Delhi High Court stays Arbitral Award against NHAI for relaying pavement in favour of GMR Pochanpalli Expressways Limited

In an arbitration matter of GMR Pochanpalli Expressways Limited Vs National Highway Authority of India (NHAI), the Delhi High Court has stayed the Arbitral Award where under the Arbitral Tribunal directed GMR Pochanpalli Expressways Limited for carrying out renewal work by relaying bituminous coat over the entire stretch of road which forms part of NH-7 being developed by GMR (Hyderabad-Nagpur section). The subject matter relates to the National Highway Project concerning 4 laning of Adloor Yellareddy-Gundlapochanpalli section of NH-7 from Km. 368.255 Km to Km. 471.33-AP-2; (total 103 Kms X 4 Lanes = 412 KM). 

The order has wide ramification as the NHAI was insisting for relaying bituminous coat every 5 years even though the pavement riding quality was good and within permissible parameters relying on the Concession Agreement. In case the High Court finally decides that the GMR is not required to carry out renewal work every five years if the surface roughness of the pavement is within the permissible limit, it will be a huge relief to the concessionaires across the country who has to unnecessarily undertake renewal work every five years at enormous cost. GMR has also claimed more than Rs. 100 Crore towards expenses incurred by GMR in renewal work undertaken in the year 2014, which will be the subject matter of consideration before the High Court. 

The Objection to Arbitral Award was filed by GMR Pochanpalli Expressways Limited and was argued by Manoj K Singh, Founding Partner of Singh & Associates through videoconferencing. Ankur Mittal, the Advocate, represented NHAI. The argument was heard by Justice C. Hari Shankar. 

The issue for consideration before the High Court is whether the GMR is required to carry out regular periodic maintenance work every five years in the entire stretch of project highways irrespective of the surface roughness index and pavement riding quality. Roughness index of 2000 mm/KM is considered to be good & roughness index of 3000 mm/KM is considered average. 

NHAI has been pressurizing GMR to give a programme for carrying out 2nd periodic renewal work by 15 June 2020 and threatened to carry out renewal work on its own at the cost of GMR and levy damages, in case GMR fails to act. There was a threat of cost, consequences and termination of the Concession Agreement in the event of failure of GMR to give a programme and carry out renewal work. The matter will be heard on July 24, 2020.