Delhi HC Upholds ₹145.214-Crore Award To Highway Concessionaire, Upholding Finding NHAI Caused 1,021-Day Delay By Failing To Provide Land

01Facts

NHAI awarded Atlanta a BOT concession to widen approximately 40.8 km of the Nagpur–Kondhali section of NH-6.

The Scheduled COD was 5 December 2008, but PCOD was achieved on 22 September 2011, a delay of 1,021 days.

Atlanta attributed the delay to NHAI’s failure to provide the required Additional Right of Way (AROW); NHAI attributed it to Atlanta’s performance and land-acquisition proposals.

¶ 8–9

The arbitral tribunal found the delay attributable to NHAI and awarded Atlanta amounts under several claims, including prolongation costs and loss of toll revenue.

¶ 15–17

Both parties challenged parts of the award under Section 34 of the Arbitration and Conciliation Act, 1996; Atlanta also challenged reductions and rejected components of its claims.

¶ 15–17

02Issues

i.1. Whether the tribunal’s finding that NHAI was responsible for the delay in providing AROW was unsupported by evidence or otherwise liable to be set aside under Section 34

¶ 59–68, 78–84

ii.2. Whether the awards for prolongation costs, including overheads, machinery and equipment, and price escalation under Claim No. 6, had a sufficient evidentiary and rational basis to withstand Section 34 review

¶ 85–115

iii.3. Whether the tribunal’s assessment of Atlanta’s lost toll revenue under Claim No. 5 was an impermissible or arbitrary estimate

¶ 117–138

iv.4. Whether the tribunal’s awards under Claims 2, 8 and 10, and its award of post-award interest, warranted interference under Section 34

¶ 139–152

03Law Applied

Section 34 of the Arbitration and Conciliation Act, 1996 permits interference with an arbitral finding for “no evidence” or disregard of vital evidence only where the conclusion cannot be reconciled with any permissible view of the record; a court may not reappreciate evidence merely because it considers it weak or would reach a different conclusion (*Ramesh Kumar Jain v. Bharat Aluminium Company Ltd.*, 2025 INSC 1457).

¶ 65–67

An arbitrator has latitude to select a damages methodology suited to the case, but quantification must have an intelligible, rational nexus to the evidence and cannot be arbitrary (*McDermott International Inc. v. Burn Standard Co. Ltd.*; *NHAI v. Patel-KNR (JV)*; *Batliboi Environmental Engineers Ltd. v. HPCL*).

¶ 99–102

Where employer-caused prolongation results in additional costs, including escalation, compensation may be awarded on a reasonable evidentiary basis even absent an escalation clause (*K.N. Sathyapalan v. State of Kerala*).

¶ 110–111

Under Section 31(7), post-award interest may apply to the aggregate sum, including pre-award interest, and the unamended provision contemplated 18% interest unless the award directed otherwise (*Hyder Consulting (UK) Ltd. v. Governor, State of Orissa*).

¶ 147–151

The concession agreement allocated to Atlanta duties to identify and propose additional land acquisition, while NHAI undertook to take necessary steps to accomplish acquisition and provide the AROW.

¶ 73–75

Provisions in the judgment · 3 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 31 Section 33 Section 34

04Reasoning

The Court held that the tribunal’s attribution of delay to NHAI rested on contemporaneous correspondence and a permissible assessment of Atlanta’s land-acquisition efforts; setting it aside would require impermissible reappreciation of evidence.

¶ 77–83

For Claim No. 6, the Court found some evidentiary basis for the losses and upheld the tribunal’s moderated calculations, including its use of an 8% rate for machinery deployment and its proportionate reduction of the escalation claim.

¶ 88–105, 112–116

It likewise upheld the toll-revenue award because contemporaneous financing projections supplied a rational basis for estimating lost revenue, and the tribunal had deducted 50% for saved operation and maintenance costs.

¶ 132–138

Claims 2, 8 and 10 followed from the upheld delay finding.

¶ 139–152

The Court also rejected the interest challenge, applying *Hyder Consulting* to the aggregate award and noting the applicable unamended Section 31(7)(b).

¶ 139–152