Kurukshetra Expressway Private Limited vs. National Highways Authority of India
Background
Kurukshetra Expressway had a 28-year concession from NHAI to four-lane a stretch of NH-71 in Haryana. Citing prolonged toll suspension caused by the Farmers' Agitation and COVID-19 (an "Indirect Political Force Majeure Event"), the company terminated the concession agreement in 2021 and demanded a large Termination Payment. An Arbitral Tribunal awarded it Rs. 911.13 crore, computing this using a higher project-cost figure the company had itself notified to NHAI. NHAI challenged this award in court, and a Single Judge cut down the award, holding that the contract capped the relevant project cost at Rs. 650 crore. Kurukshetra Expressway appealed that decision.
Decision Breakdown
The Division Bench dismissed the appeal and upheld the Single Judge's ruling. It held that a court's power to review an arbitral award (and, even more so, an appeal against that review) is very narrow: it can only check whether the Arbitral Tribunal's interpretation of the contract was one no reasonable person could adopt, not re-decide who has the better reading. Applying that standard, the Court agreed that the Tribunal had effectively rewritten the contract rather than interpreted it: the agreement's definition clause capped the relevant project cost at Rs. 650 crore, and a unilateral notification (a "disaggregation letter") by the company could not lawfully be used to inflate that contractually fixed ceiling.
Lesson Learnt
In commercial contracts, especially government infrastructure concessions, an express, clearly worded cost cap or ceiling is enforceable as written and cannot be enlarged simply because one party later claims its actual costs were higher; and Indian courts reviewing arbitral awards (under Sections 34/37 of the Arbitration Act) will not substitute their own view of the contract merely because another reading is possible.