, consequences, and termination of the Concession Agreement in the event of GMR failing to give a programme and carrying out renewal work. The matter will be heard on July 24, 2020.
