The Delhi High Court has partly allowed a petition filed by the National Highways Authority of India (NHAI), holding that an arbitral tribunal cannot award relief beyond what was actually claimed by a party. The Court also found that the tribunal relied on material that was not properly put before both sides, thereby denying one party a fair opportunity to respond. However, the Court upheld the tribunal's findings on the contractor's principal payment claim and rejected NHAI's argument that the arbitration proceedings were barred by limitation.
Background of the Case
The dispute arose from a consultancy contract awarded by NHAI in December 2006 to The Louis Berger Group Inc. JV with M/s COWI A/S for the design, construction supervision and operation and maintenance of a cable-stayed bridge across the Chambal River in Kota, Rajasthan.
During construction, the partially built bridge collapsed on 24 December 2009. Following the incident, NHAI constituted a Committee of Experts, issued a show-cause notice to the consultant and considered imposing penalties. However, instead of terminating the contract, NHAI continued to engage the consultant for completion of the project.
Years later, disagreements arose over unpaid consultancy fees, escalation amounts and operation and maintenance (O&M) charges during the extended project period. After negotiations failed, the consultant invoked arbitration in January 2021. The arbitral tribunal allowed the consultant's first claim in full and partly allowed its second claim relating to O&M charges.
Court's Observations
Justice Avneesh Jhingan first examined whether the tribunal had erred by not deciding who was responsible for the bridge collapse.
The Court found that this issue had effectively lost significance because NHAI chose to continue with the consultant despite the Committee of Experts' report and the earlier show-cause proceedings. No supplementary agreement was executed, no penalty was imposed and the original contractual relationship continued.
Rejecting NHAI's argument, the bench observed,
"The contention that fixing of responsibility was the core issue is ill-founded."
The Court also rejected NHAI's plea that the consultant's claims were time-barred. It held that the cause of action arose only when NHAI finally refused to release the remaining payments through its communication dated 21 April 2020. Since arbitration was invoked on 26 January 2021, the claims were filed within the prescribed limitation period.
Tribunal Exceeded Its Jurisdiction
The High Court, however, found merit in NHAI's challenge to the award relating to O&M charges.
The tribunal had granted payment for services extending up to 19 November 2023, even though the arbitral award itself had been delivered on 4 May 2023. According to the Court, compensation could not be awarded for services that had not yet been rendered when the award was passed.
"The relief travels beyond the scope of submission to arbitration," the Court observed, adding that such an award falls within the grounds for interference under Section 34 of the Arbitration and Conciliation Act.
The Court further noted that the tribunal relied on financial information relating to an O&M expert through an email that was not properly confronted to NHAI before being used. This deprived NHAI of a meaningful opportunity to challenge the material.
Referring to Section 18 of the Arbitration and Conciliation Act, the bench observed that parties must be treated equally and given a full opportunity to present their case. Since that safeguard was not followed, the award relating to the second claim could not be sustained.
Court's Decision
After analysing the scope of judicial review under Section 34 of the Arbitration and Conciliation Act, the Delhi High Court concluded that the arbitral award relating to the consultant's second claim was severable from the rest of the award.
Accordingly, the Court set aside only the award relating to Claim No. 2, while leaving the award on Claim No. 1 undisturbed. The petition filed by NHAI was therefore partly allowed, and the pending application was disposed of.
Case Details
Case Title: National Highways Authority of India v. The Louis Berger Group Inc. JV with M/s COWI A/S
Case Number: O.M.P. (COMM) 351/2023
Judge: Hon'ble Mr. Justice Avneesh Jhingan
Decision Date: 03 August 2026
