Delhi High Court orders NHAI to pay Rs 12.04 bn to R-Infra's Subsidiary

The Delhi High Court has instructed the National Highways Authority of India (NHAI) to make a payment of Rs 12.04 billion to TK Toll Road (TKTR), which is a wholly owned subsidiary of Reliance Infrastructure (R-Infra). R-Infra stated in an official communication to the stock exchanges that the court has directed NHAI to deposit the specified amount and has granted permission to TKTR to withdraw the same against a Bank Guarantee.R-Infra explained that this amount will be allocated towards reducing the company's debt burden. The arbitration process had yielded an award of Rs 12 billion in favour of R-Infra in October 2022. Subsequently, TKTR filed a petition in the Delhi High Court seeking the enforcement of this arbitration award. The toll road in question spans 82 kilometres between Trichy and Karur in Tamil Nadu, and it is facilitated by a 4-lane National Highway (NH 67).As disclosed in a filing to the financial markets by R-Infra, the Delhi High Court has instructed NHAI to deposit the arbitration award amount along with accrued interest.Back in 2007, NHAI had awarded the development project for the Trichy and Karur highway to R-Infra under a build-operate-transfer (BOT) arrangement. The original completion deadline for the project was set for 2010, but this timeline was not met. The operationalisation of the road for commercial use eventually commenced in February 2014. The disputes over delays and associated penalties had prompted the initiation of arbitration proceedings between NHAI and R-Infra.