Madras HC Says Highway Contractor’s Bid To Drop 140 Metres From Project Scope And Get Completion Certificate Should Go To Arbitration

The petitioner was awarded an EPC contract on 8 March 2024 to construct a bypass between Kilometres 6/850 and 10/382 of NH 49 Extension, including land acquisition.

It claimed that the respondents failed to provide vacant, encumbrance-free right of way within the contractual period: 90% was allegedly provided only on 31 January 2026, and access to a remaining 140-metre stretch was still unavailable.

The petitioner sought a mandamus directing issuance of a completion certificate, treating that stretch as withdrawn from the project scope.

The respondents disputed the claim, stating that the previously unavailable stretch had later been provided and completed, and relied on the contract’s arbitration clause.

The Court relied on Clause 26.3 of the EPC contract, which provides for referral to an arbitral tribunal of disputes unresolved through the mechanisms prescribed in the agreement and states that the parties must continue performing their respective obligations pending resolution of a dispute.

The Court also treated the requested reduction in the project scope as a proposed novation requiring the respondents’ consent; absent such consent, the dispute was not suitable for disposal in summary writ proceedings.

No other statute or precedent was expressly relied on in the order.

The requested completion certificate depended on treating the 140-metre stretch as removed from the project scope, which the Court characterised as seeking a novation of the contract.

The respondents disputed the petitioner’s account, including whether the relevant stretch had later been provided and completed.

Because the parties’ contractual dispute-resolution mechanism provided for arbitration, and the requested contractual alteration could not be assumed without the respondents’ consent, the Court concluded that the dispute should be adjudicated through that mechanism rather than summarily in writ proceedings.

It disposed of the writ petition, leaving the petitioner at liberty to pursue the contractual dispute-resolution mechanism, including arbitration; there was no order as to costs.