Judicial Interference Under Section 34 Is Impermissible Where Arbitral Findings on Contract Interpretation and Settlement Are Plausible

The National Highways Authority of India (NHAI/Petitioner) and Atlanta Infra Assets Limited (Respondent) entered into a Concession Agreement on 09.12.2005 for road widening and maintenance on a BOT basis.

Due to the COVID-19 pandemic and traffic diversion caused by the Samruddhi Expressway, the Respondent sought extensions of the concession period.

An Arbitral Tribunal, vide award dated 22.11.2025, allowed Claim No. 1 (granting a 53-day extension) and rejected NHAI’s Counter-Claims.

NHAI challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, specifically regarding: (i) the 28-day portion of the extension granted for partial toll loss, and (ii) the rejection of its counter-claim for ₹18.75 Crores arising from the de-scoping of 4.62 km of service roads.

1. Whether the Arbitral Tribunal exceeded its jurisdiction or committed patent illegality by applying a 2020 Policy Letter to grant a 28-day extension for partial toll loss, despite the policy's stated restriction to Model Concession Agreements (MCA).

2. Whether the Tribunal erred in rejecting NHAI’s counter-claim for a refund related to de-scoped works based on a settlement agreement reached in a prior (2nd) arbitration.

The court primarily applied Section 34 of the Arbitration and Conciliation Act, 1996, which restricts judicial interference to grounds of patent illegality or conflict with the fundamental policy of India.

It relied on the precedent in Consolidated Construction Consortium Ltd. v. Software Technology Parks of India (2025), which establishes that a Section 34 court does not act as an appellate body and must respect arbitral autonomy if two views are possible.

The court also applied Clause 29.6(c) of the Concession Agreement regarding Force Majeure.

The principle of finality of settlements to prevent re-opening of determined issues.

Regarding the counter-claim, the Court found the Tribunal's reasoning sound; the parties had settled the de-scoping issue in a 2020 Procedural Order during a second arbitration without reserving rights to future claims, and NHAI had subsequently issued a completion certificate.

Re-opening this would violate the finality of the settlement.

Regarding Claim No. 1, the Court held that the Tribunal did not "re-write" the contract but performed a "purposive construction".

It reasoned that since COVID-19 was a Force Majeure event recognized under Clause 29.6(c) of the Agreement, the Tribunal was justified in aligning the relief measures of the 2020 Policy Letter—which compensated for toll collection falling below 90%—with the existing contract.

The distinction NHAI sought to draw between MCA and non-MCA projects was deemed arbitrary given the universal impact of the pandemic.

It held that the Tribunal’s findings were plausible, backed by evidence of revenue loss, and did not suffer from patent illegality.

The Court ordered the judgment to be transmitted to NHAI immediately due to the urgency of the matter.