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National Highways Authority of India v. M/s. Progressive Construction Ltd.

Civil Appeal · 2021 INSC 84Decided 12 Feb 2021
Civil Appeal No. 542 of 2021
Justice Indu Malhotra · Justice Ajay Rastogi

Background

A three-member arbitral tribunal had passed an award on a highway construction dispute between NHAI and the contractor. A Single Judge of the Delhi High Court, acting under Section 34 of the Arbitration Act, substantially set aside that award, holding that the tribunal had drawn incorrect inferences and ignored vital evidence, and allowed the parties to re-agitate several claims. Both sides filed cross-appeals before the Division Bench, which passed an interim order confining the appeals to only a few specific claims. NHAI then approached the Supreme Court challenging that interim order.

Decision Breakdown

While the appeal was pending, both parties agreed to have all their claims and counter-claims freshly arbitrated by a sole arbitrator appointed by the Supreme Court. The Court appointed a former Supreme Court judge as the sole arbitrator to decide all claims afresh, through the Indian Council of Arbitration, with liberty to engage technical experts if needed, fees to be shared equally by the parties. As a result, the Delhi High Court's interim order was set aside and the pending High Court appeals were rendered infructuous, and the Supreme Court appeal was allowed in these agreed terms.

Lesson Learnt

Parties to a long-running arbitration dispute can, even at the appellate stage, mutually agree to a fresh arbitration before a court-appointed arbitrator as a practical way to resolve matters quickly rather than continuing through layered appeals.

Official source (sci.gov.in)View Judgment (PDF)

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