NHAI Secures Major Arbitration Victory, Saves Public Funds in Gujarat Highway Dispute

The arbitration matter pertained to the 15-km-long Kamrej–Chalthan section of NH-48, a strategically important highway corridor in Gujarat.

In a major legal and financial victory for public infrastructure governance, the National Highways Authority of India (NHAI) has successfully defended an arbitration case related to the six-laning of the Kamrej–Chalthan section of NH-48 in Gujarat, resulting in massive savings of public funds and reinforcing the growing role of digital monitoring in infrastructure dispute resolution.

Against claims amounting to approximately ₹174.49 crore raised by the contractor, the Arbitral Tribunal awarded only ₹54 lakh, effectively dismissing the overwhelming majority of the claims.

The outcome is being viewed as a significant endorsement of NHAI's technology-driven contract management systems, documentary record-keeping and evidence-based infrastructure governance practices.

Dispute Related to NH-48 Six-Laning Project in Gujarat

The arbitration matter pertained to the 15-km-long Kamrej–Chalthan section of NH-48, a strategically important highway corridor in Gujarat.

The project involved:

• Widening the existing four-lane highway to six lanes

• Implementation of long-term safety measures

• Improvement of four accident-prone black spots on the Kamrej–Bharuch stretch

The contract was awarded in June 2016 to M/s SCIW–Unique Construction (JV) under the Engineering, Procurement and Construction (EPC) model.

The total bid cost of the project was approximately ₹241.41 crore.

According to officials, the appointed date for commencement of work was declared on 21 March 2017, with 87.75% land availability already in place at the time.

Contractor Cited Land Constraints, Project Progress Slowed

During execution of the project, the contractor repeatedly cited land-related constraints and other issues while progress on the project remained significantly below expectations.

NHAI stated that only relatively simple works such as:

• Road works

• Drainage activities

were carried out during execution.

However, critical and technically demanding project components, including:

• Major structures

• Flyovers

• Key engineering works

were allegedly not undertaken by the contractor.

Officials said the contractor's slow progress and continued deficiencies eventually led to mutual foreclosure of the contract on 11 May 2020, at a physical progress level of approximately 49.79%.

Foreclosure Agreement Included Final Settlement Clause

According to NHAI, both parties had agreed at the time of foreclosure that all claims arising from the contract stood fully and finally settled.

The contractor had also reportedly undertaken not to raise any future claims following the foreclosure agreement.

However, despite the settlement terms, the contractor initiated arbitration proceedings in 2022, claiming approximately ₹174.49 crore against NHAI.

Officials argued that the claims were contrary to the agreed foreclosure settlement.

Drone Videography and Digital Records Played Key Role

A major factor in NHAI's successful defence was its use of extensive digital and documentary evidence before the Arbitral Tribunal.

NHAI presented:

• Drone videography

• Digital project monitoring records

• Technical documentation

• Progress evidence

• Land availability records

The evidence reportedly demonstrated that sufficient land was available for execution of the project works and that substantial drainage construction along the right of way had already been completed.

Officials also established that the contractor had failed to undertake major structural works that were central to project execution.

The case is being cited as a major example of how digitization and technology-enabled project monitoring can strengthen legal defensibility in infrastructure contracts.

Tribunal Virtually Rejects Entire Contractor Claim

After reviewing submissions and evidence from both parties, the Arbitral Tribunal delivered its award on 10 March 2026.

The Tribunal effectively rejected nearly the entire claim amount raised by the contractor.

Against claims of approximately ₹174.49 crore, only ₹54 lakh was awarded in favour of the claimant.

Infrastructure experts say the outcome represents one of the more significant arbitration victories for a public infrastructure authority in recent years.

NHAI Highlights Importance of Contractor Accountability

NHAI stated that the case underscores its commitment to:

• Prudent contract management

• Contractor accountability

• Protection of public funds

• Evidence-based dispute resolution

• Technology-driven project oversight

The authority emphasized that robust digital documentation and transparent project monitoring systems are increasingly essential for managing large-scale infrastructure projects and minimizing litigation risks.

Growing Use of Technology in Infrastructure Governance

The case also highlights the broader transformation underway in India's infrastructure management ecosystem, where digital technologies are increasingly being integrated into project execution and monitoring.

Government agencies are now using tools such as:

• Drone surveillance

• GIS mapping

• Real-time project dashboards

• Digital documentation systems

• Remote monitoring technologies

to improve transparency, reduce delays and strengthen oversight of highway and infrastructure projects.

Experts say such systems are also proving critical in arbitration and dispute resolution by providing time-stamped, visual and verifiable evidence.

Infrastructure Arbitration a Major Governance Challenge

Disputes related to delayed projects, land acquisition, contractor performance and cost escalation have historically been a major challenge in India's infrastructure sector.

Large arbitration claims often lead to:

• Delayed project completion

• Financial strain on public agencies

• Cost overruns

• Legal uncertainty

The NHAI victory is therefore being viewed as a significant precedent for stronger contract enforcement and technology-backed dispute management.

Public Infrastructure Push Continues Nationwide

The NH-48 corridor is part of India's broader national highway modernization programme aimed at improving logistics efficiency, reducing travel time and strengthening economic connectivity.

NHAI has increasingly focused on improving project execution standards while tightening monitoring mechanisms amid the government's massive infrastructure expansion drive under initiatives such as:

• Bharatmala Pariyojana

• National Infrastructure Pipeline

• PM Gati Shakti

Officials say stronger accountability frameworks and digital governance systems will be central to ensuring efficient implementation of future highway projects across the country.